I want to add another important consideration that hasn't been fully discussed - the impact on beneficiary distributions after the 645 election period ends. Once you transition to filing separate trust returns, any distributions to beneficiaries will carry out different types of income than they did under the combined entity. This can affect the beneficiaries' personal tax situations, especially if the trust has accumulated significant capital gains or other investment income. Also, if you're concerned about timing and documentation, consider having your attorney prepare a formal distribution resolution that clearly states the date and terms of any final distributions. This creates a paper trail that's much stronger than just relying on bank transfer dates or cancelled checks. One more tip - if you do end up going past the deadline, make sure to file Form 1041 for the trust using a new EIN. Don't try to continue using the estate's EIN, as this will cause processing issues with the IRS and potentially delay any refunds the trust might be entitled to.

Based on all the discussion here, it sounds like you need to weigh the actual tax impact against the stress of rushing distributions. The key insight from everyone's responses is that there's no direct penalty for going past the 2-year deadline - the main consequence is having to file separate returns with higher trust tax rates. Here's what I'd recommend: calculate the approximate additional tax cost of missing the deadline by a month. If your trust doesn't generate much income, the extra cost might be minimal and worth the peace of mind of doing distributions properly rather than rushing. But if you have significant investment income or business income like some others mentioned, those compressed trust tax brackets could cost thousands. The documentation points raised by Santiago and others are crucial either way. Make sure you have clear paper trails for whenever you do complete distributions - formal resolutions, bank records, everything dated properly. One thing I didn't see mentioned - have you considered doing partial distributions now to reduce the trust's income-generating assets, then completing the rest after the deadline? This could minimize the tax impact of the higher trust rates while giving you more time to handle the final distributions properly.

Just to add another perspective - I work as a tax preparer and deal with signature issues all the time. The IRS has actually gotten much more flexible about electronic signatures since COVID, especially for individual returns (Form 1040). What matters most is that it's YOUR authentic signature, regardless of how it's created. A stylus signature on your Surface that gets printed is generally acceptable for most personal tax forms. The key is making sure the signature looks consistent with other documents you've signed. That said, if you're really worried about it, here's a middle-ground solution: sign a blank piece of paper with a pen, scan or photo it with your phone, then digitally paste that signature onto your tax forms before printing. This gives you a "wet signature" appearance while avoiding the transport issues. But honestly, for a standard 1040 return, your stylus signature should be fine. The IRS processes millions of returns and they're more concerned with tax compliance than signature methodology. Just make sure it's clearly your name and looks like an actual signature attempt, not just typed text.

As someone who's dealt with this exact situation, I'd say go with the stylus signature! I've been using my iPad to sign tax documents for the past two years without any issues. The IRS really has become much more flexible about electronic signatures, especially since so many people are doing everything digitally now. Your Surface stylus signature will be totally fine for a standard 1040 return. Just make sure it actually looks like your signature and not just scribbles. The IRS cares way more about whether you're reporting your income correctly than how you physically signed the paper. That said, definitely look into the Free File program for next year like others mentioned - no point paying TurboTax's fees if you don't have to! But for this year, sign it digitally, print it out, and mail it in. You'll save yourself the Uber money and the headache.

Has anyone used TurboTax to report these kinds of rebates? Do they have a special section for it or guidelines on how to handle it?

This thread has been really helpful! I'm in a similar situation with multiple cashback apps and was getting worried about tax implications. One thing I wanted to add - make sure you keep good records of your rebates even if they're not taxable. I learned this the hard way when I got audited a few years ago (for unrelated reasons). The IRS agent asked about some deposits in my bank account that were from rebate checks, and I had to scramble to find documentation proving they were purchase rebates and not unreported income. Now I keep a simple spreadsheet with the date, amount, which app/site it came from, and what purchase it was tied to. Takes like 2 minutes each time I get a rebate, but gives me peace of mind. Better to have the documentation and not need it than the other way around! Also wanted to thank everyone who shared those tools and services - definitely going to check them out for my more complex tax questions.

Has anyone used FreeTaxUSA for Form 3921? I'm in the same boat as OP but don't want to pay for the expensive versions of TurboTax or H&R Block.

I went through this exact same situation last year! The key thing to understand is that even though you didn't receive cash, the IRS considers the discount you got on the shares as taxable compensation. Since you mentioned the Form 3921 doesn't show the gain directly, you're right that you need to calculate it yourself - it's the difference between the fair market value per share and what you actually paid (the exercise price) multiplied by the number of shares. For tax software, I ended up using TurboTax Premier after trying a cheaper option that didn't support Form 3921. It was worth the extra cost because it automatically calculated the AMT implications and walked me through everything step by step. The software will import the information from your Form 3921 and handle all the complex calculations. One tip: make sure you understand whether these were ISOs (Incentive Stock Options) or NQSOs (Non-Qualified Stock Options) because they're taxed very differently. Form 3921 is specifically for ISOs, which means the gain might trigger Alternative Minimum Tax instead of regular income tax depending on the amount.

Everyone's talking about the tax implications but nobody mentioned the withholding! When my company got acquired, they withheld at a flat 22% which wasn't enough for my tax bracket. I got absolutely destroyed the next April with a huge tax bill plus underpayment penalties. Make sure your employer is withholding enough or set aside like 35-40% of the payout for taxes depending on your bracket. Seriously, the surprise tax bill was devastating.

This is exactly the situation I'm dreading. My acquisition is closing in about 6 weeks and I've been assuming the company would handle withholding properly. I'm definitely in a higher bracket than 22% when you add this payout to my regular salary. Did you end up having to make quarterly estimated payments to avoid penalties in future situations? I'm wondering if I should proactively send estimated payments to the IRS once I know the exact payout amount, rather than waiting until next April and getting hit with underpayment penalties on top of everything else. Also, for anyone else reading this - definitely worth running the numbers on what tax bracket you'll be in with the additional income. A $65K payout could easily push someone from the 22% bracket into 32% or even higher depending on their regular salary and filing status.