One aspect nobody's mentioned is health insurance. As a >2% S Corp shareholder, your health insurance premiums can't be paid pre-tax through the company like regular employees. Instead, the company pays them, includes them as taxable wages on your W-2, then you deduct them on your personal return. This gets complicated and can impact your overall savings calculations, especially if you're purchasing your own health insurance as a healthcare contractor. Also, retirement options change. SEP IRAs are simple as a sole proprietor, but S Corps often use Solo 401(k)s instead, which allow for potentially higher contributions but more paperwork. Consider these factors in your total cost/benefit analysis. The tax savings need to outweigh ALL the additional complexities.

Based on your $118k income and 28-hour work week, you're right at the threshold where S Corp benefits become marginal. Here's what I'd consider in your position: Your reasonable salary calculation of $53.8k (28 hours × $37/hour × 52 weeks) is defensible, but consider using annual hours instead of weekly estimates to account for time off. The IRS likes to see documentation showing how you arrived at your salary. At your income level, you'd save roughly $9,800 in SE tax on the $64k distribution portion, but after factoring in setup costs (~$2,000), ongoing expenses (~$3,000-4,000 annually), and your state's 5.5% corporate tax (~$6,500), your net savings would be minimal - maybe $0-2,000 annually. Given the administrative burden and your stable hourly income model, I'd suggest waiting until you're consistently earning $140k+ before making the switch. At that point, the math becomes more compelling and justifies the complexity. For now, focus on maximizing your SEP-IRA contributions (up to $29,500 for 2024) and other deductions available to sole proprietors. The S Corp will still be there when your income grows.

Has anyone considered the wash sale implications with this strategy? If you're buying the same stock across multiple accounts around the same time period, and then selling at a loss in some accounts while keeping others, you could accidentally trigger wash sale rules that disallow those losses.

Another angle to consider is the reporting complexity when tax season comes around. Even if the strategy were profitable, you'd be dealing with potentially 20+ 1099-B forms, each with their own cost basis calculations and transaction details. I've handled multiple brokerage accounts before (though not nearly 20), and it becomes a nightmare to reconcile everything properly. Each brokerage may handle the reverse split rounding differently in their reporting, some might show it as a stock dividend, others as a reorganization event. You'd need to be extremely meticulous with your record-keeping to ensure you're reporting everything correctly and consistently. Also worth noting that if any of these accounts have small balances, some brokerages charge inactivity fees or account maintenance fees that could easily eat into any gains from the rounding strategy. The administrative burden alone might outweigh the potential benefits.

Does anyone know if you can transfer a 529 plan from a parent to a grandparent? My situation is backwards from most - I opened 529s for my grandkids but now their parents make more money than me and could benefit from the state tax deduction more than I can.

Great question! I went through this exact decision a few years ago with my kids. Definitely keep the 529 plans in your name (or yours and your wife's) with the twins as beneficiaries - don't put them directly in the kids' names. Here's why this matters for your situation: Since you mentioned being in a higher tax bracket, you'll want to maximize any state tax deductions available. Most states that offer 529 deductions only give them to the account owner, so having the plans in your names ensures you can claim those deductions. Also, for financial aid purposes down the road, parent-owned 529s are assessed at only 5.64% when calculating expected family contribution, versus 20% if the student owns the account. That's a huge difference that could affect aid eligibility. One more benefit - keeping ownership gives you flexibility. If one twin gets a full scholarship or decides not to go to college, you can easily change the beneficiary to the other twin or even use it for graduate school later. You maintain complete control over the funds until they're withdrawn for qualified expenses. The tax advantages (tax-free growth and tax-free withdrawals for education) are the same regardless of ownership structure, so there's really no downside to the parent-owned approach.

I've been using FreeTaxUSA for the past 3 years and it's WAY better than TurboTax or H&R Block. Federal filing is completely free and state is only $15. No hidden upgrades or confusing tiers of service. Just straightforward filing.

This is exactly why we need more people to know about these alternatives! I've been using the actual IRS Free File program for years (when I can find it buried on their website), but it's ridiculous that they make it so hard to locate. The fact that TurboTax was literally hiding their free version from search engines should be criminal. We're talking about a basic government service that every citizen needs, and private companies are deliberately making it harder and more expensive just to pad their profits. What really gets me is that my tax situation isn't even complicated - just W-2 income and standard deduction - yet I was paying $60+ every year before I found the free options. Multiply that by millions of taxpayers and you can see why these companies fight so hard to keep the system broken.

Has anyone used the Section 179 deduction for an SUV recently? I thought there was a weight requirement of over 6,000 lbs for the full deduction? My CPA told me some SUVs don't qualify for the full amount.

One thing to consider that might help reduce your tax burden - if you're planning to buy another business vehicle anyway, you could potentially time the purchase and sale strategically within the same tax year. Since you're looking at possibly getting a smaller, more fuel-efficient crossover, make sure it meets the 6,000+ lb GVWR requirement for Section 179 eligibility. Many crossovers don't qualify, which would limit your deduction to around $19,000 instead of the full amount. Also, since you mentioned you're a mortgage broker with an S-Corp, remember that the Section 179 deduction flows through to your personal return. If you expect your income to be significantly different next year, it might be worth considering the timing of both the sale and any new vehicle purchase to optimize your overall tax situation. The recapture is definitely painful, but at least you got the benefit of the deduction when you needed it. Just make sure to set aside cash for the tax hit when you do sell!