Thanks for bringing this up - I don't have employees right now but I'm planning to hire a part-time assistant next quarter. Would the non-discrimination rules apply even for part-time workers? Or is there a hours-worked threshold?

For health insurance specifically, the non-discrimination rules generally apply to employees working 30+ hours per week (considered full-time under the ACA). Part-time employees working fewer hours typically don't need to be offered the same health benefits. However, if you establish a health reimbursement arrangement (HRA) or other formal health benefit plan, different rules might apply. With a QSEHRA (Qualified Small Employer HRA), for example, you'd need to offer the same benefits to all eligible employees, but you can exclude part-time workers.

That's actually incorrect and could get you in trouble during an audit. Health insurance for >2% S Corp shareholders can't be handled through an accountable plan. It must be included on your W-2 as income (though not subject to FICA) and then deducted on your personal return. The IRS has specific rules for this situation outlined in Notice 2008-1. Using an accountable plan for health insurance reimbursement for a >2% shareholder is incorrect treatment and could result in the deduction being disallowed plus potential penalties.

Thanks for the advice! I do have texts with my uncle confirming he had all three W-2s bundled together when he dropped them off. I wasn't sure if that would help since it wasn't direct communication with the tax preparer. Did you have to be super pushy with H&R Block to get them to cover the penalties?

Those text messages are a good start! You want to establish a paper trail showing you had the intention of filing completely and accurately. No, I didn't have to be super pushy with H&R Block, but I did need to be persistent and speak with a manager rather than just the first person who answered the phone. I made sure to remain calm but firm that this was their error, not mine. I brought copies of all my documentation to the meeting. Most importantly, I referenced their "Maximum Refund Guarantee" and "Accuracy Guarantee" specifically, which most of these big companies advertise. Ask Jackson Hewitt about their specific guarantees and policies for preparer errors - they should have something similar.

Is there a specific format or language we should use for this letter? I'm in a similar situation and don't want to say something wrong that could make things worse.

That's actually really helpful to know! The full amount is a bit tough for me right now. How much is the interest rate if I go with a payment plan? And are there any specific issues with setting one up as an international student?

The interest rate is currently around 5% (it's the federal short-term rate plus 3%), and it's compounded daily. There's also a one-time setup fee of about $31 if you set up direct debit payments online. For international students, the main consideration is making sure you can complete all payments before your visa expires if you're planning to leave the US after graduation. Also, ensure your payment method will work internationally if you'll be making payments after returning to your home country.

Is that the same as the "substantial presence test" form? My tax software mentioned something about that but I wasn't sure if it applied to me.

I worked with Johnson Tax Law in Chicago and had a really good experience. They specialize in tax resolution and don't make unrealistic promises like some of the big advertised firms. They were upfront about costs and what could realistically be achieved.

That's a great point about the collection statute. Some of this debt is from 2018-2019, so not quite close to the 10-year mark yet. And thank you for the reminder about capital gains - I hadn't even thought about how liquidating stocks would affect this year's taxes. Definitely need to be strategic about that.

That's a great point that I hadn't even thought about! Did you find that the insurance increase was significant? And did you end up getting permits retroactively or did you have to make modifications to the structure?

My insurance went up about $240 annually, which wasn't too bad considering I had about $8,000 worth of equipment in there. The bigger surprise was that my property assessment increased after the county assessor noticed the new structure, which raised my property taxes by about $350/year. For the permits, I had to apply retroactively and pay a penalty fee (about $150 extra). I also had to make some modifications - mainly adding a specific type of smoke detector and upgrading the electrical work to meet code. The good news is that all of these costs were partially deductible for my business since I use the space 70% for business purposes.

Your CPA might be thinking about Section 179 expensing instead of regular depreciation. With Section 179, you might be able to deduct the full cost in the year you place it in service rather than depreciating over many years. There are limits though.