This thread has been incredibly helpful! I'm a new business owner who just got my EIN last month and was completely confused about the S Corp election timeline. Reading through everyone's experiences, it sounds like the key factor is when you actually START doing business activities, not just when you get your paperwork filed. For those still figuring this out - it seems like the consensus is that if you haven't opened business bank accounts, made sales, issued stock, or conducted any real business operations, your 2 month + 15 day clock hasn't even started yet. That's such a relief because I was stressing about some arbitrary January 1st or incorporation date deadline. Gabriel, definitely document when you first start any business activities so you have a clear timeline for your Form 2553 filing. And based on what others have shared, even if you do miss the deadline, the IRS seems pretty reasonable about late election relief for new businesses with legitimate reasons. Thanks everyone for sharing your real experiences - this is way more helpful than the confusing official guidance!

Gabriel, I went through this exact same confusion when I formed my LLC and elected S Corp status! The good news is that based on what you've described, you're likely still within your filing window. The 2 month and 15 day period starts from the earliest of three events: when you begin conducting business, when you acquire assets, or when you issue stock. Simply having your Articles of Incorporation filed doesn't automatically start the clock - it's about when you actually start operating as a business. Since you mentioned you haven't opened business bank accounts or conducted any transactions yet, your deadline period may not have even begun. The key is documenting when you take your first actual business action (opening that business bank account, making your first purchase, issuing stock certificates, etc.). I'd recommend filing Form 2553 as soon as you do start business operations, rather than waiting until near the deadline. And definitely keep detailed records of when you begin each business activity - this documentation will be valuable if the IRS ever questions your timeline. Don't stress too much about this! The IRS understands that new business owners often face confusion about these deadlines, and they're generally reasonable about late election relief if needed. But it sounds like you may not even need that option.

Has anyone had experience with settlements that include back pay AND emotional distress? My understanding is they're taxed differently - wages are subject to both income tax and employment taxes, while emotional distress is only subject to income tax.

Based on everything discussed here, it sounds like you're in a pretty straightforward situation compared to some of the more complex settlements mentioned. Since your $27k settlement appears to be primarily for lost wages from your employment dispute, you'll likely need to report the full amount as taxable income and can deduct your attorney fees as an above-the-line deduction (which effectively means you're only taxed on the $18k you received). For setting aside money for taxes, I'd recommend being conservative and setting aside about 25-30% of the $18k you actually received (so roughly $4,500-$5,400). This should cover both federal and state taxes depending on your bracket. Given the timing and amount, you should also consider making estimated tax payments to avoid underpayment penalties. The tools and services others have mentioned (taxr.ai for calculations and Claimyr for IRS questions) seem like they could save you a lot of headache in figuring out the specifics for your situation. Don't let this stress you out too much - employment settlements are pretty common and the tax treatment is well-established once you know the rules!

Does anyone know if there's a dollar limit for meal deductions? Last year I had a few expensive client dinners (around $300-400 each) that were definitely business related, but I'm worried they might look excessive to the IRS.

Great discussion here! Just wanted to add one more important point about Schedule C Line 24b meal documentation. Beyond keeping receipts and noting business purpose, I've found it helpful to take photos of the business cards of people I meet with during meals. This creates an easy backup record of who attended and their business connection to you. Also, if you're using a business credit card for meals, make sure the statement description clearly shows it's a restaurant/meal expense. Some merchants code differently than you'd expect, and having clear records helps during tax prep. I learned this the hard way when my accountant questioned a "business meal" that showed up as a generic merchant code on my statement. For anyone still confused about the 50% limitation - you deduct 50% of the actual meal cost on your Schedule C. So if you spent $100 on a qualifying business meal, you can deduct $50 as a business expense.

This thread has been such a lifesaver! I'm working part-time at a local gym and was completely freaking out about having $0 federal withholding on my paystubs. Making around $1,600 so far this year, I thought I had messed up my W-4 somehow. Reading through everyone's explanations about the standard deduction really cleared things up for me. It makes perfect sense that if you're earning well below $13,850, the withholding system would calculate zero federal income tax owed. I was overthinking it! What I found particularly helpful was learning the difference between federal income tax and FICA taxes. I was getting confused seeing some deductions but not others on my paystub. Now I understand that Social Security and Medicare taxes (7.65% total) are required from the first dollar earned, while federal income tax only kicks in once you exceed the standard deduction. I'm definitely going to start that spreadsheet tracking method that @Brooklyn Foley mentioned to keep tabs on my total earnings throughout the year. And knowing I might qualify for the Earned Income Credit when I file is actually exciting - who knew being a part-time worker could potentially mean getting money back at tax time! Thanks to everyone for sharing their experiences and making this confusing topic so much clearer!

