One important aspect that hasn't been fully addressed is the Spanish tax implications once you establish residency there. Spain has a "Beckham Law" (Ley Beckham) that might be relevant to your situation - it allows new Spanish tax residents to pay tax only on Spanish-sourced income for up to 6 years, rather than on worldwide income. However, this special regime has specific requirements: you must not have been a Spanish tax resident in the 10 years prior to moving, your work must be performed in Spain, and you need to apply within 6 months of becoming a Spanish tax resident. If you qualify, this could significantly simplify your Spanish tax obligations while you're running your US S-Corp. Also, regarding your S-Corp distributions - these will likely be treated as dividends under Spanish tax law and may be subject to different rates than your salary income. Spain generally taxes dividend income at progressive rates (19-28% depending on the amount), but the US-Spain tax treaty should allow you to credit Spanish taxes paid against your US tax liability. Make sure you're aware of Spain's Modelo 720 reporting requirement if you have foreign assets (including your US bank accounts and S-Corp shares) exceeding €50,000. The penalties for non-compliance are severe, so it's crucial to stay on top of this reporting obligation. I'd strongly recommend consulting with a Spanish tax advisor who specializes in US expats to ensure you're taking advantage of all available benefits and meeting all compliance requirements.

One crucial aspect I haven't seen mentioned yet is the potential impact on your S-Corp election itself. The IRS has specific rules about S-Corp shareholders, and extended foreign residency can sometimes complicate things, especially if you end up becoming a non-resident alien for tax purposes (though as a US citizen, this is less likely). More importantly, you'll want to be very careful about how you document your work location for the IRS. Since you're physically in Spain but working for your US S-Corp, make sure you can clearly demonstrate that your business activities and decision-making are still US-based if questioned. This can help support your position that the S-Corp income is US-sourced rather than Spanish-sourced. Also, consider the timing of your S-Corp distributions carefully. Since Spain taxes dividend income progressively and you might be able to use the foreign tax credit, it could be beneficial to time larger distributions in years when your Spanish tax rate is lower or when you have other foreign tax credits available. One last tip: keep meticulous records of your physical presence in each country. This will be essential for both the Foreign Earned Income Exclusion calculations and for Spanish tax residency determinations. I use a simple spreadsheet tracking entry/exit dates, but there are also apps designed specifically for this purpose. The intersection of S-Corp taxation and international living is complex, but definitely manageable with proper planning and documentation!

Has anyone here actually created a retirement account for their kids from S corp earnings? My daughter is 14 and makes about $7k a year in my business and I'm wondering if it's worth setting up a Roth IRA for her or if there's some other tax strategy I should be using.

Great discussion here! I just want to add one thing that's helped me tremendously with S corp payroll for my kids - make sure you're keeping really detailed records of their actual work hours and tasks. The IRS can be pretty strict about "reasonable compensation" even for family members. I created a simple time tracking system where my kids log their hours and what they did each day. For the marketing/photo work, I keep copies of the actual materials they appeared in and notes about which photo shoots they participated in. This documentation has been invaluable when my accountant prepares our quarterly payroll reports. Also, don't forget that you'll need to issue them W-2s at the end of the year just like any other employee. The payroll software I use makes this pretty straightforward, but it's something to plan for if you're doing payroll manually. The Roth IRA suggestion is spot on too - getting them started on retirement savings this early is such a gift you can give them!

One thing I haven't seen mentioned yet is the impact of the Tax Cuts and Jobs Act changes on business vehicle depreciation. The bonus depreciation rules have been phasing down since 2023, and by 2027 they'll be completely eliminated unless Congress acts. For 2025, you can still take 60% bonus depreciation on qualifying business vehicles in addition to Section 179, but this is dropping to 40% in 2026 and 20% in 2027. If you're planning to replace your vehicle in the next few years, the timing could significantly impact your tax benefits. Also worth noting - if you're considering an electric or hybrid business vehicle, there are additional credits and accelerated depreciation opportunities that might affect your recapture calculations. The clean vehicle credits can sometimes offset some of the recapture pain if you're strategic about timing.

