Has anyone ever been audited on this specific issue? I'm in the same boat (S Corp with about $275k in assets) and I've been scared to take distributions beyond my salary because I'm worried about triggering an audit.

This is exactly the situation I was in last year! One thing that really helped me was understanding the difference between your stock basis and your AAA (Accumulated Adjustments Account). Even though you've paid taxes on the S Corp profits over the years, if you've taken distributions along the way, those reduce your basis. Here's what I learned: your basis starts with your initial investment ($4k in your case), then increases with your share of S Corp income each year, and decreases with distributions you've already taken. So if your S Corp made $400k in profits but you took $396k in distributions over the years, your basis would still be around $4k. The key is getting an accurate calculation of your current basis before taking any large distribution. If you take distributions above your basis, the excess gets treated as capital gains (typically 15-20% tax rate depending on your income). Not the end of the world, but you want to plan for it. I'd definitely recommend working with a CPA who specializes in S Corps to run the numbers before you make any moves. They can help you optimize the timing and amount to minimize the tax hit.

Just FYI, I'm a tax preparer and see this ALL THE TIME. Those boxes are frequently $0.00 for people who: 1) Live in states with no local income taxes 2) Work remotely for a company in a different jurisdiction 3) Have certain types of exempt income The software validation is just overzealous error-checking. Use the override function (usually found in "advanced options" or by right-clicking the field). Don't change the actual values just to please the software - report what's actually on your W-2.

I actually just went through this exact same issue with my 2023 return! I was using H&R Block's software and it kept rejecting my W-2 because boxes 18 and 19 were $0.00. I spent way too much time second-guessing whether my employer had made an error. Turns out I live in Florida, which has no state income tax and no local income taxes either, so those zeros were completely correct. The software override function was buried in the "Forms" menu under "Override Options" - not exactly intuitive to find! What really helped me was looking up my specific city on the IRS website to confirm there were no local tax obligations. You can search for your locality in IRS Publication 15 (Circular E) which lists all the jurisdictions that require local income tax withholding. If your area isn't listed, then $0.00 is the correct amount to report. Don't let the software bully you into entering incorrect information - your W-2 is the official document and that's what should be reported to the IRS.

I filed an amended return last year for a similar situation - forgot to include a 1099-R from a small retirement account rollover. The whole process took about 18 weeks from e-filing to getting my additional refund deposited. What really helped me was setting realistic expectations from the start. The IRS website says "up to 16 weeks" but that's really the minimum you should expect, not the maximum. Most amended returns seem to fall in the 12-20 week range based on what I've seen in various tax forums. A few tips that made the wait more bearable: 1) Screenshot your e-filing confirmation - you'll want proof you submitted it correctly, 2) Mark your calendar for when you hit the 45-day mark (that's when interest starts accruing on your refund), and 3) Try to check the tracker only on Fridays since that's typically when they batch update the system. The money will come eventually, and honestly the interest made up for some of the frustration of waiting. Hang in there!

I'm going through this exact same situation right now! Filed in February, got my refund, then my accountant discovered I had completely missed a 1099-DIV from some dividend income. I've been waiting about 8 weeks since e-filing my 1040-X and it's still showing "received" status. Reading through everyone's experiences here is honestly such a relief - I was starting to panic that something went wrong with my filing. It sounds like 12-20 weeks is pretty standard, which is way longer than the "4-6 weeks" my tax software estimated, but at least now I know what to expect. One thing that's been helpful for my anxiety is remembering that the IRS owes ME money in this case, so they're not going to just lose my amendment or ignore it. Plus the interest after 45 days is a nice bonus I didn't know about until reading this thread. For anyone else in the same boat - definitely e-file if you can, save your confirmation receipt, and try not to check the tracker obsessively. Easier said than done, but this thread has convinced me to limit myself to weekly checks instead of daily!

This has been such a comprehensive and helpful discussion! As someone who was initially confused about this exact same issue, I really appreciate how everyone broke down the key distinction between personal and business expenses. What I found most valuable was learning that the IRS language specifically mentions payments made "in the course of your trade or business" - and since household services for your personal residence clearly don't fall into that category, no 1099 is required regardless of the amount. It's reassuring to see this principle apply consistently across so many different scenarios shared here. I'm definitely going to start keeping simple payment records for my household services too, not for tax compliance but for budgeting and peace of mind. It seems like such a small effort for potentially big benefits down the road. Thanks to everyone who shared their expertise and real-world experiences - this thread should be a go-to resource for anyone dealing with household service tax questions!

This thread has been incredibly thorough and helpful! I was actually dealing with this same uncertainty about our bi-weekly house cleaner who charges $120 per visit (about $3,120 annually). Like many others here, I was getting mixed signals online about 1099 requirements. The key insight that finally made everything click was understanding that the IRS only requires 1099s for payments made "in the course of your trade or business." Since paying for house cleaning services for your personal residence is clearly a personal household expense, not a business activity, the 1099 reporting rules simply don't apply - period. It doesn't matter if you pay $600 or $6,000 annually, and it doesn't matter whether your cleaner is technically an employee or independent contractor. For personal household services, there's no 1099 requirement because it's not a business expense. Your accountant gave you solid advice, and you can definitely trust their professional guidance on this. I'm also going to implement the suggestion about keeping simple payment records (date, amount, method) - not for tax compliance, but for my own budgeting and potential future reference. Thanks to everyone who contributed to this discussion. The consistency of advice from multiple professionals and the real-world examples really reinforced the core principle and put my mind at ease!

Also worth noting - if you do find out you have debts that will be offset, you can sometimes set up payment plans to avoid losing your entire refund. I had success calling the agency that held my debt directly and working out a deal before filing. They were actually pretty reasonable about it.

Pro tip from someone who got burned twice: also check if you owe anything to your state's Department of Labor for unemployment overpayments. Those can sneak up on you and they don't always show up in the federal system right away. Found out the hard way when they grabbed my state refund first, then my federal one got hit too for a different debt. Now I check everything before filing - federal, state, and local if your city does income tax.