Has anybody used the supplemental rate calculator on the IRS website? I tried using it for my bonus but I think I'm doing something wrong because it says my withholding should only be around 35% total but my company took out almost 50%.

This is completely normal and you're not alone! The 52% withholding you're seeing is exactly what I experienced with my last bonus. The key thing to remember is that this is just withholding - it's not your actual tax rate on the bonus. Your employer is required to withhold at the supplemental wage rate, which is 22% for federal taxes, plus your state rate, plus payroll taxes (Social Security and Medicare). In high-tax states, this can easily add up to 50%+ in total withholding. The good news is that when you file your taxes, your bonus gets added to your regular income and taxed at your marginal rate. Since you make $95k, your effective tax rate on the bonus will likely be much lower than 52%. You'll probably get a decent refund when you file, especially if your regular paycheck withholding is also set up correctly. I'd recommend keeping track of your total withholding throughout the year so you can adjust your W-4 if needed to avoid a massive refund (which is basically giving the government an interest-free loan). But for now, just know that most of that extra withholding will come back to you!

I'm dealing with this exact same situation! Dissolved my S-corp about 7 months ago, filed the final 1120-S properly, but completely forgot about Form 966 until I was going through old files this week. Reading through everyone's experiences here has been such a relief - it's incredible how many people went through the same thing with consistently positive outcomes. The pattern is really clear: as long as you've handled the substantive tax requirements (final 1120-S, proper distributions, taxes paid), the IRS treats late Form 966 as a minor paperwork oversight rather than a serious compliance violation. What gives me the most confidence is seeing multiple people who were 8-12 months late and experienced zero penalties. It really seems like the IRS focuses their enforcement efforts on actual tax avoidance rather than late informational returns from small businesses that clearly made good faith efforts to comply. I'm going to follow the same approach that worked for everyone else - file the Form 966 this week with a simple explanation letter acknowledging the oversight and confirming all final obligations were met. I'll also double-check that asset values match between the 966 and my final 1120-S like others recommended. Thanks to everyone who shared their real experiences instead of just generic warnings - this thread has been incredibly helpful for reducing the stress around what turned out to be a much more common and manageable situation than I initially thought!

I'm in a nearly identical situation - dissolved my S-corp about 6 months ago and just discovered I never filed Form 966! This thread has been absolutely invaluable. Reading through everyone's experiences, the pattern is crystal clear: the IRS doesn't penalize small S-corps for late Form 966 filings when you've properly handled the substantive requirements. Like many of you, I filed my final 1120-S correctly and distributed all assets properly. What's really reassuring is seeing so many people who were 6-12 months late with zero penalties or issues. It definitely seems like the IRS recognizes the distinction between actual tax compliance (which we've all handled) and paperwork formalities. I'm going to follow the proven approach everyone's shared - file the Form 966 this week with a brief explanation letter acknowledging the oversight and confirming all final obligations were met. I'll also carefully verify that asset values and dates match exactly between the 966 and my final 1120-S to avoid any discrepancies. Thanks to everyone who shared their real-world outcomes instead of just theoretical warnings. This thread has transformed what felt like a major problem into a manageable administrative task. Sometimes we really do overthink these situations when the IRS clearly has bigger priorities than chasing down late informational returns from compliant small businesses!

I'm going through the exact same waiting game right now! My DDD is also tomorrow and I've been refreshing my Navy Federal app like it's going to magically update. Reading everyone's experiences here is super reassuring though - it sounds like Navy Federal is incredibly consistent with that midnight processing. I had no idea they don't show pending status for tax refunds, which explains why I haven't seen anything yet! This is actually my first year using Navy Federal for my refund and I was starting to worry something was wrong. Based on what everyone's sharing, it looks like we just need to be patient until after midnight Eastern time. The anxiety of waiting for your own money is so real! Thanks to everyone who shared their experiences - this community is a lifesaver for nervous first-timers like me! 🤞

