As someone who's also new to understanding IRS transcripts, this entire discussion has been absolutely enlightening! I encountered Code 290 on my transcript recently and, like many others here, was initially concerned by the "additional tax assessed" language. But after reading through all these detailed explanations and personal experiences, I now understand it's simply the IRS's standard documentation for tax liability assessment. What I found most helpful was learning to read the codes chronologically to understand the complete story of my return's processing. The practical tips about checking for $0.00 amounts (indicating routine processing), comparing posting dates to filing dates, and looking for accompanying codes like 971 or 846 have given me a solid framework for interpreting my transcript. I'm particularly grateful for the recommendation of IRS Publication 4803 - having an official reference guide makes everything feel much less intimidating. It's amazing how this community has transformed what seemed like mysterious government codes into an understandable, logical system. Thank you all for creating such a supportive environment where newcomers can learn from your experiences without feeling embarrassed about not knowing these things initially! For other newcomers who might be reading this, the key takeaway seems to be: don't panic over Code 290, especially if it shows $0.00 and appeared shortly after filing - it's most likely just routine processing confirmation.

As a newcomer to this community and someone who just started dealing with tax transcripts myself, I want to express my gratitude for this incredibly comprehensive discussion! I was in the exact same boat as the original poster - recently retired and completely confused when I saw Code 290 on my transcript for the first time. The "additional tax assessed" language immediately made me think I had done something wrong or owed additional money. Reading through everyone's experiences has been like taking a crash course in transcript interpretation. The key insights that really helped me understand my own situation were: • Code 290 with $0.00 shortly after filing = routine processing confirmation • The importance of reading codes chronologically to see the "story" of your return • Checking the posting date relative to your filing date for context • Looking for accompanying codes like 971 (notices) or 846 (refunds) to complete the picture I've bookmarked IRS Publication 4803 as recommended and feel so much more confident about interpreting these codes now. It's amazing how what initially seemed like cryptic government language is actually a logical documentation system once you understand the basics. For other newcomers who might stumble across this thread: don't panic when you see Code 290! If it shows $0.00 and appeared within a few weeks of filing, you're almost certainly looking at routine processing. This community has done an outstanding job of turning a confusing topic into understandable, actionable guidance. Thank you all for sharing your knowledge so generously!

Great discussion here! As someone who went through the S-Corp conversion process recently, I wanted to add a few practical points that helped me navigate this: For the "reasonable salary" question, the IRS doesn't give a specific percentage, but a common benchmark tax professionals use is that salary should represent what you'd pay someone else to do your job. For online businesses with high profit margins, this can be tricky since you might be doing work that would normally require multiple employees (marketing, product development, customer service, etc.). I ended up settling on roughly 35-40% of my business profit as salary after researching comparable wages for similar roles in my industry. The key is being able to justify it if questioned - keep documentation of your research into industry wages. Regarding quarterly payments, I handle them from the business account since that's where the cash is. The IRS doesn't care which account the payment comes from as long as it's properly documented. Just make sure you're making those payments! The penalty for underpayment can be substantial, especially if your income has grown significantly from the previous year. One last tip: consider opening a separate savings account just for tax reserves. I automatically transfer 30% of each month's profit there and never touch it except for tax payments. Takes the stress out of wondering if I have enough when quarterly payments are due.

This thread has been incredibly helpful! I'm in a similar situation with my S-Corp LLC and have been overthinking the tax implications of moving business funds to personal accounts. One thing I wanted to add from my recent experience: when documenting these transfers as "shareholder distributions," make sure you're also keeping track of the dates and amounts in a separate spreadsheet or log. My accountant told me this makes year-end tax prep much smoother and provides a clear audit trail if needed. Also, regarding the reasonable salary discussion - I found it helpful to look up salary data on sites like Glassdoor and PayScale for roles similar to what I do in my business. This gave me concrete numbers to justify my salary level and helped me feel more confident about the split between salary and distributions. The quarterly estimated tax payment advice here is spot on too. I learned the hard way that the IRS expects payments based on current year income, not just previous year amounts. If your business has grown significantly, make sure you're calculating estimated taxes on your projected current year profit, not just paying what you owed last year. Thanks everyone for sharing your experiences - this is exactly the kind of real-world guidance that's hard to find elsewhere!

