Has anyone looked into whether the premium reimbursement needs to be included on your W-2? I'm in a similar situation but my accountant is including the reimbursed amounts in Box 1 of my W-2 even though I'm not an owner.

I'm dealing with a very similar situation right now! My family's S-Corp just went through this exact issue with our accountant. What we discovered is that many accountants get confused about the ownership attribution rules and mistakenly apply the 2%+ shareholder restrictions to ALL family members, even when they have zero ownership. The key distinction is actual ownership vs. family relationship. Just because you're related to the owner doesn't automatically make you subject to the shareholder rules. Since you explicitly stated you have no ownership stake and receive a regular W-2, your health insurance premiums should be treated exactly like any other non-owner employee's. I'd suggest asking your accountant to show you the specific IRS code section they're relying on for their position. The attribution rules in IRC Section 318 only apply when determining if someone is a more-than-2% shareholder - they don't automatically disqualify family member employees from standard employee benefits if those family members don't actually own stock. Your situation sounds straightforward - you should be able to maintain the same health insurance deduction treatment you had as a C-Corp employee.

Important thing to know - if you're expecting refunds, you only have 3 years from the original filing deadline to claim them. So for example, 2020 refunds can still be claimed until April 2024, but anything before that is gone forever if you were owed money. BUT if you owe the IRS money, there's no time limit on when they can come after you. So definitely better to address this proactively like you're doing now!

I went through something very similar about 3 years ago - hadn't filed for 6 years due to a combination of job changes, a messy divorce, and just pure avoidance anxiety. The longer I waited, the more terrifying it seemed. Here's what worked for me: Start by getting your Account Transcript from the IRS online (irs.gov). This will show you if they've already filed substitute returns for you (which they sometimes do if you have W-2 income). If they have, you'll see exactly what they think you owe. Don't try to tackle all years at once - it's overwhelming. I started with the most recent year and worked backwards. Focus on getting accurate numbers rather than rushing through everything. One thing that really helped my anxiety was realizing that the IRS actually wants to work with you once you make contact. They have payment plans, penalty abatement options, and they're generally reasonable if you're making a good faith effort to comply. The relief of finally addressing it is incredible. Yes, there will be some penalties and interest, but it's probably not as catastrophic as your anxiety is telling you it will be. You've got this!

This is such a relatable situation! I went through something similar last year with my Pokemon card collection sales. One thing that really helped me was creating a simple spreadsheet to track everything - original purchase price (or best estimate), sale price, eBay fees, shipping costs I paid, etc. For the items without receipts, I used a combination of searching completed eBay listings from around the time I originally bought them, plus checking price guides from that era. The IRS generally accepts reasonable good faith estimates as long as you can show how you arrived at them. Also don't forget to deduct eBay's final value fees and PayPal fees from your gains - those really add up and reduce your taxable income. Keep screenshots of your eBay seller hub showing all the fees you paid throughout the year. The most important thing is to be consistent in how you categorize everything. Since you mention these are personal collectibles you're clearing out (not buying specifically to resell), Schedule D is likely the right place for most of these transactions.

I'm dealing with a very similar situation and wanted to share what I learned from my tax preparer. One key point that hasn't been mentioned yet is the importance of the "personal use" test. If you bought collectibles for your own enjoyment and later decided to sell them (even if they appreciated), they're still personal capital assets, not business inventory. However, there's a crucial distinction for items sold at a loss: personal capital losses can only offset capital gains, not ordinary income. So if you have $2000 in gains from some items and $1500 in losses from others, you can offset to show $500 in net capital gains. But if you only have losses and no gains, those losses generally can't reduce your regular income. For documentation, I found that creating a narrative for each significant item really helped. For example: "Pokemon Base Set Charizard - purchased at Toys R Us in 1999 for personal collection, approximate retail price $4, sold on eBay 2024 for $180." This shows clear personal use intent rather than business activity. Also, don't panic about the 1099-K amount looking scary - remember it's just gross sales, not profit. The IRS knows you'll be reporting your actual taxable gain/loss after deducting your basis and expenses.

This is such great advice from everyone! I'm actually in a similar boat with my partner and we ended up going the separate accounts route after doing a lot of research. One thing that's worked really well for us is using a shared spreadsheet where we both track our individual investment performance and holdings. We can still discuss strategies, share research, and even coordinate our asset allocation across both accounts (like if I'm heavy in tech stocks, he might balance that with more utilities in his account). It gives us that transparency and collaboration we wanted without any of the tax headaches or breakup complications people have mentioned. Plus we can still celebrate wins and losses together - it just makes the paperwork way cleaner come tax time. Sometimes the simplest solution really is the best one!

This has been such a valuable thread! As someone who works in financial planning, I see couples struggle with these decisions all the time. The separate accounts with shared transparency approach that several people have mentioned is really the sweet spot for unmarried couples. One additional thought - if you do decide to go the joint account route despite the complications, make sure to draft a simple investment partnership agreement. It should outline contribution percentages, how decisions get made, what happens if someone wants out, and how you'll handle the tax reporting. Most brokerages won't require this, but having it documented can save you major headaches later. That said, after reading all these experiences, I'd probably lean toward the separate accounts approach too. You can always revisit the joint account idea after marriage when the tax treatment becomes much simpler!

I went through this exact situation last year with a late S corp election due to a family medical emergency. The IRS did accept my reasonable cause and waived both the late election penalties AND the associated 1120S filing penalties, so there's definitely hope for your situation. A few things that helped my case: - I included specific dates and documentation showing when the medical issues occurred and how they prevented me from handling business matters - I demonstrated that I filed as soon as reasonably possible after the situation stabilized - I attached a letter from the medical provider confirming the severity and timeline of the health crisis The whole process took about 4 months from submission to approval, which was nerve-wracking but worth the wait. One surprise cost I hadn't budgeted for was having to amend some previous tax returns to reflect the S corp status retroactively, so factor that into your planning. The medical emergency angle is definitely one of the stronger reasonable cause arguments the IRS recognizes, especially if you can show it genuinely prevented you from handling business affairs during the critical filing period. Good luck!

I'm going through a similar situation right now and this thread has been incredibly helpful! One thing I wanted to add based on my research - make sure you include Form 1120S for each tax year that would be affected by your S corp election in your submission packet. The IRS wants to see that you're prepared to fulfill all the filing obligations that come with S corp status, not just requesting the election. I learned this the hard way when my initial submission was delayed because they requested the actual returns along with the reasonable cause letter. Also, if your health issues prevented you from accessing your business records or communicating with professional advisors, mention that specifically in your explanation. The IRS seems to give more weight to reasonable cause arguments that show the circumstances genuinely prevented you from meeting your tax obligations, not just made it inconvenient. Has anyone had experience with including a personal statement from family members who witnessed the health crisis? I'm wondering if that would strengthen my case or if it's overkill.