Have you tried reaching out to your local Taxpayer Advocate Service? They might be able to help if you're having trouble getting through to the IRS directly.

@Brady Clean mentioned the Taxpayer Advocate Service - that's actually a great suggestion! I used them last year when I was stuck in a similar situation. They're like a lifeline when the regular IRS channels aren't working. You can find them at taxpayeradvocate.irs.gov or call 1-877-777-4778. They're specifically designed to help when you're having problems getting through normal channels. Worth a shot before paying for third-party services!

What software are you using? I had the same confusion with TurboTax but they have a section that explains this. They specifically say that yes, NIIT is an additional tax on investment income - so your understanding is correct.

You're absolutely correct - this is indeed how the NIIT is designed to work! I went through the exact same confusion when I first encountered Form 8960. It does feel like double taxation because, in a way, it is. Think of the NIIT as a separate Medicare contribution tax that kicks in for higher-income earners. Your investment income gets taxed once as part of your regular income tax (on lines 2b and 3b of Form 1040), and then if your MAGI exceeds the threshold ($200K for single filers), that same investment income gets hit with an additional 3.8% tax. Your calculation looks spot-on: $20,250 in net investment income × 3.8% = $769.50. This is completely separate from and in addition to whatever regular income tax rate you're paying on that same $20,250. It's frustrating, but it's been the law since 2013 as part of the ACA. The good news is you're filling out the form correctly - many people get tripped up thinking they made an error when they see this "double taxation" effect for the first time.

I went through this exact situation with my daughter's ITIN. Here's what worked for me: 1. First, call the dedicated ITIN unit at 1-800-908-9982 2. Have your tax return info ready - they'll ask for the tax year and your information 3. Request a status check on the ITIN application 4. If they can't find it, ask if you should submit Form 4506-T to request verification 5. If no record exists, you'll need to reapply with a new W-7 6. When reapplying, consider using a Certified Acceptance Agent (CAA) who can verify your original documents 7. This prevents sending originals to the IRS The whole process took about 6 weeks once I reapplied properly.

I had a very similar experience with my nephew's ITIN application in 2022. What I learned from calling the ITIN hotline is that sometimes the applications get "suspended" in their system when there's a minor documentation issue, but they don't always notify you about it. In my case, the birth certificate copy I submitted wasn't clear enough, but instead of rejecting it outright, they just held the application in limbo. The agent was able to tell me exactly what was missing and I resubmitted just that document. Got the ITIN number about 8 weeks later. Definitely call 1-800-908-9982 first before doing anything else - they can see the status even if you never received any correspondence from them.

Don't forget about the estate tax loophole! The wealthy use trusts and life insurance to pass MILLIONS to their kids tax-free while regular people get nothing. The stepped-up basis at death is another huge advantage - all the capital gains on investments essentially disappear when assets are inherited.

The system really is designed with built-in advantages for different types of income and wealth levels. What frustrates me most is that many of these "loopholes" aren't actually loopholes - they're intentional policy decisions that favor capital over labor. For example, the carried interest provision that lets private equity managers pay capital gains rates (around 20%) instead of ordinary income rates (up to 37%) on what is essentially their salary. That's not available to regular employees no matter how good our accountants are. But there are some strategies middle-income folks can use that we often overlook: - Tax-loss harvesting in taxable investment accounts - Bunching itemized deductions in alternating years - Contributing to dependent care FSAs if you have kids - Taking advantage of the American Opportunity Tax Credit for education expenses The real barrier isn't just the cost of fancy accountants - it's that the most lucrative strategies require having significant assets or business ownership to begin with. You can't depreciate real estate you don't own, and you can't defer income you don't control the timing of. The system isn't broken by accident - it's working exactly as designed to reward wealth accumulation over wage earning.

Does anyone know if using a PEO (Professional Employer Organization) for remote workers changes the nexus situation? My client is considering using a PEO to handle their multi-state employees to simplify compliance.

This is such a helpful thread! I'm dealing with a similar situation with my consulting practice. One thing I learned the hard way is to also check if the states where your remote employees work have any specific registration requirements beyond just income tax filing. For example, some states require you to register as a "foreign entity" doing business in their state if you have employees there, even if you're just an LLC from another state. This can involve additional fees and annual reports that are separate from your tax filings. Also, don't forget about potential local taxes! Some cities and counties have their own business taxes or licensing requirements that might apply to businesses with employees working within their jurisdiction. It's not just about state-level compliance. I'd recommend creating a compliance calendar once you figure out all the filing requirements across the different states. Multi-state tax compliance can get overwhelming fast if you don't stay organized!