Another thing to remember - they might give you the bonus in 2023 but depending on when you get it, it could count for 2024 taxes instead. My company pays bonuses in January for the previous year's performance, so it counts toward the new tax year.

Great question! Just to add one more perspective - if you're concerned about the higher withholding rate on your bonus, you can always adjust your regular paycheck withholding for a few months to compensate. I did this last year when I got a large bonus and knew the 22% federal withholding would be way more than my actual tax liability. I temporarily increased my allowances on my W-4 for the last few paychecks of the year to reduce regular withholding, which helped balance things out. Just make sure to change it back at the beginning of the new year! It's a bit of extra work but can help with cash flow if you don't want to wait until tax season to get that money back.

I was denied too. Called IRS directly. Waited three hours. Got disconnected. Tried again. Same result. Used Claimyr instead. Got through in 15 minutes. Agent confirmed my return was fine. No flags. Just normal processing. Advance denial wasn't on their end. Just TurboTax being picky. Worth the fee to stop worrying. https://youtu.be/_kiP6q8DX5c

Tbh the whole TT advance thing is kinda a mess this yr. Lots of peeps getting denied for no clear reason. From what I've seen in the FB groups, ppl who filed around the same time are getting their normal refunds regardless of whether they got approved for the advance or not. IRS is moving pretty quick for most folks - way better than last yr's disaster. FWIW, my friend who got denied the advance actually got her refund BEFORE her friend who was approved for the advance lol. The system makes zero sense sometimes.

Don't overlook state tax implications in your decision! I rolled my Solo 401(k) to a Roth IRA last year, and there was a state-specific tax wrinkle I hadn't considered. In my state, there are different creditor protections for retirement accounts. My Roth IRA only gets protected up to a certain dollar amount, while the 401(k) had unlimited protection. For someone running their own business where liability is a concern, this could be important.

Great question! As someone who's dealt with similar decisions for my own small business, I'd recommend carefully weighing the administrative burden vs. benefits at this point. Since you mentioned your business is now stable and you don't anticipate needing the loan feature, the Roth IRA route seems compelling - especially given those annual TPA fees. One consideration that hasn't been fully explored yet: if you're planning to scale your business and potentially hire employees in the future, maintaining the Solo 401(k) structure might give you more flexibility for transitioning to a regular 401(k) plan later. But if you're planning to stay solo, the Roth IRA's simplicity and lower costs are hard to beat. Also worth noting - make sure to coordinate the timing of your rollover with your backdoor Roth IRA contributions to avoid any complications. The pro-rata rule shouldn't be an issue since you mentioned no Traditional IRA balances, but timing can still matter for tax reporting purposes.

Something no one has mentioned yet - when you say your bonus "bumped you up into the next tax bracket," remember that our tax system is marginal. Only the portion of your income that falls into that higher bracket gets taxed at the higher rate, not all your income. This is a super common misunderstanding. A bonus can never cause you to lose money by pushing you into a higher bracket. The higher tax rate only applies to the amount of income above the threshold for that bracket.

Great question about bonus taxation! I went through something similar a few years back when I got my first large bonus. Here's what I learned: Your employer likely used the flat 22% federal withholding rate on your bonus (called the "supplemental rate"), but if your actual marginal tax rate is higher than 22% - which it sounds like it is given the size of your bonus - then not enough was withheld. For example, if you're in the 24% or 32% tax bracket, that 22% withholding leaves you short. The bonus is taxed as ordinary income at your marginal rate, but the withholding was done at the lower flat rate. A few things you can do going forward: 1. Update your W-4 to have additional withholding throughout the year to cover expected bonuses 2. Make an estimated tax payment in the quarter you receive your bonus 3. Ask your employer if they can withhold extra from your bonus (some will do this if you request it in advance) The good news is this is totally fixable for next year with some planning. And remember - you're not being "penalized" for the bonus, you just didn't have enough tax withheld upfront to cover the actual liability.

Heads up - don't forget state tax implications too! My S-Corp has owners in 3 different states and each state has different rules about estimated payments. Some require the S-Corp to make composite payments on behalf of non-resident shareholders, while others require each shareholder to file their own estimated payments. This created a huge mess for us at tax time last year because we didn't plan properly. Had to pay penalties in two states.

One thing that hasn't been mentioned yet is the importance of establishing clear procedures early in the year for tracking each owner's quarterly payments. We learned this lesson the hard way when tax season came around and nobody could remember who had paid what. I'd recommend creating a shared spreadsheet or using accounting software to track each partner's quarterly payments throughout the year. Include columns for each owner's projected annual tax liability, quarterly payment amounts, actual payment dates, and any adjustments made based on updated income projections. Also, make sure your S-Corp provides regular profit updates to all owners (at least quarterly, preferably monthly if income is volatile). This allows each owner to adjust their estimated payments if the business is performing significantly better or worse than projected. The last thing you want is for someone to underpay all year because they were working off stale projections. Consider having a brief quarterly meeting where you review actual vs. projected income and discuss any needed adjustments to individual estimated payments. It takes maybe 30 minutes but can save everyone from penalties and surprises at tax time.