Did anyone mention the W-2/W-3 filing requirements? Those have separate penalties if not filed, and you'll need to deal with those too. Also, most states have their own payroll tax requirements with their own penalties. Fixing federal is only part of the solution.

This is a really complex situation, but you're not alone in making this mistake! I went through something similar with my S-corp in 2021. The key thing to understand is that the IRS expects S-corp owners who work in the business to pay themselves a "reasonable salary" before taking any distributions. Without proper payroll, they could indeed reclassify your entire $53k as wages, which would eliminate your QBI deduction entirely. However, all is not lost. You can still file the required payroll forms (941, 940, W-2s, etc.) late and pay the associated penalties. This allows you to establish a reasonable salary amount and potentially save the remaining income as a distribution eligible for QBI. For your situation with $53k after deductions, if you can justify $36k as reasonable compensation, you'd potentially have $17k that could qualify for the 20% QBI deduction (assuming you meet the income thresholds, which it sounds like you do). The penalties will sting, but they're usually less than the tax savings from properly structuring your income. Make sure your CPA helps you document why your chosen salary amount is reasonable - industry data, comparable positions, hours worked, etc. This documentation becomes crucial if the IRS questions your salary determination later. Also don't forget about state payroll requirements if applicable - those often have separate penalties and filing requirements.

I'm dealing with this right now too - my refund was rejected about 3 weeks ago due to a closed account. The uncertainty is definitely the worst part! Based on what I'm seeing here, it sounds like most people are getting their checks between 4-6 weeks, but there are some horror stories of much longer waits. One thing I learned from calling my bank is that they usually send the rejection notice back to the IRS within 1-2 business days, so at least that part happens quickly. I've been checking my transcript weekly and finally saw some movement last week with new transaction codes showing up. For anyone waiting, I'd definitely recommend setting up USPS Informed Delivery like others mentioned - it's free and at least gives you a heads up when mail is coming. I also put in a mail hold at the post office since I'll be traveling next week and don't want to miss the check if it arrives while I'm gone. Hang in there everyone - hopefully we'll all have our checks soon! 🤞

I'm in the exact same boat! My refund got rejected last month because I forgot I closed that account after switching banks. It's so frustrating when you're counting on that money and then have to wait even longer because of a simple oversight. From what I've been reading here and my own research, it seems like the timeline really varies. Some people get lucky with the 3-4 week timeframe, but others are waiting 2+ months. I think it depends a lot on how backed up the IRS is at the time and maybe even which processing center handles your return. I've been obsessively checking the "Where's My Refund" tool but like others mentioned, it doesn't seem to update very reliably for paper check situations. I'm definitely going to try some of the suggestions here like pulling my transcript and setting up USPS Informed Delivery. The waiting is honestly the hardest part - especially when you have bills coming due and you're not sure when to expect the money. Hope yours comes through soon! At least we're not alone in this situation. 🤞

Does anyone know if you need to take the withdrawal in the same tax year as paying the tuition? My daughter's spring semester tuition is due in December, but I was thinking of waiting until January to take the IRA distribution.

Just to add to the great advice already shared - make sure you understand the interaction between IRA withdrawals and education tax credits. If you use IRA funds to pay for tuition, you generally can't also claim the American Opportunity Tax Credit or Lifetime Learning Credit for those same expenses. You'll need to decide which benefit is more valuable for your situation. Sometimes it's better to pay for some expenses out of pocket to preserve eligibility for the education credits, and use the IRA withdrawal for other qualified expenses like room and board that don't qualify for the credits. Also, since you mentioned withdrawing $100K, be aware that this could significantly increase your taxable income for the year and potentially push you into a higher tax bracket. You might want to consider splitting the withdrawal across two tax years if possible to manage the tax impact.

Filed Jan 31st with JH/Serve and still waiting too! Just checked my transcripts this morning and finally got the 846 code for 2/27 🎉 So relieved after all this waiting. For those still waiting, it looks like they're processing in batches by filing date. Keep checking those transcripts daily - the 846 code will show up before the money hits your Serve card. Hang in there everyone!

Filed with JH/Serve on Feb 3rd and still anxiously waiting here! This thread has been such a lifesaver - I was starting to panic seeing all the posts about people getting their refunds already. Now I understand it's just the PATH act timeline and we're all in the same boat. Really appreciate everyone sharing their experiences and dates, especially seeing the 846 codes starting to show up for late Jan filers. Gives me hope that us early Feb filers should see movement soon! The transcript checking addiction is real though 😅

This is such a common confusion for restaurant owners! I made the same mistake in my first year running a diner - tried to claim both the deduction AND the credit for the same FICA taxes on tips. My CPA caught it during our year-end review and explained that the IRS specifically prohibits this double-dipping. What helped me understand it better: think of it as choosing between getting $1 off your tax bill (credit) versus reducing your taxable income by $1 (deduction). The credit is almost always more valuable since it's a direct reduction in what you owe, while the deduction only saves you money based on your tax bracket. One tip that saved me headaches - I now track all our tip-related FICA taxes in a separate spreadsheet throughout the year so I can easily calculate the maximum credit available when tax time comes. Makes the whole Form 8846 process much smoother!

Great question about Form 8846! As others have confirmed, you definitely cannot claim both the deduction and the credit for the same FICA taxes - that would be double-dipping and is specifically prohibited by IRS rules. Here's what I'd recommend: calculate both scenarios to see which gives you the bigger tax benefit. The credit on Form 8846 reduces your tax liability dollar-for-dollar, while the deduction only reduces your taxable income. In most cases, the credit will save you more money, especially if you're in a lower tax bracket. One thing to keep in mind - make sure you're only claiming the employer portion of FICA taxes on tips, not the employee portion. The credit is specifically for the 7.65% you pay as the employer (Social Security and Medicare taxes), not what your employees pay. Also, double-check that your restaurant qualifies - the business needs to be in the food and beverage industry where tipping is customary. Given that you mentioned running a restaurant, you should be good there. With $8,700 in eligible FICA taxes, this credit could provide significant tax savings, so it's definitely worth claiming correctly!