As a tax professional, I want to emphasize something important that hasn't been fully addressed - the timing of when your boss can make the S-corp election for it to be effective this year. If he wants the S-corp status to apply to the entire 2025 tax year, he needs to file Form 2553 by March 15, 2025 (2 months and 15 days after the beginning of the tax year). If he files after that deadline, the election won't be effective until January 1, 2026. This is crucial because if he's already been taking "salary" payments in 2025 but the S-corp election isn't effective until 2026, ALL of those payments for 2025 will need to be treated as owner draws for tax purposes, regardless of how they were processed through payroll. Also, once he makes the S-corp election, he'll need to obtain an EIN if the PLLC doesn't already have one, set up proper payroll withholding, and start making quarterly payroll tax deposits. The "reasonable salary" requirement is real - the IRS has been cracking down on S-corp owners who try to minimize their salary to avoid payroll taxes. Given the complexity and potential penalties for getting this wrong, I'd strongly recommend having a qualified tax professional handle the transition, especially since he's already taken payments this year that need to be properly classified.

I've been following this discussion and want to add a practical perspective as someone who handles payroll for several small businesses. One thing that often gets overlooked is the quarterly payroll tax filing requirements once you make the S-corp election. As an S-corp, your boss will need to file Form 941 quarterly and make federal tax deposits (often monthly or semi-weekly depending on the payroll amount). This is in addition to state payroll tax requirements. Miss these deadlines and you're looking at penalties that can quickly eat into those self-employment tax savings everyone's talking about. Also, regarding the "reasonable salary" discussion - I've seen the IRS audit several S-corp owners in our area, and they seem to focus on businesses where the salary is less than 40-50% of the business profit. While there's no hard rule, that seems to be a red flag threshold. For a law practice with $150k profit, paying a $40-50k salary and taking the rest as distributions would probably be defensible, but paying $25k and taking $125k in distributions would likely attract unwanted attention. The paperwork burden is real - beyond just the tax return complexity, you're now dealing with W-2s, payroll tax returns, and proper documentation requirements. Make sure your boss factors in the time cost of all this additional compliance work when calculating whether the tax savings are worth it.

Had to do this last year after getting flagged for identity verification. Bring everything others mentioned but also consider bringing your W-2s or 1099s if you have them - they didn't ask for mine but the person next to me needed theirs. The staff was actually really helpful and walked me through what they needed. One tip: park at a nearby garage if you're in a city location because IRS building parking fills up fast, especially on Mondays and Fridays. Whole process took about 40 minutes and my refund showed up 6 business days later!

Just went through this process a couple weeks ago! In addition to what everyone mentioned, I'd recommend bringing a printed copy of your online account transcript if you have access to it - the IRS agent said it helped speed things up since they could see my filing history right there. Also, dress business casual if possible - I know it sounds silly but the security and staff seemed to take me more seriously vs the person before me in flip flops and a tank top. My appointment was at 10am and I was out by 10:35, refund hit my account exactly 8 days later. The whole thing was way less stressful than I built it up to be in my head!

don't forget about the safe harbor rules that can help you avoid penalties: 1. If you pay 100% of last year's tax liability (or 110% if your AGI was over $150k), you're safe from penalties regardless of your current year income 2. If you pay 90% of current year tax liability in equal installments, you're good 3. If you owe less than $1,000 after subtracting withholdings and credits, no penalty these saved me when my income jumped from like $90k to $250k last year lol

Another thing to consider with your seven-figure income is that you might want to work with a tax professional who specializes in high-income situations. The underpayment penalty calculations can get complex, especially when you're dealing with alternative minimum tax (AMT), which often kicks in at higher income levels. The AMT can significantly change your required quarterly payment amounts, and the standard safe harbor calculations might not account for this properly. A good tax pro can help you model different scenarios and potentially use strategies like the annualized income method even if it seems complicated - it might save you thousands in penalties. Also, since you mentioned substantial income, make sure you're considering estimated payments for any state taxes too. Some states have their own underpayment penalty rules that don't necessarily align with federal requirements.

I'm at week 2 with my amended return to add my son's SSN for the child tax credit - filed through H&R Block after we finally received his social security card following some delays with getting his birth certificate processed first. Just starting this journey but already feeling anxious about the wait ahead! This entire thread has been incredibly eye-opening and honestly such a relief to find! I was naively thinking the IRS's 16-week estimate was realistic, but clearly from everyone's experiences here, 20-30 weeks is much more accurate. It's helpful to know what I'm really in for so I can stop obsessively checking that tracker expecting quick updates. What's most reassuring is hearing from so many people that adding a dependent's SSN is routine and considered low-risk for audit. As someone completely new to tax amendments, I was worried this might automatically trigger problems or extra scrutiny, but it sounds like this type of correction is very standard and straightforward. I'm going to dig through my H&R Block paperwork to find those processing center codes everyone mentioned - really hoping mine doesn't end up at Austin or Kansas City based on what I'm reading about their backlogs! It's also good to know about resources like the Taxpayer Advocate Service and some of the other tools people have mentioned if I need them down the road. Thanks to everyone for sharing their timelines and experiences. Even though I'm just starting this process, it's oddly comforting to know there are so many of us going through the exact same situation with very similar circumstances. The waiting game begins!

I'm at week 14 with my amended return to add my daughter's SSN for the child tax credit - filed through TaxSlayer after we finally received her social security card following a move where the paperwork got delayed. Like everyone else here, I've been stuck on that "Processing" status with absolutely no updates. This thread has been such a godsend! I was starting to panic thinking I'd done something wrong since there's been zero movement for months, but seeing so many people in nearly identical situations is incredibly reassuring. Learning that 20-30 weeks is the realistic expectation rather than the misleading 16 weeks the IRS advertises really helps me mentally prepare for the wait ahead. What's been most comforting is hearing from multiple people that adding a dependent's SSN is routine and low-risk for audit. As someone who's never filed an amendment before, I was getting anxious that this might trigger extra scrutiny, but it sounds like this type of correction is very common and straightforward. I'm definitely going to check my TaxSlayer confirmation for those processing center codes everyone mentioned to see where mine ended up - really hoping it didn't get sent to one of the severely backed-up centers like Austin or Kansas City! Since I'm getting closer to that 20-week mark, it's good to know about the contact options and resources like the Taxpayer Advocate Service if needed. Thanks to everyone for sharing their experiences and timelines. It's oddly reassuring to know we're all going through this same frustrating waiting game together with such similar situations. The waiting continues!

Can someone explain in simple terms why we have to do all this backdoor Roth stuff anyway? It seems unnecessarily complicated. Why doesn't the government just let people contribute to Roth IRAs regardless of income? The annual limits are already pretty low.

I had a very similar situation last year and can confirm what others have said - you handled this correctly! The key thing that helped me understand it was realizing that the recharacterization essentially "undoes" your original Roth contribution and treats it as if you had made a nondeductible Traditional IRA contribution all along. The $450 in earnings that got moved with the recharacterization will indeed be taxable income when you convert it back to Roth in 2024. But this is actually normal - any time you convert from Traditional to Roth, you pay taxes on the growth that happened in the Traditional account. One tip: when you get your 1099-R forms, double-check that the amounts match what you expect. Sometimes brokerages make errors on these forms, especially with more complex transactions like recharacterizations. I had to get mine corrected last year because they initially showed the wrong distribution code. Also, don't forget that your 2024 backdoor Roth conversion ($7,000) is completely separate from all this 2023 recharacterization business, so make sure you're tracking both properly for your 2024 taxes.