Has anyone used TurboTax or H&R Block software for a situation like this? Wondering if they handle the 5074 form correctly or if this is really a "see a tax professional" situation?

I've dealt with similar territorial income issues and want to emphasize a few key points that might help: First, regarding the Copy A situation - this is actually more common than you'd think with territorial employers. While Copy B is what taxpayers should receive, having Copy A still allows you to report the income accurately. Just make sure to keep detailed records and consider attaching a brief explanation when you file. Second, since your parents moved mid-year from Guam to Nebraska, pay close attention to the "bona fide resident" test. Your mother, having lived in Guam since early 2021 until June 2023, would likely qualify as a bona fide resident for the portion of 2023 she was there. This affects how the income gets allocated on Form 5074. The key thing to remember is that ALL income (both W-2 and W-2GU) gets reported on the 1040, but Form 5074 determines which portion Guam gets to tax versus the US. Since you're paper filing anyway due to Form 5074, take advantage of this to include any explanatory statements about the Copy A situation or other documentation issues. Given the complexity here, especially with the mid-year move and mixed residency status, this might be worth consulting with a tax professional who has experience with territorial tax issues. The cost could easily pay for itself by avoiding potential errors or missed opportunities for tax savings.

Has anyone tried adjusting their W-4 to handle RSU/ESPP taxes instead of relying on the default withholding? I've had good results claiming "0" allowances and adding an additional dollar amount to each paycheck, but I'm wondering if there's a better approach with the new W-4 format.

I went through this exact same situation last year and ended up owing about $12K more than expected due to RSU vesting. One thing that really helped me was setting up quarterly estimated tax payments for this year to avoid the underpayment penalty. Since you mentioned you're good at handling your own taxes, you might not need a CPA for the actual filing, but it could be worth a one-time consultation to review your withholding strategy going forward. They can help you calculate exactly how much extra to withhold on your regular paychecks to cover future equity compensation. Also, don't forget to check if you qualify for any deductions you might have missed - things like state and local tax deductions (up to $10K), charitable contributions, or if you itemize, mortgage interest. Sometimes there are small things that can help offset the bill. The good news is that once you adjust your withholding strategy, this becomes much more manageable in future years. It's really just a timing issue where the withholding doesn't match your actual tax rate.

A lot of people are missing something important here. The January 1 effective date CAN be valid even for an entity formed mid-year! Under Revenue Procedure 2013-30, the IRS allows for a retroactive S election for the entire tax year if: 1. You intended to be an S-Corp from formation 2. You file Form 2553 within 3 years and 75 days of the desired effective date Your accountant probably knows this and is trying to get you S-Corp treatment for the entire 2024 tax year. This is actually pretty standard practice.

I'm going through something very similar right now! My LLC converted to an S-Corp in August 2024, and my CPA also put January 1, 2024 as the effective date on Form 2553. I was initially confused like you, but after reading through these responses and doing some research, it seems like this is actually a legitimate strategy. What I learned is that the IRS has specific relief procedures (like Rev Proc 2013-30 that others mentioned) that allow for retroactive S elections under certain circumstances. The key is that you have to demonstrate you intended S-Corp treatment from the beginning and meet the filing deadlines. I ended up calling the IRS Business line to check on my election status, and the agent confirmed they received it and said it looked fine. She mentioned that even if they can't approve the January 1st date, they'll just adjust it to the actual formation date - no penalties or major issues. My advice would be to give it a few weeks to process, then call to check the status. If there are any problems, the IRS will send you a letter explaining what needs to be corrected. Don't panic - this seems to be a pretty routine situation that accountants deal with regularly!

Can somone explain why the government allows businesses to deduct losses but not individual gamblers? If I start an LLC for my sports betting, could I then deduct the losses?

I've been following this discussion and wanted to add something important that hasn't been mentioned yet - the timing of when you report gambling winnings and losses. If you're planning to make that $3,800 bet next month, remember that any winnings or losses will be reportable on your 2025 tax return (due April 2026), not your current 2024 return. This might affect your tax planning strategy. Also, if you do win and receive a Form W-2G from the sportsbook (which you typically get for winnings over $600 that are at least 300 times your wager), the IRS already knows about your winnings. Make sure you report them even if you don't receive a tax form - the threshold for reporting gambling income to the IRS is actually lower than what triggers a W-2G. One more thing - if you're in a state where sports betting winnings are subject to state taxes, remember that the rules for deducting gambling losses at the state level can be completely different from federal rules. Some states don't allow gambling loss deductions at all, even if you itemize federally.

Have you checked whether your transcript shows any specific codes besides the missing 846? According to IRM 21.4.1, the presence of codes like 570 or 420 would indicate specific types of reviews that could explain your timeline. Also, did you receive any correspondence from the IRS regarding verification of your Child Tax Credit eligibility?

I think you're in pretty good shape compared to some situations I've seen. The community wisdom around here is that PATH Act returns with changing as-of dates but stable processing dates are usually just working through the system normally. In my experience (and I've filed PATH Act returns for 6 years now), the pattern you're describing typically resolves with a deposit 1-2 weeks after your last as-of date change. The real red flags would be if you saw a 570 code without a 571 resolution, or if your processing date started moving backward, or if you got a 9001 code (verification needed).