This has been such an incredibly helpful thread! I'm also working part-time at a small local business and was getting really anxious about the $0 federal withholding showing up on my paystubs. Making about $1,400 so far this year, I kept thinking I had filled out my W-4 incorrectly or that my employer was making some kind of mistake. Reading through all these explanations about how the withholding system accounts for the standard deduction has been such a relief. It's actually pretty clever that the system automatically calculates that we won't owe federal income tax when our annual earnings stay well below that $13,850 threshold. What really helped me was understanding that this is completely separate from FICA taxes - I was seeing Social Security and Medicare deductions on my paystub and getting confused about why some taxes were being taken out but not others. Now I know that the 7.65% FICA rate applies to every dollar earned regardless of income level, while federal income tax only applies once you exceed the standard deduction. I'm definitely going to implement some of the tracking strategies mentioned here, especially keeping better records of all my paystubs and maybe starting that spreadsheet to monitor my total earnings. And learning about the potential Earned Income Credit has me actually looking forward to filing my first tax return! Thanks to everyone who shared their experiences - this community has turned what felt like a scary tax situation into something I actually understand and feel confident about!

Former environmental attorney turned tax attorney here with 7 years total experience. I made almost the exact switch you're considering 4 years ago, so I can speak directly to your situation. The transition from environmental to tax law was challenging but absolutely doable. Environmental law actually gave me a great foundation - you're already used to complex regulatory frameworks, detailed compliance work, and staying current with evolving federal and state rules. The analytical skills translate well, even though the subject matter is completely different. I did take a New York Tax School course during evenings while still practicing environmental law to build foundational knowledge. Most firms will expect some basic tax education if you're switching fields, but they'll train you on the job for firm-specific work. Regarding work-life balance with kids: I have a 6-year-old and 3-year-old, and tax law has been significantly better than environmental litigation for family time. Environmental cases were completely unpredictable - emergency injunctions, last-minute regulatory deadlines, discovery disputes that would blow up weekends without warning. Tax work, even during busy season, is more plannable. I can tell my spouse in January "I'll be working late through April 15th" rather than constantly canceling dinner plans because of some regulatory emergency. The salary progression has been solid - started at $95k switching fields, now at $140k after 4 years in tax. Not the $250k figure you mentioned, but with the predictable schedule, I can actually enjoy spending that money on family activities rather than just surviving until the next crisis ends. One piece of advice: if you do make the switch, be prepared for the first year to be intellectually humbling. Tax law has its own language and logic that takes time to internalize. But if you survived environmental law's complexity, you can definitely master tax.

Current tax attorney with 9 years experience here, and I wanted to address something that might be particularly relevant given your situation with two young kids - the seasonal nature of tax work can actually be a hidden advantage for family life if you plan around it strategically. Yes, January through April is intense (I typically work 60-65 hours those months), but here's what I've learned: those predictable crunch periods allow you to be MORE present during the rest of the year, not less. I coach my daughter's soccer team from May through October because I know my schedule is reliable then. I take real vacations in summer without checking emails constantly because there genuinely aren't urgent deadlines. Compare this to my friends in other practice areas who might randomly get pulled into a deal or litigation that destroys their summer vacation plans with 48 hours notice. The seasonality that seems like a downside is actually what creates the predictability everyone talks about. Regarding that $250k salary expectation - it's achievable but usually requires either Big Law tax (with corresponding lifestyle sacrifices) or 10+ years building a solid client base. More realistic targets for good work-life balance are $120-180k depending on market and experience level. One practical tip: if you do make the switch, negotiate your start date to begin right after busy season (May/June) so you have months to learn before jumping into the fire. Most firms are happy to do this since they're usually exhausted and not actively hiring during busy season anyway.