This is exactly the kind of tax planning headache that keeps business owners up at night! I went through something similar with our family LLC last year. One thing that helped clarify the situation was getting copies of IRS Revenue Ruling 2013-14, which specifically addresses how Section 179 deductions flow through to grantor trust beneficiaries. The key distinction is that while your revocable living trust may technically be the "shareholder," for tax purposes you (as the grantor) are considered the true owner. This means the Section 179 deduction should flow through to your personal return just as if you owned the S Corp shares directly. However, I'd strongly recommend documenting this properly. Make sure your trust documents clearly establish grantor trust status, and consider having your tax preparer include a brief statement with your return explaining the pass-through treatment. The IRS likes to see clear documentation trails, especially with larger deduction amounts like your $145k equipment purchase. Also worth noting - if you're planning more equipment purchases in the future, you might want to consider the timing. The annual Section 179 limit for 2023 is $1,160,000, so you're well within the threshold, but planning ahead can help optimize your deductions across multiple tax years.

I just wanted to thank everyone for all the incredibly helpful responses here! This thread has been a goldmine of information that I couldn't find anywhere else. Based on everything discussed, it sounds like our revocable living trust should qualify as a grantor trust, which means we should be able to take advantage of the Section 179 deductions for our $145,000 equipment purchase. I'm going to take a multi-pronged approach: first, I'll review our trust documents with our attorney to confirm the grantor trust language is clear and current. Then I'll either use one of the tax analysis tools mentioned or try to get through to the IRS directly using that Claimyr service to get official confirmation. The Revenue Ruling 2013-14 reference was especially helpful - I had no idea that specific guidance existed. I'm also going to discuss the timing optimization strategies with our accountant since we have another equipment purchase planned for early next year. One follow-up question for the group: has anyone here had experience with IRS audits when claiming Section 179 deductions through trust-owned entities? I want to make sure we document everything properly upfront to avoid any issues down the road. With the amount we're deducting, I want to be extra cautious about having all our ducks in a row. Thanks again everyone - this community has been invaluable!

Has anyone tried switching to another software? I had a similar problem with FreeTaxUSA and ended up using TaxSlayer instead, which handled my Roth distributions much more intuitively.

Just wanted to add another perspective here - if you're planning to make regular Roth distributions in the future, it might be worth keeping detailed records of your contributions by year. I learned this the hard way when I had to reconstruct 10+ years of contribution history for the IRS. Create a simple spreadsheet with the date, amount, and tax year for each contribution you've made. This makes it much easier to calculate your basis and prove to the IRS (if needed) that your distributions are indeed from contributions rather than earnings. Also, if you've ever done any Roth conversions, those amounts get added to your contribution basis too, but with a 5-year waiting period for penalty-free withdrawals. Just something to keep in mind for future planning.

The late paychecks are yet another violation! Even for independent contractors, they need to pay you according to your contract. If you're actually an employee (which it sounds like you are), most states have strict laws about when employees must be paid. You might want to check your state's department of labor website for information about filing a wage claim. That's often faster than waiting for the IRS to make a determination on your employment status.

This situation is incredibly frustrating and unfortunately all too common. Based on everything you've described, this sounds like clear employee misclassification. The combination of filling out W-4 and I-9 forms (employee paperwork), being promised eventual "real" employee status with benefits, working set hours with overtime expectations, and having late paychecks are all major red flags. Here's what I'd recommend doing immediately: 1. **Document everything** - Save all emails, take screenshots of your payroll system, keep records of hours worked and late payments. This will be crucial evidence. 2. **Calculate what you're owed** - As a misclassified employee, you're currently paying both employee AND employer portions of Social Security/Medicare taxes (15.3% instead of 7.65%). Your employer should be covering their half. 3. **File quarterly estimated taxes** - To avoid penalties, make sure you're making quarterly payments on the income you're receiving now, even while you work to resolve the classification issue. 4. **Consider your timing** - Many people wait until they have another job lined up before filing formal complaints, since retaliation (while illegal) does happen. You have multiple avenues for resolution: Form SS-8 with the IRS for status determination, Form 8919 for uncollected employment taxes, state labor department for wage violations, and potentially your state's unemployment office since misclassified workers are often denied benefits they should receive. Don't let them take advantage of your recent graduate status - you have rights here and this practice costs you real money.

Any good resources to learn about partnership tax? I've been using Becker but their partnership stuff isn't very thorough. Have an interview next month and need to study up.

As someone who struggled with partnership tax concepts during my own CPA studies, I'd recommend starting with the fundamentals and building up. Here's what helped me: First, master the basic flow: Partnership income/losses flow through to partners based on their ownership percentages, but partners are taxed on their allocated share whether or not they receive distributions. This is key to understanding everything else. For guaranteed payments vs distributions, think of it this way: Guaranteed payments are like paying an employee (deductible expense, subject to SE tax), while distributions are like paying dividends to shareholders (not deductible, generally no SE tax). The Section 754 election is all about fairness when someone buys into an existing partnership. Without it, new partners can get stuck paying tax on appreciation that happened before they joined. Practice with real numbers - work through examples where you calculate the tax impact on both the partnership and individual partners. This will make the concepts stick much better than just reading about them. Good luck with your interview! The fact that you're preparing this thoroughly shows you're taking it seriously, which will definitely come across to the interviewers.

Has anyone had this issue with H&R Block software specifically? Mine keeps giving me an error when I try to enter both companies, saying the name doesn't match the EIN in their database. I'm wondering if I should just go with a tax professional at this point.

I went through this exact same situation with my PEO W-2 from Insperity last year. The key thing to remember is that the IRS matching system is looking for the EIN to match the primary employer name listed first on the W-2. In your case, "PEO Services LP" should go in the employer name field exactly as shown, because that's what matches their EIN in the IRS database. Your actual workplace "Acme Industries LLC" is listed underneath as additional information, but it's not what the IRS system uses for verification. I made the mistake of trying to "correct" it the first time and got a rejection notice. Once I re-filed with the PEO as the primary employer name (exactly matching the W-2), it went through without any issues. The tax software warnings are there for a reason - they're trying to prevent mismatches with the IRS database. Don't overthink it - just enter it exactly as it appears on your W-2 and you'll be fine!