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I think you're in pretty good shape compared to some situations I've seen. The community wisdom around here is that PATH Act returns with changing as-of dates but stable processing dates are usually just working through the system normally. In my experience (and I've filed PATH Act returns for 6 years now), the pattern you're describing typically resolves with a deposit 1-2 weeks after your last as-of date change. The real red flags would be if you saw a 570 code without a 571 resolution, or if your processing date started moving backward, or if you got a 9001 code (verification needed).
That's really reassuring to hear! I've been stressing about this more than I probably should. The divorce has me extra worried about everything financial this year.
I completely understand the anxiety around filing changes after a divorce - you're definitely not alone in that feeling! As someone who went through a similar situation a few years back, I can tell you that the IRS system does take extra time when you're switching from married filing jointly to head of household, especially with custody-related credits. The pattern you're describing (accepted 1/16, as-of date moving but processing date stable at 2/17) is actually really common for PATH Act filers with new HOH status. I tracked my own return obsessively that first year and saw the exact same thing - as-of date jumped from 2/14 to 2/21 to 2/28 before I finally got my 846 code. One thing that helped me sleep better was understanding that the IRS automated systems are actually pretty good at catching legitimate returns versus fraudulent ones. Your return moving through the system with regular updates is a good sign that everything is processing normally, just slowly. Hang in there - based on what you've shared, you should see that 846 code soon!
Thank you so much for sharing your experience! It's really comforting to hear from someone who's been through the exact same situation. The divorce paperwork alone was overwhelming, and now dealing with all these new tax codes and filing statuses has me second-guessing everything. Your timeline actually matches pretty closely with what I'm seeing - my as-of date has moved three times now while everything else stays put. I think I just need to be patient and trust the process like you said. Did you end up getting your full refund amount when the 846 finally posted?
Just a heads up - if your kids are under 18 and it's a sole proprietorship, having them as W-2 employees can save you both from paying Social Security and Medicare taxes on their wages. That's a 15.3% savings right there! My accountant saved me a ton by setting this up correctly last year.
Does this work if my business is an LLC taxed as a sole proprietorship? Or only for actual sole props?
Yes, it works for an LLC taxed as a sole proprietorship too. The IRS treats them the same way for this purpose. The key is that you're reporting business income and expenses on Schedule C of your personal tax return. It doesn't work for LLCs taxed as corporations or for businesses that are actual corporations (S-corp or C-corp). In those cases, your children's wages would be subject to all the normal employment taxes regardless of their age.
One thing I haven't seen mentioned yet is documentation. Regardless of whether you go the W-2 or 1099 route, make sure you keep detailed records of the work your kids performed, hours worked (if applicable), and how you determined their pay. For seasonal work like yours, document what specific tasks they did - was it general labor following your direction, or more specialized independent work? Did they work set hours you assigned, or flexible schedules they controlled? These details matter a lot for proper classification. Also, consider having them fill out timesheets or work logs, even if they end up as contractors. It shows you're taking the classification seriously and helps protect you if there are ever questions. The IRS loves good documentation, especially with family business arrangements where they're naturally more suspicious. Since you mentioned this is your first time doing this, it might be worth consulting with a local tax professional who can look at your specific business structure and work arrangements. The potential penalties for misclassification often cost more than getting proper advice upfront.
This is excellent advice about documentation! I learned this the hard way when I got questions from the IRS about paying my nephew who worked in my landscaping business. They wanted to see everything - what he did, when he worked, how I supervised him, what equipment he used. One thing that really helped my case was that I had him write brief daily summaries of his tasks and I kept copies of any text messages where I gave him work instructions. It clearly showed the employer-employee relationship rather than an independent contractor arrangement. For anyone reading this - if your kids are doing work that's integral to your business operations (like helping with your core services), working during hours you set, using your tools/equipment, and following your specific instructions on how to do the work, they're almost certainly employees regardless of age or family relationship. The documentation Mateo mentioned will help support whatever classification you choose.
