Wondering if either of you have student loans? This literally changed everything for my wife and me when we got married. If either of you are on income-based repayment, filing separately could save thousands in student loan payments even if you pay slightly more in taxes.

Great question! Since you're getting married in October, you'll be considered married for the entire 2024 tax year regardless of living separately. Here are the key things to consider: **Filing Status**: You'll have two options - Married Filing Jointly (MFJ) or Married Filing Separately (MFS). Head of Household won't be available once you're married. **W-4 Updates**: Yes, update your W-4s soon! With your combined income of ~$295k, you'll likely be in a higher tax bracket and may need to adjust withholdings to avoid underpayment penalties. **Children**: If filing jointly, you can claim both kids on one return. If filing separately, each claims their own child. **Property Considerations**: Since you both own homes, pay attention to the SALT deduction cap ($10k jointly vs $10k each if filing separately). With two properties, you might exceed this limit. **Run Both Scenarios**: Given your income levels and dual home ownership, definitely calculate both MFJ and MFS. Sometimes MFS works better despite losing some tax benefits, especially if you have high property taxes or state income taxes. The living situation doesn't matter for tax purposes - only your legal marital status on December 31st counts. I'd recommend using tax software to model both scenarios before deciding!

A big thing to ask is whether the buyer will want a covenant not to compete as part of the deal. This is super common with service businesses like property management. If they do, just know that payments for these are ordinary income, not capital gains. Sometimes buyers try to allocate a big chunk of the purchase price to the non-compete to get a faster deduction, while you'd prefer more allocated to goodwill for the capital gains rate.

Great point about the covenant not to compete! This is definitely something to negotiate upfront. In your case with the property management business, they'll likely want some kind of non-compete since you have existing relationships with landlords in the area. One strategy is to propose a shorter non-compete period (maybe 2-3 years instead of 5) with a smaller allocation, then push for more of the purchase price to be attributed to goodwill and the management contracts themselves. You might also consider whether there are any accounts receivable or prepaid management fees that should be allocated separately - those would be ordinary income anyway, so better to identify them clearly rather than have them lumped into other categories. Since you mentioned all the contracts were self-created, document that well. It supports treating them as part of the overall business goodwill rather than separately purchased intangible assets, which generally favors capital gains treatment when selling the entire business.

Has anyone had success getting the failure-to-pay penalties abated when filing an amended return for a capital loss carryback? We're in a similar situation but our CFO is saying it's not worth pursuing because the penalties will still apply even if the tax is reduced.

I went through almost the exact same situation with our C corp last year. A few key points from my experience: 1. The 3-year deadline Noah mentioned is correct, but don't wait until the last minute. The IRS processing time for corporate amendments can be 6+ months. 2. Regarding penalties and interest - they will be recalculated from the original due date based on your reduced liability after the carryback. However, you'll still owe some penalties for the period you didn't pay, just on a smaller base amount. 3. One thing that helped us significantly was filing Form 1139 (Application for Tentative Refund) along with the 1120X. This can speed up getting at least a partial refund while they process the full amendment. 4. Document everything about your cash flow issues and the market conditions that caused both the original payment problem and the subsequent losses. This can help with penalty abatement requests. The whole process took about 8 months for us, but we recovered about 65% of our tax liability plus got partial penalty relief. Definitely worth pursuing given your timeline - you still have nearly a year before the deadline.

Quick question about the food part of business travel - if I'm attending a conference in Vegas, are all my meals 50% deductible or just dinners out? What about if the conference includes some meals as part of registration?

Great question! I've dealt with this exact situation multiple times as a consultant who travels frequently for client meetings and industry events. The "lavish and extravagant" standard is really about reasonableness within the context of your location and business needs. Your budget of $1300-1900 for a Vegas conference sounds very reasonable. The IRS isn't expecting you to stay at budget motels - they understand that business travelers need appropriate accommodations that allow them to be productive and represent their business professionally. A few practical tips from my experience: - Standard business hotels (Hilton, Marriott, etc.) are totally fine, even in Vegas - Keep all receipts and the conference materials/agenda - Take photos of your receipts as backup - Make brief notes about business sessions attended and key contacts made - If you do any personal activities (shows, gambling), keep those expenses completely separate The key is demonstrating legitimate business purpose. As long as your primary reason for the trip is the conference and your expenses are reasonable for a business traveler in that location, you should be fine. The IRS is more concerned with people trying to write off luxury vacations than legitimate business travel to conferences. Also remember that your conference registration fee is 100% deductible, while meals not included in the registration are 50% deductible.

Anyone know how the new 3.8% Net Investment Income Tax applies to S-Corps? I heard there were some changes coming in 2025 that might affect distributions...

Great question! The S-Corp strategy is definitely still viable in 2025, and with $145K in business income, you're right in the sweet spot where it typically makes financial sense. Here's my take: you'll likely want to set your salary somewhere in the $70K-$90K range (depending on your specific role and local market rates), which would still leave you with $55K-$75K in distributions that avoid self-employment taxes. That could save you roughly $8K-$11K annually in SE taxes alone. A few practical tips from someone who made this switch: - Start researching payroll services now (Gusto, ADP, etc.) - you'll need one - Document your salary decision thoroughly - save industry salary surveys, job postings, etc. - Factor in the extra costs: payroll service (~$500-600/year), additional tax prep fees (~$500-1000), and any state fees - Consider timing - you generally need to elect S-Corp status by March 15th for it to be effective for the current tax year Even with all the extra costs and complexity, most businesses in your income range see net savings of $5K-$10K annually. The break-even point is usually around $60K-$80K in business income, so you're well above that threshold. Just make sure to run the actual numbers for your situation before making the switch!