Death and... Taxes.

Aychamo BanBan

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The S-corp can retain earnings instead of making the full shareholder distribution, but the shareholders are still on the hook for taxes even if they didn't actually receive the income. Generally, you want to run things so that paying the shareholder distributions doesn't create cash flow problems.

How to Distribute Net Profits Before Year's End for an S Corp

"The Problem With Retained Earnings
As previously discussed, an S corp. is a pass-through business, in which the firm pays no taxes. Instead, the firm's owners, or shareholders, pay all taxes as well as penalties.
"Keep in mind that the previous year’s closing balance in the retained earnings account is used as the opening balance the following year," says Upcounsel. Holding retained earnings past the year's end and into the next year can generate such problems as:
  • Shareholders are taxed on a percentage of the profits, whether or not they end up receiving the money thereafter.
  • If the S corp. has a silent partner investor, this individual might not be happy with paying taxes on profits that she may not actually receive, particularly if she doesn’t have authority over how the earnings will be handled after taxes are paid.
The very reason for the existence of an S corp., per IRS rules, is that its shareholders pay all taxes, penalties, etc. This means that the S corp. shareholders should generally receive all earnings before year's end.
"

Sincerely thank you. That helps out. How nuts right?

So let me ask you, a company like Apple, that has like 80 billion in the bank, what structure are they using?
 

Captain Suave

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So let me ask you, a company like Apple, that has like 80 billion in the bank, what structure are they using?

Apple is a C-corp, of the multinational variety (MNC/MNE). I don't think you can be an S-corp with more than $5M/yr in gross receipts.
 
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Nija

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Creditkarma won't do state taxes for me this year, as I lived and worked in two different states.

I don't want to use turbo tax.

What do?
 

a c i d.f l y

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Creditkarma won't do state taxes for me this year, as I lived and worked in two different states.

I don't want to use turbo tax.

What do?
Hrblock.com?

I'm still annoyed I had to pay $30 to account for my HSA so I would owe $166 less. Fuck you TurboTax and me for being to lazy to submit everything through someone else. (most charge for HSA filings, too)
 

Nija

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Hrblock.com?

I'm still annoyed I had to pay $30 to account for my HSA so I would owe $166 less. Fuck you TurboTax and me for being to lazy to submit everything through someone else. (most charge for HSA filings, too)
Isn’t hrblock just as bad as TurboTax?
 

a c i d.f l y

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Isn’t hrblock just as bad as TurboTax?
Not as blatantly predatory or scandalous. From a corporate perspective, they're not bad (if you actually go into their offices, they will actually do their best to help you, from my experience at least).
 

Nija

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Not as blatantly predatory or scandalous. From a corporate perspective, they're not bad (if you actually go into their offices, they will actually do their best to help you, from my experience at least).

I went ahead and used them. Cost me nearly $150 to do it all myself. Just a few years ago I was paying someone $200 to do it!

I had to get a version upgrade because I lived and worked in two states. Then it's $36 (which is discounted from $44) per state to file. Plus audit protection. Christ.

Oh well, done deal. What's interesting is that the state of Arkansas gave me a $1700 credit because I paid over $3k in taxes to CA. I've heard AR is fair when you pay out of state taxes. A cousin of mine had her gambling taxes from an OK Indian casino come across as a straight credit in AR. It was only something like $120, so it probably covers 100% up to some value, but still. Every little bit counts.
 

Pogi.G

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Anyone with a finance degree know if the penalty for early withdrawal of IRA is included as income for tax purposes, or do you only report the withdrawal amount post penalty as income?
 

Kinner

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Anyone in Dfw have a good tax person that maximizes everything for you but keeps it legal. Divorced this past year and going to end up having some complex things on my taxes due to that, kids, K1, dividend income, etc this year and I fucking hate doing taxes.
 
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Borzak

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Gotta figure out what the capital gains are going to be on a house and land sale. The house had been put in my name maybe 15 years ago. I did not live there, my grandmother paid the property taxes which were almost nothing. So in total I have sank 0$. Just poking around it looks complicated. The CPA I used for the last 25 years in both states of LA and TX died :(
 

Locnar

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Anyone in Dfw have a good tax person that maximizes everything for you but keeps it legal. Divorced this past year and going to end up having some complex things on my taxes due to that, kids, K1, dividend income, etc this year and I fucking hate doing taxes.