I've been self-employed for about 5 years now, and I've tried almost all the tax software options. Here's my two cents: TurboTax Self-Employed is good but expensive. It does handle Schedule C well and provides good guidance, but you're paying a premium for the brand name. H&R Block Self-Employed is similar in quality and price to TurboTax. TaxAct and TaxSlayer both handle Schedule C for significantly less money. FreeTaxUSA is my personal favorite - it handles Schedule C perfectly well, the interface is clean, and it's WAY cheaper than TurboTax. If your situation is truly simple as you describe (just income, standard deduction, QBI, and SE tax), any of these will work fine. The difference mainly comes down to how much guidance you want and how much you're willing to pay for it.
Do any of these help you identify potential audit triggers? That's my biggest fear with self-employment taxes - doing something wrong and getting audited.
TurboTax and H&R Block both have what they call "audit risk assessment" features in their more expensive tiers. They'll flag things that might increase audit risk like home office deductions, unusually large charitable contributions, or business expenses that seem disproportionate to your income. FreeTaxUSA doesn't have this feature specifically labeled, but it does have error checking that will identify obvious issues. In my experience, if you're reporting honestly and have documentation for your income and expenses, audit risk for a simple Schedule C is actually quite low. The key things the IRS looks for are unreported income and obviously inflated deductions.
One thing no one mentioned yet - if your self-employment income is below a certain threshold (I believe it's around $73,000 for 2024), you can use the IRS Free File program to file for free, including Schedule C. Different companies participate in this program, including some versions of TurboTax, TaxSlayer, etc. Just go through the IRS Free File portal rather than directly to the tax software websites, otherwise they'll try to upsell you. This is different from the "free" versions advertised on their websites, which typically don't support Schedule C filing.
I tried the Free File program last year and got partway through before being told I needed to upgrade because of my Schedule C. So frustrating! Did I do something wrong?
If you filed with a professional tax preparer last year, they might have your PIN or a copy of your return with the AGI on file. Worth giving them a call if that's how you filed. I completely forgot I had used H&R Block last year until I started panicking about my PIN, gave them a call, and they had everything I needed.
Another option if you're still stuck is to request an Identity Protection PIN (IP PIN) from the IRS if you qualify. This is different from your self-select PIN and can be used for identity verification when e-filing. You can check if you're eligible on the IRS website - they've expanded the program in recent years. Also, just a heads up that if you do end up creating a new self-select PIN this year, consider storing it in a password manager or writing it down somewhere safe along with your AGI. I learned this lesson the hard way after going through the same frustration you're experiencing! The IRS recommends keeping your prior year tax return easily accessible for exactly this reason.
StarStrider
I just want to echo what everyone else has said here - this is almost certainly a scam! The fact that they're directing you to a non-.gov website is the biggest red flag. I fell for something similar a few years ago and learned the hard way. One thing I haven't seen mentioned yet is that you can actually check if you owe the IRS any money for FREE by creating an account on the official IRS website (irs.gov) and looking at your "Tax Account" section. It will show you exactly what you owe, if anything, and any payments you've made. This way you'll know for sure if there's a legitimate debt before you even call them. Also, keep that fake letter as evidence when you report it to the IRS fraud department. They use these samples to help identify and shut down scam operations. Stay safe out there!
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Lola Perez
ā¢This is exactly what I needed to hear! I had no idea you could check your tax account online for free - that's such a simple solution. I'm definitely going to create an account on irs.gov first thing tomorrow morning to see if I actually owe anything before I stress out any more about this letter. I'll also make sure to keep the fake letter to report it. It's scary to think how many people might be getting the same scam letter in my area. Thanks for sharing your experience - sometimes hearing from someone who's been through it makes all the difference in knowing what to do!
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Zara Rashid
I'm dealing with something very similar right now! Got a letter yesterday with a CP503 notice code claiming I owe $3,247 from my 2022 return. Like yours, it had a suspicious website (irs-taxresolution.net) instead of the official irs.gov site. The letterhead looked convincing but something felt off about the whole thing. After reading through all these responses, I'm definitely not going to that website or calling their number. Going straight to the official IRS website to create an account and check my actual tax records. It's so frustrating that scammers are getting this sophisticated - they're really preying on people's fear of the IRS. Thanks to everyone who shared their experiences and tips here. This thread is going to save a lot of people from falling for these scams!
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