@Alfredo, based on your situation with $380K in S-Corp income, you'll definitely want to get this right! The K-1 will be issued to the QSST with the trust's EIN, but your son will report all the income on his personal return and pay the taxes. One thing I don't see mentioned yet - with that income level, your son may need to pay estimated taxes quarterly since there's no withholding from S-Corp distributions. The trust will still file Form 1041 but it's essentially just an informational return showing the pass-through to your son. Also, make sure your QSST election was filed properly with the IRS within the required timeframe (usually 2 months and 15 days after the stock transfer). If you missed that deadline, you could lose S-Corp status entirely. Your accountant should have handled this, but it's worth double-checking since the consequences are severe.

This is exactly the type of situation where getting professional guidance upfront can save you thousands in penalties and corrections later. With $380K in S-Corp income, the tax implications are significant. A few additional considerations for your QSST setup: 1. **Timing of the QSST election**: Make sure this was filed within 2 months and 15 days of the stock transfer. Missing this deadline can terminate your S-Corp election entirely. 2. **State tax implications**: Some states don't recognize QSSTs the same way the federal government does, so you may need separate state filings or elections. 3. **Future planning**: Consider whether your son will have other income sources that might push him into higher tax brackets when combined with the S-Corp pass-through income. 4. **Documentation**: Keep detailed records of all distributions vs. income allocations, as the IRS scrutinizes QSST arrangements more closely than regular S-Corp ownership. Given the complexity and the income level involved, I'd strongly recommend having your accountant walk you through the entire process again and provide written documentation of the reporting requirements. The interaction between S-Corp taxation and QSST rules has several nuances that can create compliance issues if not handled properly.

This is a really common concern, and you're smart to be thinking about it proactively! The short answer is that true reimbursements for expenses you paid on behalf of the LLC generally aren't taxable income to you. Since you're getting paid back exactly what you spent (no markup or profit), keeping detailed records with receipts, and the payments are made within a reasonable timeframe, this fits the definition of an accountable plan arrangement. The LLC is essentially just returning your own money that you fronted for their business purposes. However, there are a couple of things to watch out for: 1. **Payment app reporting**: With the $600 reporting threshold for payment apps, you might receive a 1099-K from PayPal even though these transactions aren't taxable income. If this happens, don't panic - it's just a reporting requirement, not a determination of taxability. 2. **LLC's handling**: Make sure the LLC isn't issuing you a 1099 that includes these reimbursements. They shouldn't, since these aren't payments for services rendered. Your documentation sounds excellent - that spreadsheet tracking system and receipt collection will be crucial if there are ever any questions. The $38k total might seem high, but as long as you can match each reimbursement to a legitimate business expense with proper documentation, you should be fine. Keep doing what you're doing with the record-keeping, and consider having a brief conversation with the LLC about their reimbursement policies to make sure you're both on the same page!

Another thing to consider - if you're fronting $38k annually for this LLC, you might want to ask them about setting up a corporate credit card or purchase account in your name instead. Many banks offer business credit cards where you could be an authorized user, which would eliminate the reimbursement issue entirely since the LLC would be directly responsible for the charges. This approach has several benefits: no more tracking reimbursements, no potential 1099-K issues from payment apps, and the LLC gets direct records of business expenses without the complexity of managing reimbursements. Plus, you wouldn't have to tie up your personal funds waiting for repayment. Just a thought - it might simplify things significantly for both you and the LLC's bookkeeping! Worth bringing up in that conversation about reimbursement policies that others mentioned.

Don't forget to get the property formally appraised before transferring! This establishes the fair market value at time of transfer, which is crucial for gift tax purposes. If the house really is in bad shape, an appraisal will document the lower value and could save you thousands in potential gift tax implications.

Another important consideration - make sure you understand the cousin's tax situation too! When he receives the property through the quit claim deed, he'll inherit your "carried-over basis" rather than getting a stepped-up basis. This means if he ever sells the property later, he could face capital gains tax based on the original value when your wife inherited it. This might actually work in everyone's favor though - if the property has deteriorated significantly, his basis for future sales will be higher than the current fair market value, potentially giving him a tax loss if he sells later. Just something to keep in mind for family harmony - you don't want him to get surprised by unexpected tax implications down the road. Also, since you mentioned you've been paying property taxes and maintenance costs, make sure you're not entitled to any deductions for those expenses before you transfer the property. If it was being used as a rental property (even rent-free), there might be some deductions available.

This happened to my sister and me both last year - it's apparently super common during tax season! The good news is yes, the IRS will automatically mail you a paper check, but the bad news is they don't tell you when this happens or give you a timeline. From what I've experienced and heard from others, it usually takes 4-6 weeks from when the bank rejects it. The most frustrating part is that you're just sitting there wondering if your refund disappeared into the void! If you want peace of mind, you can try calling the IRS (good luck getting through) or check your tax transcript online for those rejection codes people mentioned. For next year, definitely either add your spouse to the account or just request a paper check from the start - lesson learned the hard way! Hang in there, your money is coming! 💸

I just went through this nightmare scenario myself! Filed our joint return in February and my bank (Bank of America) rejected the direct deposit because my husband's name wasn't on my savings account. The worst part is that nobody tells you this is happening - the IRS website still showed "refund approved" status while I'm sitting here wondering where my money went! After calling around for days, I finally got through to an IRS agent who explained that when banks reject joint refunds, they automatically convert them to paper checks but there's zero notification. She told me to expect 4-5 weeks from the rejection date for the check to arrive. It's been 3 weeks now and I'm checking the mailbox daily like it's Christmas morning 📬 Pro tip: Call your bank first to confirm the rejection date - they can tell you exactly when it happened, which helps you calculate the timeline. The IRS agent also mentioned that this happens to thousands of people every tax season, so at least we're not alone in this mess! Next year I'm either adding my spouse to the account or just going straight to paper check filing. Live and learn, right? Your refund is definitely coming, just gotta be patient! 🤞

I went through something very similar with about $18k in back taxes from 2021-2022. The medical hardship angle that others mentioned is definitely worth pursuing - I got about $3,200 in penalties waived by documenting how my health issues prevented me from maintaining consistent income. A few practical tips from my experience: First, don't wait for the IRS letters to escalate further. Once they start mentioning liens or levies, your options become more limited and stressful. Second, when you do set up that installment agreement, ask about making slightly higher payments if you can manage it - even an extra $50/month will save you hundreds in interest over time. Also, keep detailed records of every interaction with the IRS. Get confirmation numbers for any agreements and save copies of all correspondence. I learned this the hard way when there was confusion about my payment plan terms six months later. The good news is once you have an active payment plan in place, the collection pressure stops completely. You'll still get monthly statements, but no more threatening letters or calls. It's honestly such a relief to have a clear path forward instead of just dreading opening the mail.

I'm dealing with a similar situation right now - about $11k in back taxes from 2022-2023 due to inconsistent freelance income and health issues. Reading through everyone's responses has been incredibly helpful, especially learning about penalty abatement for medical hardship which I had no idea existed. One thing I wanted to add from my research - if you're still freelancing or have irregular income, make sure to factor that into your payment plan calculations. The IRS allows you to request modifications to installment agreements if your financial situation changes significantly. This was a relief for me to learn since my income can vary quite a bit month to month. Also, I've been putting off dealing with this for months because the whole process seemed overwhelming, but seeing that multiple people here have successfully navigated similar amounts of debt is giving me the push I need to finally take action. Going to try some of the resources mentioned here, especially for getting through to an actual IRS agent to set up a payment plan. Thanks everyone for sharing your experiences - it's reassuring to know I'm not alone in this mess and that there are actual solutions available.