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Had this happen with my tax prep too! Don't stress - as long as the SSN is right, you should be good. The IRS matching system is pretty forgiving with name variations. My preparer put "Jon" instead of "John" for my son and everything went through fine. If you're really worried, you can always call the IRS helpline to double check, but honestly I wouldn't lose sleep over it.
This is so reassuring to hear! I was literally up all night worrying about this. My preparer switched the first and middle names around for my daughter but got the SSN perfect. Sounds like I should be okay based on everyone's experiences here. Thanks for sharing! π
Same thing happened to me 2 years ago! My preparer misspelled my youngest's first name (put "Sophia" instead of "Sofia") but had the correct SSN. Got my refund in about 2 weeks with no issues. The IRS system really does prioritize the SSN match over name spelling. You should be totally fine, but if it makes you feel better you can always check your transcript on the IRS website once it's processed to see if there were any flags.
Has anyone considered switching from C-corp to S-corp for their rental LLC? Our accountant mentioned it could help avoid potential PHC issues altogether since S-corps don't face PHC tax. We have a similar setup with 4 properties that we self-manage.
We made that switch two years ago and it simplified things a lot. No more worrying about PHC status, and the pass-through taxation is more straightforward. Our tax prep fees actually went down slightly too. Just remember there's a deadline to make the S election - generally March 15th for existing corps.
Great question! Based on your description, your LLC likely doesn't qualify as a PHC. The key test is whether 60% or more of your adjusted ordinary gross income comes from "personal holding company income" (like dividends, interest, royalties). Active rental income from properties you manage yourself typically doesn't count as PHC income under IRC Section 543. Since you're handling showings, tenant screening, maintenance coordination, and day-to-day operations, the IRS would likely view this as an active trade or business rather than passive investment activity. The management fees you pay yourselves are actually a good practice that further demonstrates the active nature of your business. Just make sure those fees are reasonable and properly documented. One thing to watch: if you ever start receiving significant passive income (like interest from large cash reserves or dividend income), that could potentially push you closer to the 60% threshold. But with just rental income from actively managed properties, you should be fine. Keep good records of your management activities as others have mentioned - it's always smart documentation to have!
This is really helpful! I'm new to rental property investing and just bought my first duplex. I plan to self-manage it and was worried about all these tax complications I keep reading about. It sounds like as long as I stay actively involved in managing the property, I shouldn't have to worry about PHC status. One follow-up question - you mentioned watching out for passive income pushing toward the 60% threshold. What would be considered "significant" passive income in this context? Like if I keep $20K in business savings earning interest, would that be a concern?
Has anyone compared FreeTaxUSA vs TaxHawk for 2024? I know they're owned by the same company but sometimes their features differ slightly.
They're basically identical in terms of features and forms they support. The biggest difference is just branding and sometimes minor UI elements. I've used both and ended up with the exact same refund amount. One small difference is that TaxHawk sometimes offers slightly different promotional discounts, but the base prices are the same. I think FreeTaxUSA has more name recognition though, which is why I stick with it.
Thanks for the heads up! I've been procrastinating on getting my tax stuff organized, so having FreeTaxUSA available early is perfect timing. I switched to them two years ago after getting fed up with TurboTax's pricing and haven't looked back. One thing I love about being able to access it this early is that I can play around with different scenarios - like seeing how much extra I might owe if I do some Roth conversions before year-end, or what my refund would look like if I max out my HSA contributions. Really helps with year-end tax planning instead of just scrambling to file in February. Has anyone noticed if they've added any new features for 2024, or is it pretty much the same interface as last year?
I'm new to FreeTaxUSA but this early access feature sounds really useful! I've been using TurboTax for years but their prices keep going up every season. Can you walk me through what the interface is like compared to TurboTax? I'm a bit nervous about switching but the cost savings seem worth it. Also, when you mention playing around with different scenarios - does FreeTaxUSA let you save multiple versions or do you have to keep re-entering information to test different situations?
