This entire discussion has been incredibly valuable! As a CPA who works with many S-Corp clients, I see this confusion constantly. The key insight that seems to help my clients the most is understanding the "why" behind the reporting rules. Employee 401(k) deferrals appear in Box 12 with Code D because they represent a current-year tax benefit to the employee - they reduce the employee's taxable wages for the current tax year. The IRS needs to track this on the W2 so they know the employee received this tax benefit. Employer matching contributions, however, don't provide any current-year tax benefit to the employee. The employee will be taxed on these funds when they withdraw them from the 401(k) in retirement, but for the current tax year, they're simply a business expense for the S-Corp. That's why they don't appear anywhere on the W2. For S-Corp owners who are also employees: this applies to you exactly the same way. Your employer match (paid by your S-Corp) is a business deduction, but it doesn't appear on your personal W2 because it doesn't affect your current personal income taxes. The Form 5500 that others mentioned is filed by your 401(k) plan administrator and reports all contributions to the IRS at the plan level - but that's separate from individual W2 reporting.

This has been such an educational thread! I'm also running an S-Corp and was completely stumped by this same issue. I kept staring at my draft W2s thinking something was missing because I could see both my employee contributions AND the employer matches on my 401k statements, but only the employee portion showed up in Box 12 of the W2. What really helped me understand this was the explanation about current-year tax impact versus future tax impact. The employee deferrals reduce your taxable income THIS year (which is why they need to be tracked on the W2), but the employer match doesn't affect your current year taxes at all - it's just sitting there growing tax-deferred until you retire and withdraw it. For anyone else going through this confusion: your payroll company is almost certainly doing this correctly. Employer 401k matches simply do not belong anywhere on W2 forms for traditional 401k plans. They're tracked by your plan administrator and reported to the IRS through other forms, but the W2 only cares about things that affect your current year personal income taxes. Thanks to everyone who shared their experiences and expertise here - this thread should definitely be bookmarked for other S-Corp owners who inevitably run into this same question!

Thanks for bringing up this question - it's one that comes up frequently for small businesses! The consensus here is correct: you do NOT need to file a Form 1099-MISC for rent payments to a 501(c)(3) nonprofit corporation. The key principle is that the corporate exemption takes precedence. Since your vendor is incorporated as a 501(c)(3) nonprofit corporation, they fall under the general rule that payments to corporations are exempt from 1099 reporting requirements (except for legal and medical services, which doesn't apply to rent). To summarize the requirements: - Payments to corporations = No 1099 required - Your vendor is a corporation (501c3 nonprofit corporation) - Therefore, no 1099 required for your $23,400 in rent payments Just make sure you have their completed W-9 on file showing their corporate status - this serves as your documentation if the IRS ever questions why you didn't file a 1099 for this vendor.

This thread has been incredibly helpful! As someone who just started handling our company's vendor payments and 1099 reporting, I was really confused about the different rules for nonprofits vs. corporations. The clarification that corporate status takes precedence over nonprofit status makes so much sense now. I have three different 501(c)(3) organizations we work with - two are incorporated and one is just an unincorporated association. Based on what I've learned here, I'll need to issue a 1099 to the unincorporated one but not the two corporations. I'm definitely going to start requesting W-9s from all our vendors upfront like someone suggested. It seems like that's the best way to avoid confusion and have proper documentation. Thanks everyone for sharing your experiences and knowledge!

One important thing nobody mentioned: Even with an ITIN, as a non-resident alien, you should look into filing a 1040-NR (Non-Resident) tax return for any US-source income, including that property sale. Just having an ITIN doesn't fix everything - you still need to file the right forms. Also, if the money you're transferring from your home country was already taxed there, make sure you keep documentation proving the source. Large transfers get reported by banks via FinCEN, but that doesn't automatically make them taxable.

As someone who went through a similar situation as a non-resident, I'd strongly recommend getting that ITIN before you receive the $31,500 payment. The application process can take 6-11 weeks, so don't wait. A few key points from my experience: **On the $31,500 payment:** Yes, your US bank will likely report this to the IRS, especially if it's from a US source or if it triggers any reporting thresholds. Having an ITIN ensures proper tax identification when this gets reported. **On property sale timing:** Don't rush to sell before marriage just for tax purposes. The FIRPTA withholding (15% of gross sales price) applies regardless of when you sell. However, being married to a US citizen might give you more options for how you file and potentially better treatment of capital gains. **On international transfers:** There's no limit that makes transfers "income" - it depends on the source. Money you've already earned and paid taxes on in your home country isn't US taxable income just because you move it to a US account. Just keep good documentation showing the source of funds. **Practical tip:** Consider consulting with a tax professional who specializes in international taxation before making any major moves. The interplay between non-resident status, property ownership, and potential future residency can be complex. Get that ITIN application started now - you'll need it for the property sale anyway, and it's better to have it ready than to be scrambling later.

Anyone else notice that the IRS interest rate for underpayment keeps going up? I swear it was like 5% a couple years ago during covid, and now it's closer to 8%. Makes a huge difference when calculating these penalties on large underpayments.

The underpayment penalty calculation can definitely be confusing! To clarify what others have mentioned - it's not a flat 5% hit on your total underpayment. The IRS uses a quarterly system where they calculate how much you should have paid each quarter (based on either 25% of this year's liability or the safe harbor amounts), then charge interest on any shortfall from each quarterly due date until paid. For your $135k situation, the actual penalty depends on when during the year you fell short. If most of that underpayment was due to Q4 capital gains, your penalty might be much lower than if you were short all year. The current rate is around 8% annually (about 2% per quarter). One important thing to check - if your AGI last year was under $150k, you only need to pay 100% of last year's tax to avoid penalties, not 110%. That could make a big difference in whether you actually owe any penalty at all!

Can someone explain the QBI calculation in simple terms? If I made $48,000 from contract work and had $13,000 in business expenses, how much QBI deduction would I get? Still trying to wrap my head around this.

Just wanted to add another important point about QBI - make sure you understand the difference between business income and investment income. Only your actual business profits count toward QBI, not things like interest, dividends, or capital gains from investments. Also, if you're married filing jointly, your spouse's income counts toward that threshold calculation even if they don't have any business income. So if your spouse has a high W-2 salary, you might hit those income limits faster than you'd expect. It's worth running the numbers both ways to see how filing status affects your QBI deduction. One last tip: if you're close to those income thresholds, consider timing some business expenses or income to stay below the limits if possible. The difference between getting the full 20% deduction versus having it phase out can be substantial!