Has anyone here actually formed an S-Corp after being sole prop? I'm considering it for 2023 after getting hit with massive SE taxes like OP. Is it worth the hassle and extra costs?

I've been in a similar situation and it's incredibly frustrating! Unfortunately, as others have confirmed, retroactive S-Corp elections for 2022 are essentially impossible at this point. The deadlines are very strict. However, don't give up on reducing your SE tax burden! A few additional strategies to consider: 1. **Quarterly estimated payments for 2025** - Start making them now to avoid underpayment penalties and spread the cash flow impact 2. **Maximize retirement contributions** - If you haven't already, consider a SEP-IRA contribution (up to 25% of net SE income or $66,000 for 2023, whichever is less). This reduces your taxable income. 3. **Payment plan with IRS** - If the tax bill is overwhelming, the IRS offers installment agreements. You'll pay interest, but it can make the burden manageable. 4. **Professional review** - Given the size of your potential tax bill, it might be worth having a CPA or EA review your return one more time before filing to ensure you're not missing any legitimate deductions. For 2023 and beyond, definitely explore S-Corp election if your profits justify it. The SE tax savings can be substantial once you account for the additional compliance costs. Hang in there - this too shall pass!

I still don't understand how our tax system works. If I'm in the 12% bracket based on my annual salary, why does a bigger check suddenly get taxed at 22%? That's nearly double! The system seems designed to confuse us. 😤

I totally get your frustration! I went through the same thing when I got my first big bonus. The 22% withholding on supplemental wages feels like a punch to the gut when you're expecting your regular withholding rate. What helped me was thinking of it this way: the payroll system doesn't know your full financial picture - it just sees a big paycheck and assumes you might be in a higher tax bracket. The 22% rate is like a "safety net" to make sure the IRS gets enough upfront, even if it's too much. You're absolutely right that it's annoying to give the government an interest-free loan, but at least you know you'll get it back at tax time if you're actually in the 12% bracket. Some people actually prefer the forced savings aspect, but I'm like you - I'd rather have my money now!

idk but my cousin had the same issue last year and it turned out to be a mistake on their end. keep pushing!

Have you tried calling the IRS directly at 1-800-829-1040? They can usually tell you if there are any holds or offsets on your account that might not show up on the Treasury offset line. Also, if you have an online IRS account, you can check your account balance there - sometimes it shows pending offsets before they actually process. Keep documentation of all your calls and reference numbers in case you need to dispute something later.

I've been filing taxes for over 15 years, and I've learned that while exceptions exist, it's best to assume the system works as designed. In my experience, about 95% of refunds follow the same pattern: transcript updates with an 846 code and DDD, then money arrives on that exact date (or 1-2 days early for certain banks). Last year I thought I might get paid early because my transcript hadn't updated but WMR showed approved, but it still followed the normal timeline. Just trying to set realistic expectations - the waiting game is tough but almost everyone goes through it.

I can share my experience from this filing season - I actually did receive my refund 2 days before the DDD appeared on my transcript! Filed in early February, transcript showed "still processing" for weeks, then suddenly got the direct deposit. The DDD (846 code) didn't show up until the day after I received the money. My bank (Chase) processed it on a Friday even though the official date was the following Monday. So yes, it can happen, though it seems pretty rare. I think it depends on your bank's processing schedule and how the IRS batches payments. Don't count on it happening, but it's not impossible. The transcript system definitely lags behind the actual payment processing sometimes.

One thing nobody mentioned - Form 8332. If parents can agree, the custodial parent can sign this form to release their claim to the exemption, even if the child lived with them more. This might be a good solution if they can work out an agreement (like each parent claims one child). Also, if they're truly 50/50 and neither parent can prove they had more nights, the IRS tiebreaker goes to higher AGI anyway, which sounds like it would be your brother.

Your brother should also consider setting up a shared photo album (like Google Photos or iCloud) where both parents can add timestamped photos of the kids during their respective custody time. This creates an automatic digital trail that's hard to falsify. I'd also recommend he starts taking screenshots of his phone's location history if he has it enabled - it can show patterns of where he was (home vs. ex's house) during custody exchanges. Most smartphones track this automatically. One more tip: if the twins go to any regular activities (library story time, playground visits, etc.), he should try to get receipts or sign-in sheets when possible. Even small documentation like this helps build the overall picture of active custody. The key is starting this documentation NOW, not waiting until tax season. The IRS wants to see consistent patterns over time, not just a few weeks of suddenly detailed record-keeping.