I went through this exact same headache last year! The key issue is that TurboTax's interface can be confusing when the tax year of the excess contribution differs from the year you're filing. Since you made the excess contribution in 2022 but are filing in 2025, TurboTax might not be showing the right prompts. Here's what worked for me: Go to the "Income" section first, then look for "Health Savings Account (HSA)" rather than starting in the deductions/health section. When you get to the HSA income questions, there should be an option about distributions or withdrawals. Enter your total distribution amount ($1888.78) there. The system should then ask you to categorize the distribution. This is where you can specify that $1825 was an excess contribution removal (which won't be taxed) and $63.78 was earnings (which will be taxable income). Make sure your 1099-SA matches what you're entering - if the codes are wrong like others mentioned, definitely get a corrected form from your HSA provider first. Also double-check that you're in the right tax year section of TurboTax. Sometimes the software defaults to the wrong year if you have multiple years saved.

I've dealt with HSA excess contribution issues in multiple tax software programs, and the key is understanding that the reporting depends heavily on the timing and documentation. Since you made the excess contribution in 2022 but are filing your 2023 return (assuming that's what you mean by "2025 filing"), you need to be very careful about which tax year each piece gets reported in. The $1825 excess contribution that was timely removed shouldn't appear as income on any return if it was removed by the deadline. However, the $63.78 in earnings needs to be reported as income in the year you RECEIVED the distribution, not the year you made the original contribution. One thing I haven't seen mentioned yet: make sure you didn't already report this removal on a previous year's return. If you filed your 2022 return after removing the excess but before the deadline, you might have already handled this correctly. Check your 2022 return to see if the excess contribution was excluded from your HSA deduction. Also, TurboTax sometimes has different workflows depending on whether you're using the basic, deluxe, or premium version. The HSA sections can look different across versions, which might explain why you're not seeing the options others have described.

Don't forget about Section 179! In 2025, you can potentially deduct up to $1.2 million of qualified business assets in year 1 instead of depreciating over time. This could help offset some of the impact of those non-deductible principal payments.

Based on all the great advice here, I'd strongly recommend getting a CPA involved sooner rather than later. The loan treatment is just one piece of the puzzle - you'll also need proper asset allocation for the purchase, quarterly estimated tax planning since S Corp profits flow through to your personal return, and basis tracking from day one. Since you're closing in a couple weeks, make sure your purchase agreement clearly specifies the asset allocation. The IRS requires you and the seller to agree on how the $250k+ purchase price gets allocated across different assets (equipment, customer lists, goodwill, etc.) using Form 8594. This allocation directly impacts your future depreciation/amortization deductions. Also consider setting up a separate business savings account specifically for tax payments. With $60k annual loan payments reducing available cash and S Corp profits flowing through to your personal taxes, you'll want to systematically set aside money for quarterly estimates to avoid underpayment penalties.

I went through this exact same situation with my sister last year for our mom's care fund. The nominee reporting is a real requirement, but there's actually a middle-ground approach that worked well for us. We kept the joint account (since emergency access was important) but created a simple written agreement documenting our contribution percentages and how we'd handle the tax reporting. Each tax season, I calculate her portion of the dividends and capital gains based on our agreement, then report it as a nominee distribution on Schedule B. The key is keeping good records of your contributions throughout the year - I use a simple spreadsheet tracking deposits and the running percentage split. This makes the year-end tax calculations much easier. Your brother should also keep records showing he received his portion of the income from you. One thing that helped us was setting up automatic monthly transfers from our individual accounts to the joint account on the same day each month. This creates a clear paper trail of the 65/35 split you mentioned, which makes the tax reporting more straightforward if anyone ever questions it.

This is such a common situation that catches families off guard! I dealt with something similar when my mom and I set up a joint account for my grandmother's care expenses. One thing I learned the hard way is that you should also check with your financial advisor about whether they can help facilitate some of this reporting. Some advisors will actually provide detailed breakdowns of income attribution if you give them your contribution percentages upfront. Since your brother's advisor is managing the account, they might be able to generate reports that make the tax calculations much easier. Also, don't forget about the state tax implications if you're in different states! I had to deal with that wrinkle too since my mom lives in Florida (no state income tax) while I'm in California. The nominee distributions can affect state returns differently depending on where each person files. The good news is that once you get a system in place for tracking and reporting, it becomes pretty routine each year. The first year is definitely the most confusing, but it gets easier once you understand the process.