I'm dealing with this exact situation right now too! Got my letter with the 14-digit control number yesterday and immediately started panicking. Reading through everyone's experiences here has been such a relief - sounds like it's really just their internal tracking system and not the end of the world like I was imagining! π I love the tip about calling right at 7 AM - definitely going to try that tomorrow morning. Has anyone had success with the online account option on the IRS website? I'm wondering if I can find any additional info there before making the call. Also planning to gather all my tax docs tonight so I'm prepared. Thanks to everyone sharing their stories - it's so helpful to know we're not alone in feeling overwhelmed by these letters! The tax system really could use some plain English translations π
Hey Omar! I actually tried the online account option when I got my letter a few weeks ago. You can definitely log in and see some basic info about your case, but honestly the letter itself usually has more details than what shows up online. Still worth checking though - sometimes there are additional documents or forms available for download that can help clarify what they're looking for. The online account is also great for checking the status of any responses you send them later. Good luck with your 7 AM call strategy - hope you get through quickly! π€
Just wanted to jump in here as someone who recently went through this exact same thing! Got my letter with the 14-digit control number about 3 weeks ago and was absolutely terrified at first. After reading everyone's amazing advice here, I followed the early morning calling strategy and got through in about 20 minutes on a Wednesday at 7:15 AM. The agent was super patient and walked me through everything step by step. Turns out they just needed me to verify some freelance income from a 1099 that had a small discrepancy. The whole thing was resolved in one phone call! I can't stress enough how much having all your documents organized beforehand helps - I had my tax return, all my 1099s and W-2s, and the letter itself right in front of me. Made the conversation so much smoother. To everyone still dealing with this - take a deep breath! It really is way less scary than it seems. That 14-digit number is just their filing system, nothing more. You've got this! π Also want to echo what others said about not ignoring the letter - even if you can't figure everything out immediately, at least call to acknowledge it. The IRS agents I spoke with really appreciated that I was being proactive about resolving it.
Aisha Mahmood
As someone who just went through this exact process for my Instagram Reels monetization, I can confirm everything mentioned here is spot on! The ITIN application definitely seems intimidating at first, but it's totally manageable once you break it down. One additional tip I'd add: when you're gathering your supporting documents for the W-7 form, make sure everything is consistent. I initially had slight variations in how my name appeared on different documents and it caused a delay in processing. The IRS is very particular about exact matches. Also, if you're planning to scale your content creation beyond just TikTok, getting your ITIN now is definitely the right move. I've been able to monetize across multiple US platforms with the same number, and it's opened up opportunities I wouldn't have had otherwise. The waiting period is tough (mine took about 9 weeks), but once you get that letter with your ITIN, it feels amazing to finally be able to properly monetize your content. Definitely worth pushing through the paperwork!
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Paolo Conti
β’This is such valuable advice about document consistency - I hadn't even thought about that potential issue! It's really helpful to hear from someone who actually encountered that specific problem during the process. Your point about scaling beyond TikTok really resonates with me too. I'm already thinking about potentially expanding to YouTube and other platforms once I get more comfortable with content creation, so having the ITIN ready for all of them makes total sense. Nine weeks feels like forever when you're excited to start monetizing, but I guess it's better to get it sorted properly from the beginning rather than rushing and having to deal with delays or rejections. Thanks for sharing your experience!
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Freya Nielsen
Hey Diego! I went through this exact same situation about 8 months ago when I got into TikTok's Creator Fund as a UK resident. The whole ITIN process was definitely confusing at first, but it's absolutely doable! A few things I learned that might help: 1. You definitely need an ITIN, not an SSN - the IRS Form W-7 is what you'll be filling out 2. The key is getting a letter from TikTok stating they require your TIN for tax reporting purposes - this qualifies you to apply even before earning income 3. DO NOT mail your original passport! I cannot stress this enough. Find a Certified Acceptance Agent in Australia through the IRS website directory 4. Budget about 8-12 weeks for processing, longer during tax season (Jan-April) 5. Look into the US-Australia tax treaty to reduce your withholding from 30% to 15% - you'll need to file a W-8BEN form later The waiting period is tough when you're excited to start earning, but once you get your ITIN, you're set not just for TikTok but for any other US platform you might want to join later. YouTube, Instagram Reels, Twitch - they all use the same number. Feel free to ask if you have any specific questions about the process. Good luck with your content creation journey!
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Ingrid Larsson
β’This is incredibly helpful, Freya! Thank you for such a detailed breakdown from someone who's actually been through the process recently. I'm particularly grateful for the warning about not mailing the original passport - that was definitely one of my biggest concerns. The Certified Acceptance Agent route sounds much safer, even if there's a fee involved. Quick question about the timeline: when you say 8-12 weeks for processing, is that from when the IRS receives your complete application, or from when you first submit it? I'm trying to plan when to start this process relative to when I want to begin monetizing my content. Also, did you find TikTok responsive when you requested the letter stating they need your TIN for reporting purposes? I'm hoping they have a standard process for this since it must be a common request from international creators. Thanks again for sharing your experience - it's really reassuring to hear from someone who successfully navigated this!
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StarSailor
β’The 8-12 weeks is from when the IRS receives your complete application package. So factor in mailing time if you're sending from Australia - probably add another 1-2 weeks for international delivery. TikTok was actually pretty good about providing the letter! I contacted their creator support through the app and explained I needed a letter stating they require my TIN for tax withholding/reporting purposes for my ITIN application. They had a template ready and sent it within about 5 business days. Just make sure to mention it's specifically for IRS Form W-7 - they seem familiar with the process. One more tip: when you do get your ITIN, keep that letter in a safe place! You'll need the number for all future US tax filings and platform applications. The IRS doesn't make it easy to get a replacement if you lose it. Hope this helps with your planning! The whole process feels overwhelming at first but it's really just a matter of following the steps methodically.
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