Desperate Question: Can I retroactively elect S-Corp status for 2022?

Well that's really disheartening to hear. I guess it makes sense they have strict deadlines, but man, this hurts. Do you know if there's any way to reduce SE tax liability at this point, or am I just stuck with the full bill?

The options for reducing SE tax after the year has ended are very limited. Make sure you're taking all allowable business deductions - every legitimate business expense reduces your net profit and therefore your SE tax. Double-check that you're deducting the employer half of SE tax on Schedule 1. You might want to consult with a tax professional to see if there are any deductions you've missed. And while this doesn't help for 2022, definitely consider setting up an S-Corp for 2023 if your business profit justifies the additional compliance costs.

How exactly does this work? Do they actually amend previous returns or just help you with the current one? My accountant told me there's basically nothing I can do to fix my SE tax problem from last year.

Sounds too good to be true honestly. No offense but how can some AI tool find legitimate deductions that a human tax pro wouldn't see? I've been burned by "tax optimization" services before that just got me in trouble with the IRS.

They don't automatically amend returns - they analyze your documents and give you specific recommendations. In my case, they identified legitimate business expenses I had categorized incorrectly and showed me documentation for why they qualified as deductions. It was then my choice to file an amended return based on their findings. They're not actually using AI to make things up - they use technology to meticulously compare your documents against tax law and find discrepancies or missed opportunities. They provide references to specific IRS publications that support their recommendations. It's not about magic deductions, it's about making sure you've properly documented and classified everything according to current tax code.

How much do they charge for this? The IRS line is free so I'm wondering what the value is exactly?

Come on, this can't possibly work. The IRS is notorious for being unreachable. You're telling me some service can magically get through when millions of people can't? I'm calling BS on this one.

They don't charge based on the time you spend with the IRS, just a flat fee for connecting you. I don't want to post specific pricing here, but I can tell you it was absolutely worth it for me - I spent over 4 hours on hold with the IRS before giving up and trying Claimyr. It absolutely does work - there's nothing "magical" about it. They use technology to navigate the phone system and hold your place in line. The reason most people can't get through is because they give up after being on hold for hours. Claimyr basically does the waiting for you, and only calls you when an agent is about to pick up. It's not about skipping the line, it's about having something else hold your place in it.

Thanks for these suggestions! I definitely have health insurance premiums and a home office, but I wasn't sure if the home office deduction would trigger an audit. Have you had any issues with claiming it?

I've claimed the home office deduction for 6 years now and never had an issue or audit. The key is to be honest about it - only claim the space used EXCLUSIVELY for business. Measure the square footage accurately and be prepared to document it if asked. The simplified option (currently $5 per square foot up to 300 sq ft) is easier but often results in a smaller deduction. The regular method requires more record-keeping but usually gives you a better deduction since you can deduct portions of utilities, internet, insurance, etc. Either way, if you legitimately have a dedicated home office, you should absolutely claim this deduction!

I switched to S-Corp 3 years ago and it's saved me roughly $7,500-9,000 annually in SE taxes. There are definite costs though - I pay about $1,200/year for payroll service and S-Corp tax prep, plus have to maintain better records. The general rule I've found is that S-Corps start making financial sense when your net profit is consistently above $60,000-80,000. Below that, the compliance costs often outweigh the SE tax savings. You also need to be disciplined about paying yourself a "reasonable salary" which is a somewhat gray area that can get you in trouble if you're too aggressive.

I use Gusto for payroll and it's been great - very user-friendly and they handle all the tax filings and payments automatically. There are cheaper options like SurePayroll or even PayrollCity that might work if you're looking to minimize costs. You have flexibility with payroll frequency. Many S-Corp owners do quarterly or even annual payroll to minimize processing fees, and that's perfectly acceptable to the IRS. Just make sure your total salary for the year meets the "reasonable compensation" standard. I personally do quarterly to keep things simple and to spread out my personal tax withholdings throughout the year.

This is really helpful advice, especially the point about quarterly estimated payments for 2025. I'm definitely going to look into the SEP-IRA contribution - I hadn't realized I could still make a contribution for 2022 that would reduce my SE income. The payment plan option is also something I need to seriously consider. Do you know if there are any penalties for setting up an installment agreement, or is it just the interest charges? My cash flow is pretty tight right now so spreading this out would be a huge relief. I'm also curious about the professional review suggestion - at what point does it make sense to pay for a second opinion? My tax situation isn't incredibly complex, but given the size of this SE tax bill, maybe it's worth the investment.