Thanks for all the helpful responses everyone! I'm feeling much more confident about this now. Just to make sure I understand the process correctly: 1. Make the two credit card payments first (through approved payment processors) 2. Wait 1-2 days for them to process and show up in my IRS account 3. Use Direct Pay for the remaining balance One follow-up question - when I'm making the credit card payments, do I need to specify which tax form they're for? I filed a 1040 with a Schedule C, so I want to make sure the payments get applied to the right place. Also, is there a way to check online that all my payments have been properly applied before the deadline? The reward calculation definitely makes sense for my situation since I'm working toward a signup bonus on one card and have a 2% cashback card for the other payment. Even with the processing fees, I'll come out ahead.

Just wanted to chime in with my recent experience doing exactly this! I had a $6,200 tax bill last month and used two credit card payments of $2,000 each, then paid the remaining $2,200 through Direct Pay. A few practical tips from my experience: - Make sure you're using the official IRS-approved payment processors for credit cards (PayUSAtax, Pay1040, or Official Payments). Don't use any third-party sites that aren't listed on the IRS website. - Keep your browser open and take screenshots of each confirmation page immediately. I learned this after my first payment confirmation email got delayed by several hours. - The Direct Pay system is really user-friendly and will show you your updated balance after the credit card payments post, which took about 36 hours in my case. One thing I wish I'd known ahead of time - if you have a business checking account, you can also use that for Direct Pay as an additional option if needed. Might be helpful if you hit any daily limits on your personal account. The whole process was much smoother than I expected, and getting those credit card rewards definitely made the convenience fees worth it!

I had this exact same confusion when I first saw the DD code on my W2! It's one of those things that seems like it should be important for your taxes but actually isn't. I spent way too much time trying to figure out if I could somehow use that amount for tax planning. One thing that helped me understand it better was realizing that this reporting requirement was added relatively recently (around 2012) as part of the Affordable Care Act. The government wanted better visibility into healthcare costs, so now employers have to show the total value of the health benefits they provide. It's actually pretty interesting to see the full cost breakdown - I had no idea my employer was contributing so much toward my health insurance premiums. Makes you appreciate that benefit a lot more when you see the real numbers!

This is such a common source of confusion! I work in HR and we get questions about Box 12a DD all the time during tax season. Just to reinforce what others have said - this is purely informational and represents the total cost of your employer-sponsored health coverage for the year. One thing that might help put this in perspective: this amount often surprises people because it shows what health insurance actually costs when you see both portions combined. For example, if you pay $200/month through payroll deductions and your employer pays $800/month, you'd see $12,000 in Box 12a DD ($1,000 x 12 months). The key thing to remember is that you can't do anything actionable with this number for tax purposes - it's not deductible, it's not taxable income, and it doesn't affect your retirement contribution limits. It's just the government's way of tracking healthcare spending across the economy. Hope this helps clarify things!

Just want to point out that depending on the type of business entity, there might be restrictions on which accounting method is allowed. C-corps with over $27 million in gross receipts generally must use accrual. Also, certain types of businesses like those with inventory often have specific requirements.

This is definitely a tricky situation, but you're right to be concerned about fixing it properly. From my experience, the key question is whether the difference between what you reported (using accrual numbers) versus what cash basis would have shown is material. If we're talking about significant differences in taxable income, then amending is really your safest bet. The IRS takes accounting method consistency seriously, and having a mismatch between your declared method and actual reporting can cause issues down the road, especially if audited. One thing to consider is the timing - if you're still within the statute of limitations for amendment, it's better to proactively fix this rather than hope it doesn't come up later. I'd recommend calculating what the cash basis numbers would have been and comparing the tax impact. If it's material, bite the bullet and amend. If it's relatively minor, you might have more flexibility, but document your reasoning either way. Have you looked into whether your client meets any of the requirements that would actually require them to use accrual method? Sometimes what seems like a mistake might actually point to a method change that was needed anyway.

Let me add a wrinkle most people don't know - if you distributed any business assets to yourself during the dissolution (like computers, furniture, etc.), that needs to be reported as a liquidating distribution on your final 1120-S. The corporation is treated as having sold these assets to you at fair market value. I completely messed this up when closing my S-corp and ended up having to amend returns. Cost me an extra $400 in accounting fees!

I went through this exact same situation with my S-corp dissolution last year and want to emphasize something that might save you some headaches - make sure you also cancel your EIN with the IRS after everything is filed and processed. Even after filing all the final returns (1120-S, Form 966, etc.) and getting state dissolution completed, I kept getting IRS notices asking about missing tax returns for subsequent years because the EIN was still active in their system. You have to specifically write to the IRS requesting EIN cancellation and include copies of your dissolution documents. Also, if you had any business bank accounts, credit cards, or merchant services tied to your EIN, close those ASAP. Some banks will report 1099s to closed business EINs which can trigger more IRS correspondence down the road. The penalty situation sucks, but as others mentioned, first-time penalty abatement is usually granted if you've been compliant in the past. Get everything filed immediately to stop the bleeding, then deal with penalty relief afterward.

Has anyone used TurboTax to file with a Section 475(f) election in place? I made the election last year but I'm not sure if the software handles it correctly.

I went through this exact same confusion last year! You're right that the IRS publications are incredibly unclear about this. To answer your questions directly: 1) Yes, your original Section 475(f) election from last year is still valid for 2024 and all future years until you formally revoke it. You don't need to resubmit anything. 2) For your 2023 tax return (filing in 2024), you'll report all your trading activity on Schedule C as ordinary income/loss, not Schedule D. The MTM election treats you as marking all positions to market on December 31st. One important thing to double-check: make sure you're keeping good records of your December 31st position values, since you'll need to report the difference between your actual realized gains/losses and what the positions were worth at year-end. This can get tricky if you held positions overnight on December 31st. Also, don't forget that as a trader with the MTM election, you can deduct business expenses (home office, equipment, education, etc.) that regular investors can't deduct. But you'll also potentially owe self-employment tax on your net trading income. The election staying in effect automatically is actually one of the few trader-friendly aspects of the tax code!