This is such a helpful thread! I'm dealing with a similar situation right now. My CPA sent me an engagement letter that basically says they're not responsible for anything - even their own calculation errors. Reading through everyone's experiences here, it sounds like I need to push back on some of the more extreme clauses. @Lucas Lindsey your suggestion about proposing specific language around negligence liability up to the fee amount seems really reasonable. And @Austin Leonard and @Anita George, it's reassuring to hear that good CPAs often do the right thing regardless of what the contract says. I think I'm going to ask my CPA for clarification on a few specific scenarios - like what happens if they make a computational error that leads to penalties, or if they miss a major deduction I'm entitled to. If they can't give me satisfactory answers, I might need to find someone else. The engagement letter should protect both parties, not just give one side a complete free pass. Thanks everyone for sharing your experiences - this has been really educational for someone new to working with tax professionals!

As someone who recently switched from TurboTax to working with a CPA, I completely understand your concerns about those engagement letter clauses. They can be pretty intimidating when you're not used to seeing that kind of legal language! One thing that helped me was asking my CPA to walk through the letter during our initial consultation. I said something like "I want to make sure I understand what we're both responsible for" and asked about specific scenarios. For example, what happens if they miss a deadline, make a calculation error, or overlook a deduction I'm entitled to? Their willingness to have that conversation openly and give concrete examples of how they handle mistakes told me a lot about their professionalism. A good CPA should be able to explain their policies clearly and shouldn't get defensive about reasonable questions. Also, don't forget that you can always get a second opinion from another CPA about whether the terms seem reasonable. Many will do a brief consultation to review an engagement letter, especially if you're considering switching to their services. Sometimes having that outside perspective can help you decide if your concerns are valid or if you're overthinking it. The fact that you're taking the time to read and understand the agreement before signing puts you way ahead of most people!

Has anyone actually gotten penalized for not paying FUTA as a solo S-corp? I've been operating for 3 years and honestly haven't been paying it because my accountant told me it wasn't necessary. Now im kinda worried...

I went through this exact situation when I started my S-Corp two years ago. You definitely need to pay FUTA tax even as the sole owner-employee - there's no exemption at the federal level like some states have for unemployment taxes. Here's what I learned: You'll file Form 940 annually and pay FUTA on the first $7,000 of your wages. Even though your state exempts you from state unemployment taxes, you should still qualify for the 5.4% credit in most cases, bringing your effective FUTA rate down to 0.6% instead of the full 6%. The key is making sure you're categorizing your state exemption correctly on Form 940. I'd recommend double-checking with a tax professional or calling the IRS directly to confirm your specific situation, but don't skip filing - the penalties for not filing Form 940 can add up quickly.

One thing nobody mentioned - if you had ANY taxes withheld from your paychecks (which you probably did), you DEFINITELY want to file even if you're under the required threshold. Otherwise you're just giving free money to the government that should be coming back to you as a refund!

Maya, congratulations on your first job! You're asking all the right questions. Based on what you've shared, you'll very likely need to file a tax return since you'll probably exceed the $6,000 threshold for dependents by the end of the year. Here's what I'd recommend: Keep track of your total earnings from your paystubs, and when you get your W-2 in January, that will show your exact annual income and how much was withheld for taxes. Even if you somehow end up just under the filing requirement, you should still file to get back any taxes that were withheld from your paychecks. The good news is that as a dependent with straightforward W-2 income, your tax situation is pretty simple. The IRS Free File program will have several free options perfect for your situation. Start checking the IRS website (irs.gov) in late January for the free filing options - they usually open up around the end of January/early February. Don't stress about it too much - millions of people file their first tax return every year, and the process is designed to handle basic situations like yours pretty easily!

I'm currently using Justworks for my S Corp payroll and it's been solid for about 18 months now. They're around $49/month plus $8 per employee, so a bit pricier than some options mentioned here, but they include workers' comp coverage which is nice. What I really like is their dashboard makes it super easy to see exactly what's being filed and when. They handle all federal and state filings automatically, plus they have really responsive customer support when you need help. One thing to consider - if you're planning to add employees soon, look at services that offer benefits administration too. I started solo but added two part-time contractors last year, and having everything in one platform made the transition seamless. Also seconding what others said about not trying to DIY the payroll. The S Corp requirements are way more complex than regular contractor payments, and the penalties for messing up aren't worth the savings.

I've been using Gusto for my S Corp for about 3 years now and while their pricing has definitely increased, I still think they offer good value. Currently paying around $45/month plus $6 per person for the base plan that handles all the federal and state filings. What I really appreciate about Gusto is their user interface - it's incredibly intuitive and they send clear notifications before every deadline. They also have great educational resources that helped me understand S Corp payroll requirements when I was starting out. One tip for anyone just getting started: make sure whatever service you choose can handle your state's specific requirements. Some of the cheaper options don't support automatic state unemployment filings in all states, which can leave you scrambling. Also agree with others here about not going the DIY route. I made that mistake initially and the stress of worrying about compliance issues wasn't worth the cost savings. A good payroll service pays for itself just in peace of mind.

14 Has anyone noticed that FREETAXUSA sometimes hides forms in weird places? I had to file a Schedule C last year and spent like an hour hunting for it before I found it buried in a submenu.

15 I went through this exact same nightmare situation two years ago! My employer literally disappeared - office empty, phones disconnected, the works. Here's what I learned that might help your cousin: 1. **Document everything** - Keep records of all your attempts to contact the employer (emails, phone calls, etc.). The IRS may ask for proof that you tried to get the W-2. 2. **Check your Social Security account** - Go to ssa.gov and create an account. Your earnings should show up there even if you never got a W-2, which can help you get accurate wage amounts. 3. **Look at your final paystub carefully** - If she has ANY paystub from that job, it will show year-to-date totals that can help estimate the full year amounts. 4. **Bank statements are your friend** - Even without paystubs, your bank deposits from that employer can help reconstruct how much you actually received. The Form 4852 process in FREETAXUSA is actually pretty straightforward once you find it. Just be as accurate as possible with your estimates and keep all your documentation. I had no issues with my filing and the IRS never questioned it.