Quick tip from someone who got audited last year - the IRS specifically reviewed my office supply deductions! They accepted my credit card statements for small purchases (under $75) when combined with my written business expense log showing what each item was used for. But for my laptop and printer purchase, they absolutely required the itemized receipts showing exactly what I bought. The agent told me their internal guideline is that detailed receipts are more important the larger the purchase and the more potentially "personal" the item could be. So definitely keep those detailed receipts for technology, furniture, etc!

Based on my experience running a small consulting business, I'd recommend implementing a hybrid approach for your documentation. Credit card statements are definitely part of the puzzle, but you'll want to supplement them with additional records. Here's what I've found works well: Keep your credit card statements as your primary transaction record, but create a simple spreadsheet that links each business charge to additional details - what was purchased, business purpose, and whether you have a receipt. For online purchases, those email confirmations are gold - create a dedicated email folder and save them all there. For physical receipts you've already lost, try reaching out to the vendors. Many can provide duplicates if you have the transaction date and last 4 digits of your card. Going forward, I'd suggest taking photos of receipts immediately after purchase and storing them in a cloud folder organized by month. The key is showing the IRS you made a good faith effort to maintain proper records. Even if some documentation is imperfect, having a systematic approach demonstrates business intent, which is what they're really looking for with sole proprietors using personal cards.

Has anyone actually gotten in trouble for incorrectly claiming exempt as a nonresident? My roommate did this for like 2 years on his F-1 visa and never had any issues with the IRS...

I went through a similar situation last year as a nonresident alien on an H-1B visa. You're absolutely correct that nonresident aliens cannot claim exempt status on W-4 forms, even if they would otherwise qualify under the standard exemption rules. Don't stress too much about your previous W-4 mistake - it's more common than you think! The key thing is to correct it going forward. Submit a new W-4 to your employer immediately following the special nonresident alien instructions (mark "Single," write "NRA" on the form, and don't claim exempt). If your employer didn't withhold enough tax due to the exempt status you claimed, you'll likely owe the difference when you file your return. As long as you file on time and pay what you owe, you shouldn't face serious penalties for an honest mistake like this. The IRS understands that nonresident tax rules can be confusing. I'd recommend keeping good records of when you submit your corrected W-4 and maybe even following up with your HR department to make sure they process it correctly. Some payroll systems need manual adjustments for nonresident aliens.

I've seen this pattern on many transcripts, and you're absolutely right to be confused - the IRS doesn't make these easy to understand! Those paired 766/846 codes with matching amounts are completely normal and typically indicate credits being processed and then refunded to you. Given the $310 amounts repeating 8 times throughout the year, this sounds exactly like the Advanced Child Tax Credit payments that were distributed monthly from July through December in recent tax years. Each month, the IRS would apply a credit to your account (766 code) and then immediately refund it to you (846 code) since you likely had no remaining tax liability. The negative amount on the 766 line might look scary, but it's actually good - it means the credit is reducing what you owe (or in this case, creating a refundable amount). The corresponding positive 846 amount shows that money being sent to your bank account. To double-check, look at the dates on these entries and see if they correspond to monthly deposits you received between July and December. They should match up with direct deposits labeled something like "CHILDCTC" or "IRS TREAS" in your bank account. If you want absolute certainty about what each pair represents, you can always contact the IRS, but based on your description, this looks like a completely normal Advanced Child Tax Credit payment history.

As someone who recently went through this exact same confusion, I can confirm what others have said - those paired 766/846 codes are completely normal! I had the same pattern on my transcript with multiple entries throughout the year. In my case, it turned out to be a combination of the Advanced Child Tax Credit payments (which would explain your $310 amounts if you have children) and one adjustment from a processing correction the IRS made to my return. Here's what I'd recommend: First, check your bank statements from last year and look for deposits that match the dates and amounts of your 846 codes. They might show up as "IRS TREAS", "CHILDCTC", or similar labels. Second, count how many 766/846 pairs you have - if it's around 6 pairs, they're likely the monthly child tax credit payments from July through December. The good news is that these codes indicate your account is processing normally. The 766 applies the credit, and the 846 sends you the money since you don't owe additional taxes. If anything seems off after checking your bank records, you can always call the IRS for clarification, but this pattern is very typical for people who received advance child tax credit payments.

Don't forget you also need to pay yourself a reasonable salary as an S-corp owner!!! The IRS watches this closely. You can't just take all distributions and no salary to avoid payroll taxes. My friend tried that and got audited.

Just went through this exact situation with my consulting LLC that elected S-corp status! After all the confusion, here's what I learned: You definitely need Form 1040-ES for your personal estimated tax payments. Since you're a single-member LLC with S-corp election, the business profits flow through to your personal return, so you make estimated payments as an individual. The 1120-W would only apply if your S-corporation itself owed taxes (like built-in gains tax), which is rare for small businesses like ours. One thing that helped me was calculating my estimated payments based on last year's tax liability using the safe harbor rule - if you pay 100% of last year's taxes (or 110% if your AGI was over $150K), you won't face penalties even if you owe more this year. Also make sure you're withholding enough from your S-corp salary for payroll taxes. The estimated payments with 1040-ES should cover the income tax on your distributions, but your salary withholding needs to handle that portion separately. Hope this helps while you wait for your accountant to return!

Just wanted to add a practical tip for tracking everything - I use a simple spreadsheet with columns for date, description, amount, and category (income vs different expense types). Takes like 2 minutes per transaction but saves hours during tax time. For your specific situation with $75k W-2 + freelance, definitely consider the increased withholding route if your payroll allows it. Much less stress than remembering quarterly dates! I did quarterly payments my first year and missed the January deadline because I was on vacation - ended up with a small penalty that could have been avoided. One thing I wish someone had told me earlier: open a separate checking account just for your freelance income and expenses. Makes tracking SO much easier, and you can automatically transfer your estimated tax percentage (I do 30%) to a savings account every time you get paid. That way the money is already set aside and you're not scrambling come tax time.

Great advice in this thread! I'm dealing with a similar situation - W-2 job plus freelance design work. One thing that really helped me was using Schedule SE to double-check my self-employment tax calculations. It shows exactly how the Social Security wage base limit applies when you have both W-2 and self-employment income. For anyone wondering about the "double taxation" concern - you're not actually double-paying. Think of it this way: on your W-2 job, you and your employer each pay 7.65% (totaling 15.3%). When you're self-employed, you're wearing both hats, so you pay the full 15.3%. But the good news is you get to deduct half of that self-employment tax (the "employer" portion) on your 1040, which helps offset some of the burden. Also, don't forget about estimated tax penalties if you don't pay enough throughout the year. The safe harbor rule is helpful - if you pay at least 100% of last year's tax liability (or 110% if your prior year AGI was over $150k), you won't face penalties even if you owe at filing time. This can be especially useful in your first year of freelancing when income is unpredictable.