Great discussion everyone! As someone who just went through this exact situation with my construction business vehicles, I wanted to add a few practical points that might help: For the original question about the 5 vs 7 year timeline - business vehicles are indeed 5-year property under MACRS, but here's what I learned the hard way: even if you keep it exactly 5 years, you could still face recapture if your business use percentage drops below what you originally claimed. One strategy my CPA recommended was to document everything from day one. I now photograph my odometer monthly, keep a spreadsheet of every business trip with client names and purposes, and even save GPS data when possible. It sounds excessive, but during my recent audit, this documentation saved me from having thousands in depreciation disallowed. Also, if you're thinking about upgrading vehicles before the recovery period ends, consider a like-kind exchange (1031 exchange) for business vehicles. You can sometimes defer the recapture by rolling the basis into a new business vehicle. Not everyone knows this option exists, but it can be a game-changer for businesses that need to regularly update their fleet. The key takeaway: plan for the full 5-year commitment when you take that Section 179 deduction, and document everything religiously!

This thread has been absolutely fantastic! As someone who just started freelancing last year, I was completely overwhelmed by all the 1099-NEC requirements. Reading through everyone's experiences and advice has really helped me understand what I need to do. I especially appreciate the practical tips about setting up tracking systems and having upfront conversations with clients about tax requirements. I made the mistake of just assuming clients would know what to do, and ended up scrambling in January trying to get proper documentation. One question for the group: For those of you who've been freelancing for a while, how do you handle clients who push back on providing W-9 information or seem resistant to the 1099-NEC process? I had one client last year who seemed annoyed when I brought up tax forms and said they "don't usually deal with that stuff." I ended up just letting it slide, but now I realize that probably wasn't the right approach. Also, @Dmitry Ivanov - I'm in a very similar situation to your original question, and this thread has been incredibly helpful for understanding the basics. Thanks for starting such a useful discussion!

This entire discussion has been incredibly valuable! As someone who's been doing freelance photography for about 6 months now, I was making so many of the mistakes that have been mentioned here. I had no idea that I needed to be proactive about discussing tax forms with clients upfront. I've just been waiting to see what forms show up at the end of the year, which now I realize is completely backwards. The advice about including W-9 forms with initial contracts and setting up tracking systems is going to save me so much stress. One thing I'm curious about - for those of you who work with a mix of individual clients and businesses, do you find that individuals (like someone hiring you for a family portrait session) are less familiar with 1099-NEC requirements? I've mostly worked with small businesses so far, but I'm starting to get more individual clients, and I want to make sure I'm handling the tax side correctly with them too. Also wanted to thank @Dmitry Ivanov for asking the original question - this thread should be required reading for anyone starting out in freelance work!

I've been dealing with IRS refund tracking issues for years, and here's something that might help that I don't see mentioned yet: if you used tax preparation software like TurboTax, H&R Block, or TaxAct, try logging into their mobile app instead of the website. The mobile apps sometimes cache more information locally and might still show your refund amount even if you're having trouble accessing the full online account. Also, for amended returns specifically, I've found that calling the IRS early in the morning (like 7-8 AM) or later in the evening significantly improves your chances of getting through. The hold times are still brutal, but at least you're more likely to actually get in the queue. One more tip that worked for a friend: if you have your Social Security number and filing status, sometimes the automated phone system (1-800-829-1040) will give you refund information without requiring the exact dollar amount. It's hit or miss, but worth trying before going through all the other steps. The amended return waiting game is the worst part of tax season - hang in there! At least once you finally get the status, you'll have a better idea of the timeline.

I've been through this exact scenario! Here's what worked for me when I was stuck traveling without my paperwork: First, try the IRS2Go mobile app - it's often more forgiving with refund amounts than the website. For amended returns, use the "Where's My Amended Return" tool instead of the regular tracker. If you filed with tax software, check your email for the confirmation receipt - it should have your refund amount. Also try logging into your tax software account on mobile since they usually save everything online. One trick that saved me: contact your bank's customer service and ask them to look up last year's IRS refund deposit. This gives you a ballpark estimate that might be close enough for the IRS tools to accept. Since you're only 3 weeks into an amended return (which typically takes 16+ weeks), you have plenty of time to sort this out. The IRS transcript method others mentioned is solid, but requires getting through their identity verification. Honestly, the stress of tracking it might not be worth it right now - amended returns move at a glacial pace regardless. Sometimes it's better to just wait until you're home with your documents rather than jumping through all these hoops while traveling! Good luck with whatever route you choose! 🤞