One other thing to consider - depending on your state, you might be able to get some state tax relief even if you can't lower your federal bracket. Some states have more generous deductions or lower rates for certain types of income. What state are you in?

I'm dealing with a very similar situation after receiving a large severance earlier this year. One strategy that worked well for me was timing my year-end bonus deferral at my new job - if your employer offers this option, you might be able to defer some of your December income to next year. Also, don't forget about the potential for increasing your state tax withholding if you're in a state with income tax. While it won't change your federal bracket, making sure you're not hit with additional state penalties can help your overall tax situation. Have you looked into whether you can contribute to a SEP-IRA if you did any freelance or consulting work during your unemployment period? Even small amounts of self-employment income can open up significantly higher contribution limits than traditional IRAs. The key is to act quickly since we're getting close to year-end. Many of these strategies need to be implemented before December 31st to count for this tax year.

Just wanna point out that an S corp with $1M profit should be maxing out retirement contributions too! You can put up to $68,000 in a Solo 401k for 2025 (that's $23,000 employee contribution plus 25% of your salary as employer contribution up to the max). This reduces your taxable income immediately. Also look into setting up a defined benefit plan if you're planning to have similar profits for several years. Our S corp was able to legally contribute over $200k annually to retirement this way, creating a massive tax deduction.

One thing I haven't seen mentioned yet is the potential for Section 199A deduction (QBI deduction) which can be huge for S corp owners. With $700K in pass-through income, you could potentially deduct up to 20% of that ($140K) if your business qualifies and you're under the income thresholds. However, there are some complexities with S corps and QBI - the deduction is generally based on your K-1 income minus your W-2 wages from the S corp. So if you take a $150K salary, your QBI would be calculated on $550K, potentially giving you up to $110K in additional deductions. The rules get tricky around the income limits and whether your business is a "specified service trade or business" (SSTB), but with proper planning this could save you tens of thousands. Your accountant should definitely be running these numbers for you, especially since you're right at the income levels where the phaseouts start kicking in.

Quick note of caution from someone who tried to be clever with state taxes: if you claim a Wyoming address but are clearly operating from Connecticut, you're asking for trouble. States are getting much more aggressive about finding businesses that should be paying them taxes. Some activities that can create nexus in a state even if your official address is elsewhere: - Physical presence of owners/employees working in the state - Storing inventory in the state - Having contractors in the state - Regularly meeting clients in the state - Generating significant revenue from customers in the state The "doing business in" test is getting broader, not narrower. Be careful and get professional advice.

As someone who's been through this exact situation with a remote e-commerce C-corp, I wanted to share some practical insights that might help. First, regarding your Delaware incorporation - you're absolutely right to consider QSBS eligibility, but make sure you understand the requirements. The stock must be issued when the company has less than $50M in gross assets, and you need to hold it for at least 5 years. Delaware is indeed the gold standard for this. For your state tax strategy, I'd strongly recommend Wyoming over Nevada or Texas. Wyoming has no corporate income tax, no personal income tax, and very low annual fees ($50 vs Delaware's minimum $175 franchise tax). The privacy protections are also excellent. Here's what worked for my setup: 1. Used Northwest Registered Agent for Wyoming ($125/year including mail forwarding) 2. Established a business address through a co-working space in Cheyenne that offers virtual office services ($89/month) 3. Set up a Wyoming LLC to hold the business address, then had my Delaware C-corp use that as its principal place of business The key insight: having legitimate business operations at your Wyoming address strengthens your position. Consider using a Wyoming-based fulfillment center if possible, or routing some business functions through that state. Regarding the Connecticut nexus concern - since you're both truly nomadic, document your travel patterns. If neither of you is spending more than a few weeks per year in CT, you're likely safe. But keep detailed records of where you're actually conducting business activities. One last tip: set up proper expense tracking from day one. Remote businesses often have deductions that traditional businesses miss, and good documentation will be crucial for both state nexus questions and potential QSBS qualification later.

Has anybody used the supplemental rate calculator on the IRS website? I tried using it for my bonus but I think I'm doing something wrong because it says my withholding should only be around 35% total but my company took out almost 50%.

This is completely normal and you're not alone! The 52% withholding you're seeing is exactly what I experienced with my last bonus. The key thing to remember is that this is just withholding - it's not your actual tax rate on the bonus. Your employer is required to withhold at the supplemental wage rate, which is 22% for federal taxes, plus your state rate, plus payroll taxes (Social Security and Medicare). In high-tax states, this can easily add up to 50%+ in total withholding. The good news is that when you file your taxes, your bonus gets added to your regular income and taxed at your marginal rate. Since you make $95k, your effective tax rate on the bonus will likely be much lower than 52%. You'll probably get a decent refund when you file, especially if your regular paycheck withholding is also set up correctly. I'd recommend keeping track of your total withholding throughout the year so you can adjust your W-4 if needed to avoid a massive refund (which is basically giving the government an interest-free loan). But for now, just know that most of that extra withholding will come back to you!

Just a random thought - did you get any back pay with your promotion? Sometimes companies will pay the difference between your old rate and new rate retroactively, but they might tax it at a higher rate if it's classified as a bonus or supplemental wages. Might explain the one-time tax increase.

This definitely sounds like a payroll system error. Based on what you've described - OASDI and Federal Withholding literally doubling overnight with no other changes - this is almost certainly not a legitimate tax adjustment. A few things to check before you talk to HR on Monday: 1. Look at the actual tax rates being applied. OASDI should be exactly 6.2% of your gross wages, and if it's showing as 12.4%, they're likely deducting both the employee and employer portions from your check (which is wrong). 2. Check if there are any new deduction codes or if existing codes appear twice on your paystub. Sometimes system glitches will apply the same deduction multiple times. 3. Bring printed copies of your last "normal" paycheck and this reduced one to HR. Ask them to do a line-by-line comparison and explain exactly what changed in their system. 4. If your company uses a third-party payroll service (like ADP or Paychex), the error might be on their end, and your HR might need to contact them directly. Don't panic - this type of error is usually fixable once identified, and you should get the overwithholding back as an adjustment on a future paycheck. Document everything and stay on top of HR until it's resolved.