I've been with Navy Federal for my tax refunds for the past 5 years and can confirm what everyone else is saying - they're incredibly consistent with the midnight processing! I used to be just like you, checking obsessively the day before my DDD, but I've learned that Navy Federal handles tax refunds like a well-oiled machine. They don't show pending status for IRS deposits, but your money will absolutely be there at 12:01 AM Eastern time on your DDD. Since your DDD is 3/13, that means your refund should hit tonight after midnight (or 9 PM if you're on the west coast). I actually love this about Navy Federal - no games, no delays, just reliable service. Set an alarm for 12:05 AM and check once instead of driving yourself crazy all day. Your refund train is right on schedule! 🚂💰

I'm really sorry you're dealing with this situation - it's incredibly frustrating when you're the victim of theft and still have to navigate all these tax complications. Based on what others have shared here, it sounds like you'll need to take a multi-step approach: report the HSA distribution on Form 8889, file Form 4684 for the theft loss, and include detailed documentation with your return. The key thing seems to be having that police report and court documentation to prove it was actually theft. One thing I'd suggest is keeping meticulous records of all your legal expenses related to recovering this money too - some of those might be deductible as well. And definitely include a clear statement with your return explaining the situation so the IRS understands why you're claiming the theft loss. It's awful that the HSA company isn't being more helpful, but unfortunately that seems pretty common in domestic situations. At least you're taking all the right steps legally. Hang in there - hopefully the court proceedings will resolve in your favor soon.

This is such a complex situation, and I feel for you dealing with theft during what's already a stressful time with legal proceedings. One additional point that might help - if you end up having to pay any taxes this year despite the theft deduction limitations, you may want to consider filing Form 911 (Request for Taxpayer Advocate Service Assistance) with the IRS. The Taxpayer Advocate Service sometimes helps in cases where taxpayers are facing financial hardship due to circumstances beyond their control, like theft. Also, make sure when you file Form 4684 that you use the fair market value of what was stolen (the $2,700) and not try to calculate any depreciation - stolen cash/funds are reported at face value. And definitely keep copies of everything - the police report, court filings, HSA statements showing the unauthorized transactions, and any correspondence with the HSA provider about disputing the charges. The timing is unfortunate since you're filing before the legal case is resolved, but documenting everything properly now will make things much smoother if you need to file amended returns later based on the court outcome. Hang in there!

Another option nobody's mentioned yet - if you expect similar interest income this year, you could make an estimated tax payment for Q1 (deadline April 15) to avoid getting into the same situation for 2024. Even if you've already missed the January 15th deadline for the final 2023 estimated payment, starting fresh with the new tax year can help you avoid penalties going forward. For reference, I set calendar reminders for all four estimated tax deadlines (April 15, June 15, September 15, and January 15) and calculate roughly 25-30% of any untaxed income (interest, dividends, side gig) to pay each quarter. Never had underpayment issues since starting this system.

I went through almost this exact situation two years ago! The anxiety is completely understandable, but you have several good options here. Since you mentioned your 2022 AGI was around $165,000, you'd need to pay 110% of your prior year tax to qualify for the safe harbor (not 100%). But honestly, given your clean compliance history, I'd skip the complicated Form 2210 calculations entirely and go straight for the First Time Penalty Abatement that others mentioned. Here's what worked for me: File your return and pay the $3,400 as soon as possible. Then wait about 2-3 weeks for the payment to process in their system. Call the IRS and specifically ask for "First Time Penalty Abatement for underpayment penalty." Have your prior year returns handy to confirm you've been compliant. Most agents can approve this immediately if you qualify. The key phrase is "this is my first time owing a significant underpayment penalty and I've always filed and paid on time in previous years." They usually waive the entire penalty without requiring detailed Form 2210 calculations. For future years with high interest income, consider making a small estimated payment in Q4 (January 15 deadline) to cover the interest you've earned. Much simpler than trying to predict quarterly amounts throughout the year. You'll get through this! The IRS penalty abatement programs exist exactly for situations like yours where life circumstances change unexpectedly.