This is the transcripts

Code 150 - Tax Return Filed (Date: 08-12-2024; Amount: $1,127.00): This entry indicates that you filed and processed your tax return with a tax amount due of $1,127.00. Code 810 - Refund Freeze (Date: 02-08-2024; Amount: $0.00): This indicates that a freeze has been placed on any refund that may be due to you. This freeze could be due to various reasons such as review for accuracy, verification of information, or other compliance checks. The amount next to this code is typically $0.00 as it represents a status rather than a financial transaction. Code 766 - Credit to Your Account (Date: 04-15-2024; Amount: -$46,880.00): This is a substantial credit applied to your account. This could include withholding from wages, estimated tax payments, or other credits. The negative value indicates it's a credit to you. Code 768 - Earned Income Credit (Date: 04-15-2024; Amount: -$568.00): This shows the amount of Earned Income Credit (EIC) that was applied to your account. This credit is given to you if you are eligible and have low to moderate income from work. It is a refundable credit, meaning it can reduce the tax you owe and potentially increase your refund. Analysis and Next Steps The combination of credits listed under codes 766 and 768 significantly exceeds the tax assessed under code 150. However, the presence of the refund freeze (code 810) means that despite these credits, the IRS is not currently processing a refund for you. Since the freeze was initiated before the credits were applied, there might have been anticipation of issues with your tax return or the credits themselves that required additional scrutiny. Given the refund freeze and the lack of a code 846 (which would indicate a refund being issued), you should anticipate that the IRS may need more information or time to review the accuracy of your return or the eligibility for credits claimed. If you have not received any communication from the IRS explaining the refund freeze, it would be advisable for you to initiate contact to clarify the reasons for the hold and to understand if any additional steps are required from your side to resolve the issue. I made a video on how to bypass the usual IRS phone menu and long wait times here: https://youtu.be/UiAegRQ2Is8

Just wanted to add my experience since I went through this same headache last year. The key thing that helped me was understanding that Box 14 is specifically for self-employment tax calculations - that's why your personal accountant won't touch your individual return until it's fixed. For a simple partnership like yours (selling stuff online), you'll most likely need to report your share of the partnership's net earnings in Box 14 with code "A". Since you mentioned $6,500 gross income and $6,000 expenses, your net earnings would be around $500, so each partner's Box 14 would show their respective share of that amount. I used TurboTax Business to handle my amendment and it was pretty straightforward. The software automatically calculated what needed to go in Box 14 based on the business income I'd already entered. Just make sure when you generate the new K-1s that both you and your partner get copies of the corrected versions for your personal returns. One tip: call the IRS processing center after you mail the amendment to confirm they received it. Mine got lost in the mail the first time and I had to resend everything.

I went through this exact same situation with my partnership last year! Here's what I learned: For Box 14, the allocation depends on your partnership agreement. If you don't have a written agreement specifying ownership percentages, the IRS generally assumes equal partnership (50/50 split). So if your net earnings are $500 ($6,500 - $6,000), each partner would report $250 in Box 14 with code "A". However, if you and your buddy agreed to different ownership percentages based on contributions, time invested, etc., you'd need to allocate based on those percentages. Just make sure whatever split you use is consistent throughout the entire return. For the IRS processing center, I called the general partnership line at 1-800-829-4933 and asked to be transferred to the processing center for my state. They were actually pretty helpful in confirming receipt of my amendment. You can also track it if you send via certified mail with tracking. One more tip: when you prepare the amendment, include a cover letter explaining exactly what you're changing ("Adding self-employment income information to Schedule K-1 Box 14 - no changes to income or expense amounts"). This helps avoid confusion and potential delays in processing. The whole process took about 6-8 weeks from mailing to receiving confirmation, so don't panic if you don't hear back immediately.

Speaking from experience running my S Corp for 10 years, the key here is understanding the DUAL roles you have in your S Corp: 1. As an EMPLOYEE receiving a salary (reported on W-2) 2. As an OWNER receiving distributions of profit (reported on K-1) Your accountant is right that the $40k salary doesn't create a business loss on the 1120-S. BUT, that money had to come from somewhere! In your example, since there's no revenue, the $40k is effectively coming from your beginning cash balance, which represents retained earnings from previous years. This is why the S Corp basis tracking is so important - it follows the money through the business and to the shareholders correctly.