This is what all of them are supposed to do, but i've found they all waaaaay overextend and overbook themselves and you just HAVE to review the return they prepare for your with a fine tooth comb and do research yourself to double check on them and inquire about additional tax savings you think you can get but they did not go for. Sucks but truth.
 
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Jysin

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Anyone else waiting an absurdly long time for their tax refund?

Filed mine on May 23rd (previously filed an extension), it was e-filed and accepted on the same day. Here we are now over 2 months later and still haven't seen my tax return. Their tracking service still says it is processing.

Never in my life have I waited this long.
 

Kinner

Clear eyes. Full Hearts. Can't lose.
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Anyone else waiting an absurdly long time for their tax refund?

Filed mine on May 23rd (previously filed an extension), it was e-filed and accepted on the same day. Here we are now over 2 months later and still haven't seen my tax return. Their tracking service still says it is processing.

Never in my life have I waited this long.
Filed mine by April 2nd. Still no refund. Talked to my cpa, same story from multiple people.
 

Tmac

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Anyone else waiting an absurdly long time for their tax refund?

Filed mine on May 23rd (previously filed an extension), it was e-filed and accepted on the same day. Here we are now over 2 months later and still haven't seen my tax return. Their tracking service still says it is processing.

Never in my life have I waited this long.

Just got mine today, but it’s got a bunch of asterisks in the amount field, so I have no idea how much or little it is.

Looks like “***************7*56**”.
 

Borzak

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Filed mine by April 2nd. Still no refund. Talked to my cpa, same story from multiple people.

Saw a story earlier in the year that people that having checks mailed would take longer because the IRS ran out of ink for printers and the stuff to be recycled and printer stuff wasn't being picked up. Can't make this shit up, feds running out of ink.
 

Falstaff

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My mother in law's tax guy is an idiot so I have a question if people know or have experience with this...

Does anyone know how the gift tax works? I understand there is a yearly limit of 15k per person before you are taxed on it, but everything I read says there is also a lifetime maximum of 13M or something before any taxes are owed. What am I missing with this interpretation? Will she have to pay anything? My guess is that she should file the gift tax form but she won't have to pay anything on it unless/until she reaches that lifetime limit, but I could be missing something.
 

fred sanford

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My mother in law's tax guy is an idiot so I have a question if people know or have experience with this...

Does anyone know how the gift tax works? I understand there is a yearly limit of 15k per person before you are taxed on it, but everything I read says there is also a lifetime maximum of 13M or something before any taxes are owed. What am I missing with this interpretation? Will she have to pay anything? My guess is that she should file the gift tax form but she won't have to pay anything on it unless/until she reaches that lifetime limit, but I could be missing something.

She can gift $15k to as many individuals she wants in a year, year after year until she gets to the lifetime max.

Going over the $15k annual amount on an individual is taxed, with exceptions for spouses
If you go over $15k in a year for an individual you can file IRS form 709 to make it part of your lifetime max.


"Say you gave $15,000 each to nine friends in 2021 and $100,000 each to your spouse and your child. The nine gifts are all covered by the annual exclusion. For your spouse, the spousal exemption covers the entire amount. Only the child's gift is subject to tax, with the first $15,000 tax-free and the remaining $85,000 uncovered.

However, you're allowed to apply the $85,000 against your $11.7 million lifetime exemption amount. That would leave you $11,615,000 to use for future gifts or as your estate tax exemption at death.

The catch here, though, is that you have to file a gift-tax return on IRS Form 709 in order to claim the lifetime-exemption amount. With gifts subject to the annual, marital, charitable, educational, or medical exemptions, filing is rarely necessary."
 
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Captain Suave

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Anyone have experience with 529 plan rollovers? I had one for my son that I started funding in a state with an income tax deduction for contributions. I no longer live there, and for sanity I want to consolidate all my assets in a single portal and would like to roll that plan over into a new one with better fund choices and lower costs. It appears that the original state will want to recapture the income tax benefit I received, but no one can seem to tell me if I will also be on the hook for potential penalties or interest, or even if there is a statue of limitations on the recapture.

Has any of you guys done this before?