Just wanted to share my experience - I was in almost identical situation last year. $198k net revenue, single-member LLC, found out about S corps in October. I filed Form 2553 under Rev. Proc. 2013-30 with my tax return for last year. My strategy was setting up payroll for Nov and Dec only, took reasonable salary for those months ($15k total), and documented why this was appropriate given the timing of my election. My S election was accepted without issues. Saved about $4k in taxes even with just 2 months of S-corp status, and now I'm fully set up for this year too. The key was solid documentation explaining the timing of my reasonable compensation decisions.

I went through this exact situation two years ago and decided to wait until the following tax year - best decision I made! Here's why: The administrative nightmare of retroactive S-corp compliance isn't just about filing Form 2553. You'd need to: - Set up payroll software and processes - Calculate and pay employment taxes for the entire year - File quarterly 941 forms (which were due months ago) - Potentially face penalties for late payroll tax deposits - Amend your quarterly estimated tax payments With $230k in net revenue, you're probably looking at around $6-8k in SE tax savings, but the compliance costs, penalties, and rushed setup could easily eat half of that. I used the extra time to properly research payroll providers, set up business banking for payroll, and plan my reasonable compensation strategy. When I elected S-corp status for the following year, everything was clean and proper from day one. The peace of mind was worth more than the one-year delay in tax savings. Plus, having a full year of S-corp planning let me optimize other aspects of my business structure that I would have missed if I'd rushed into it.

I went through this exact same situation last year when I proposed! The good news is that everyone here is giving you solid advice - your fiancée won't owe any taxes on the ring, and you probably won't either unless you're already close to that $13+ million lifetime exemption (which most of us definitely aren't!). Just wanted to add one practical tip: when you do file Form 709 to report the gift over $18,000, make sure you get a proper appraisal of the ring's fair market value rather than just using what you paid for it. Sometimes the actual value can be different from the purchase price, especially if you got a good deal or bought from a high-markup retailer. The IRS wants the fair market value, not necessarily your receipt amount. Also, don't stress too much about the paperwork - Form 709 is actually pretty straightforward for a simple gift like this. You've got until April 15th of the year after you give the gift to file it. Good luck with the proposal!

Great question about the appraisal timing! You don't need to get it done immediately when you purchase the ring - you have until you file Form 709 (by April 15th of the year after the gift) to obtain the appraisal. However, I'd recommend getting it done relatively soon after purchase while the market conditions are still similar. For IRS purposes, you'll want a certified appraisal from a qualified appraiser rather than just something from the jewelry store. Look for appraisers who are certified by organizations like the American Society of Appraisers (ASA) or the American Appraisal Society. The jewelry store appraisal might work for insurance purposes, but for tax reporting you want someone independent who specializes in valuations. One tip: when you get the appraisal, make sure they know it's for gift tax purposes specifically, as this can affect how they approach the valuation methodology. The fair market value should reflect what a willing buyer would pay a willing seller in the current market.

Just to add a practical point about IRC 351 vs 368 - don't forget about liabilities! If you're transferring business liabilities along with the assets, this can affect whether you recognize gain even in a supposedly "tax-free" exchange. Under IRC 351, if the liabilities transferred exceed your basis in the assets, you could recognize gain. For IRC 368 reorganizations, the rules vary by reorganization type, but generally, liabilities assumed by the acquiring corporation don't trigger immediate gain recognition (with some exceptions). Also, if you own 82% of your corporation, consider how much control you want post-transaction. Some IRC 368 reorganizations might allow you to have a continuing equity interest/role in the combined business, while others are better for clean breaks.

My accountant told me another important difference - IRC 351 is usually for ongoing businesses where you're contributing property and continuing operations, while IRC 368 reorganizations typically involve a significant change in the business structure, ownership, or operations. Also, don't forget about state tax implications! I almost got killed on state taxes after my federal-tax-free reorganization because my state didn't fully conform to the federal treatment. Make sure you check how your state handles these transactions.

I'm in almost the exact same boat as you! Filed on February 5th through TurboTax, got accepted the next day, and I'm also claiming child tax credit for my son. Been stuck on "processing" for about 2.5 weeks now and starting to get anxious too since I need the money for some home repairs. Reading through these responses is actually making me feel a lot better - sounds like the child tax credit does add some processing time, and 3 weeks isn't unusual at all. The fact that Jackie got hers in 23 days with both EIC and child tax credit gives me hope that mine should be coming soon. I think I just need to be patient for another week or so before I start worrying that something's actually wrong. Thanks for asking this question - it's reassuring to know I'm not the only one feeling antsy about the timing!

I filed on February 7th through FreeTaxUSA and I'm in the exact same situation - claiming child tax credit for my two kids and stuck on "processing" for almost 3 weeks now. After reading all these responses, I'm feeling much more relieved! It sounds like returns with child tax credits are just taking the full 21+ days this year, which is totally normal. What's really helping my anxiety is seeing the specific timelines people are sharing - Jackie's 23 days with both EIC and child tax credit is super reassuring. I think the key takeaway is that "processing" status is completely normal and doesn't mean anything is wrong with our returns. The IRS is just working through their queue and credit-related returns seem to be taking the longer end of the normal timeframe. Thanks for starting this thread - it's so much better getting real experiences from actual people rather than just the generic "21 days" from the IRS website!

Has anyone noticed that the information is sometimes slightly different between copies? I swear my state copy had a different withholding amount than my federal copy last year.

This is such a common confusion! I went through the exact same thing my first few years doing taxes. What helped me understand it was thinking of it like carbon copies from the old days - they're all identical information, just labeled for different destinations. Copy B goes with your federal return (if filing paper), Copy 2 goes with state returns (if filing paper), and Copy C is yours to keep. Since you're using tax software, you can literally use any copy to enter the data - I usually just grab whichever one is on top. The software handles all the electronic filing, so those specific copy designations don't matter for e-filing. Just make sure you hang onto at least one copy (Copy C is perfect for this) for your records. Don't feel dumb about not realizing this - the tax system could definitely be clearer about these things!