This is a great example of why S Corp taxation can be so confusing! Your accountant is absolutely correct, and I think the confusion comes from mixing up cash flow with tax reporting. Here's what's actually happening in your scenario: **Cash Flow Reality:** Your business started with $100k, paid out $40k in salary, and ended with $60k cash. The $40k definitely left the business account. **Tax Reporting Reality:** On Form 1120-S, that $40k salary is NOT treated as a business expense that reduces income. Instead, it's reported on your W-2 as wages. The business also pays employer payroll taxes on that salary. The reason this makes sense is that S Corps have a unique "dual taxation" structure. The salary portion gets taxed as regular W-2 income (with payroll taxes), while business profits flow through to your personal return via Schedule K-1. Think of it this way: if S Corp salaries reduced business income dollar-for-dollar, you could theoretically pay yourself a huge salary and create artificial business losses. The IRS prevents this by requiring "reasonable compensation" as salary (subject to payroll taxes) and treating the rest as distributions. Your $100k starting balance represents retained earnings from previous profitable years. When you pay salary from that money, you're essentially converting prior-year profits into current-year wages - which changes how it gets taxed but doesn't create a new business loss.

I'm experiencing the exact same delay! Filed through TurboTax on Saturday and still stuck on pending status. After reading everyone's explanations here, I'm much less worried now. It's actually reassuring to know that TurboTax does their own quality check before transmitting to the IRS - better to catch errors early than deal with rejections later. The weekend filing timing combined with their 2-3 day internal review process explains everything. Thanks to everyone who shared the detailed breakdown of how the e-file system actually works behind the scenes. This is exactly why I love this community - you get real answers from people who've been through the same situation. Looks like we weekend filers just need to wait until Tuesday or Wednesday for our status updates!

I'm in the exact same boat! Filed my return through TurboTax on Saturday evening and it's been showing "pending" ever since. Reading through all these responses has been incredibly helpful - I was starting to get really anxious thinking I'd messed something up on my return. The detailed explanations about TurboTax's internal review process and the weekend timing make so much sense now. @Liam Sullivan's step-by-step breakdown was particularly reassuring, and @CosmicCommander's info about the IRS Publication requirements shows there's actually a structured process behind all this. It's good to know that "pending" doesn't mean there's a problem - just that the system is working as designed. Sounds like us weekend filers should see status updates by Tuesday or Wednesday. This community really comes through during tax season stress!

As someone who's dealt with similar cash labor situations in my construction business, I'd strongly recommend getting ahead of this before it becomes a bigger issue. The good news is that your $12,000 in labor costs are absolutely deductible business expenses - the IRS doesn't care if you paid cash, check, or cryptocurrency as long as they were legitimate business expenses. Here's what you need to do immediately: Start keeping a daily log book. Every time you pay someone, write down the date, job site address, brief description of work performed (like "tree removal" or "lawn maintenance"), number of workers, and total amount paid. Have the workers sign this log - even if they just put "Jose" or "Mike," it shows you made an effort to document. For your past payments, recreate this log as best you can remember. Look at your bank withdrawal records to help jog your memory about timing and amounts. The IRS understands that cash businesses exist, but you need to show systematic record-keeping. Most importantly, stop paying from your personal account immediately. Open a business checking account if you don't have one, or start using your existing business account for all labor payments. This separation is crucial for maintaining your business expense deductions and avoiding any appearance of mixing personal and business finances. One last tip - consider having a simple one-page work agreement template that workers can sign. It doesn't need to be fancy, just something that shows the work performed, date, and payment amount. This creates much stronger documentation than just a handwritten log.

I've been running a similar operation with my pool cleaning business for years and learned some hard lessons about documentation. One thing that really helped me was creating a simple "daily work summary" that I fill out at the end of each day, even when I can't get worker signatures. I include: date, total cash withdrawn that morning, list of job sites visited, approximate number of workers used at each site, and total paid out. Then I take a photo of this summary with my phone - creates a timestamp and backup. At the end of the week, I reconcile this against my business account withdrawals. The IRS audited me two years ago (unrelated to labor expenses) and my examiner actually complimented this system. She said it showed "reasonable business practices" for tracking cash labor costs. The key thing she emphasized was consistency - doing the same documentation process every time, even if it's simple. One more tip: if you work the same locations regularly (like weekly lawn maintenance), take before/after photos of the work sites. This creates additional evidence that legitimate work was performed on the dates you claim. Helps justify the business expense beyond just "trust me, I paid someone to work." Your $12K in labor costs are definitely deductible - just get that documentation system in place now and stick with it religiously.