A quick tip if you do take this job - I make a deduction worksheet for all 1099 work. Track mileage between work sites (not commuting), any supplies you buy, portion of phone/internet if you use them for work, professional subscriptions, software, etc. Keep ALL receipts, take photos of them with your phone right away (they fade!). Also track any home office space if you do some work from home.

Just wanted to add another perspective here - I was in almost the exact same situation last year (required to work in their office, set schedule, but given a W9). After doing some research, I decided to take the job but immediately started documenting everything that showed I was really an employee, not a contractor. Things like: emails about required work hours, office policies I had to follow, equipment they provided, training materials, etc. After 6 months, I filed Form SS-8 with the IRS to get an official determination on my classification. The IRS ruled I was misclassified as a contractor and should have been an employee. Long story short - I got a refund for the extra self-employment taxes I paid, and my employer had to reclassify me and pay their portion of payroll taxes going forward. It was a bit of a process but totally worth it financially. If you take this job, document everything that shows they control how, when, and where you work. It could save you thousands later if you need to challenge the classification.

Just a heads up on something that surprised us during our C to S conversion last year - the Accumulated Adjustments Account (AAA) tracking became really important. After conversion, you'll need to carefully track AAA which is basically the post-conversion retained earnings that have already been taxed at the shareholder level. When you eventually distribute proceeds from property sales, the ordering rules for distributions can get tricky between AAA, accumulated E&P from the C corp days, and other sources. Our accountant messed this up initially and it almost resulted in some distributions being incorrectly taxed as dividends when they should have been tax-free returns of already-taxed income.

One thing I haven't seen mentioned yet is the potential impact of state taxes on this strategy. While the federal tax benefits of converting from C corp to S corp are well-documented, some states don't recognize S corp elections or have their own built-in gains taxes that could significantly impact your overall tax savings. For example, some states will continue to tax the entity as a C corporation even after federal S election, which could eliminate much of the benefit you're hoping to achieve. Other states have their own recognition periods or different rules for built-in gains. Given that you're dealing with real estate, you'll also want to consider whether your state has any special provisions for real estate held in corporate entities. Some states have additional taxes or fees for corporations holding real property that could affect your cost-benefit analysis. I'd strongly recommend getting state-specific advice from a tax professional familiar with your jurisdiction before moving forward with the conversion. The federal tax savings could be completely offset by unexpected state tax consequences.

Another option to consider is leasing instead of buying. My brother runs a transportation service for people with disabilities and he found that leasing the handicap vans gave him better tax advantages in his situation. The entire lease payment was deductible as a business expense (for the business use percentage), and he didn't have to worry about depreciation calculations. Just something to think about if you're not set on owning the vehicle outright!

Don't forget to look into potential ADA tax credits too! If your business qualifies as a "small business" under ADA guidelines (generally under $1 million in revenue or fewer than 30 employees), you might be eligible for the Disabled Access Credit, which could cover some of the cost of the accessibility modifications to the van. It's IRS Form 8826, and it can be taken in addition to your regular business deduction for the vehicle. It's specifically designed to help small businesses cover the costs of making services accessible to people with disabilities.

Has anyone looked into whether it's possible to request a waiver from the IRS for this situation? I'm a student from Brazil with a tiny equity stake in a startup I interned for, and filing these complex forms is not just expensive but extremely confusing. There must be some kind of reasonable exception for foreign persons with minimal ownership and zero distributions?

I went through this exact situation last year as a German resident with a small stake in a US LLC. After initially panicking about the filing requirements, I found a middle-ground approach that worked well for me. First, I contacted the partnership directly and asked if they could elect to withhold taxes at the entity level under Section 1446. This would have eliminated my individual filing requirement, but unfortunately they declined due to the administrative burden on their end. Since I had to file anyway, I used a combination of the resources mentioned here - I used Claimyr to actually speak with an IRS agent who confirmed exactly what I needed to file, then used an online tax service to prepare the forms. Total cost was around €300, which while annoying for zero income, gave me peace of mind. The key insight from my IRS call was that as a German resident, I could potentially benefit from loss allocations in future years if the company becomes profitable, so maintaining compliance now could actually save me money later. Also learned that my 3% ownership meant I didn't need the more complex reporting forms that kick in at higher percentages. My advice: don't just give up your equity stake without understanding the full picture. A one-time consultation to understand your specific situation and obligations is worth the cost to make an informed decision.

Another thing to consider - if you have zero activity, you can file for "Administrative Dissolution" in many states which is much simpler than the full process. Basically you stop filing annual reports with the state and they eventually dissolve you automatically. Downsides: 1) Takes longer 2) You might get hit with penalties before dissolution 3) Still need to file final federal returns But some people find it easier than the formal process.

I went through this exact same situation last year with my dormant S-Corp. One thing that really helped me was creating a dissolution timeline and checklist before starting anything. Here's what worked for me: 1. First, I verified all prior year returns were filed (as Hassan mentioned - super important!) 2. Filed Form 966 within 30 days of formally adopting the dissolution plan 3. Used 2023 forms for my final 1120-S and K-1, clearly marked "FINAL RETURN - SHORT TAX YEAR" at the top 4. Attached a brief statement explaining the dissolution date and why I was using prior year forms The key thing I learned is that the IRS is very familiar with this timing issue. As long as you're clear about what you're doing and why, they handle it routinely. One tip: even though there was zero activity, I still had to complete all the required sections of the forms. Don't leave anything blank - put zeros where appropriate and make sure all signature lines are completed. The IRS can reject incomplete forms even if the amounts are all zero. Also double-check your state requirements! Some states want you to file state dissolution paperwork before the federal forms, others don't care about the order.