The bonus withholding issue is super common! One thing nobody has mentioned yet is that you can actually ask your employer to withhold at a higher rate specifically for the bonus. Most payroll systems allow your employer to withhold at a different rate for supplemental wages (like bonuses) versus regular wages. You might want to talk to your HR or payroll department about withholding 25% or even 30% on that bonus instead of the standard 22% if you're worried about owing. I had my company do this for my annual bonus last year and it was the first time I didn't get hit with a tax bill in April!

Something else that might be happening - check if your employer is properly withholding for Social Security and Medicare (FICA taxes). I just went through this myself. My employer was withholding correctly for federal income tax but wasn't taking out enough for FICA. I didn't notice until I did my taxes and saw I owed a bunch. Apparently there was some setting in their payroll system that was calculating it wrong for my specific situation. Might be worth double-checking your paystubs to make sure everything looks right across all tax types, not just federal income tax!

Don't overlook a Health Savings Account (HSA) if you opt for a high-deductible health plan! I'm a solo attorney with an S-Corp and this has been a game changer for me. For 2025, you can contribute up to $4,150 for individual coverage or $8,300 for family coverage. The triple tax advantage is amazing - contributions are pre-tax, growth is tax-free, and qualified withdrawals are tax-free. I've been maxing mine out every year and using it as another retirement vehicle (you can invest the funds just like a retirement account).

One more thing to consider - since you're both employer and employee, you can set up a Section 125 Cafeteria Plan to pay for things like dental, vision, dependent care, etc. with pre-tax dollars. Your S-Corp should also be taking the home office deduction if you work from home at all.

Former tax accountant here - one thing nobody mentioned yet about IRC Sec. 1377 elections is that sometimes neither option is clearly better for everyone. It really depends on: 1) When income was recognized during the year 2) When expenses were recognized 3) If there were any unusual transactions (asset sales, etc.) 4) What your personal tax situation is like In some cases, the remaining shareholders might want the election because the business lost money after you left (so they don't want to share those losses with you). In other cases, they might have had big gains after you left (so they don't want to allocate those to you). I'd demand to see month-by-month P&L statements at minimum before signing anything.

I had an issue with the IRC Sec. 1377 election last year and the remaining owners tried to pull a fast one on me. The key is to ask for the MONTHLY breakdown of: - Gross revenue - Major expenses - Any significant assets purchased/sold - Any debt taken on or paid off In my case, they were pushing hard for me to sign because they had major expenses coming in Q3/Q4 that would offset the income from earlier in the year. Without the election, I would have shared in those expense deductions. With it, they'd get all the deduction benefit.

Have you considered keeping it as a rental property and using a property management company? I was in a similar situation and found that continuing to rent while letting a management company handle everything was actually more profitable long-term than selling, especially with property values trending upward in most markets.

Just want to add that timing of the sale matters too. If your property has appreciated significantly, consider the impact of the sale on your overall income for the year. If the capital gains push you into a higher tax bracket, it might be worth delaying the sale to the following tax year if your income will be lower then.

Just a heads up that if your father's home was his primary residence, you might qualify for additional relief. The IRS sometimes shows extra flexibility with primary residences in OICs, even if they're in poor condition. Make sure to emphasize this in your documentation. Also, did your father have any medical issues related to his addiction? If you can document that his failure to file was connected to medical problems, there might be additional penalty abatement options available to the estate. This could potentially reduce the total amount owed before you even get to the OIC stage.

Has anyone mentioned the application fee for an OIC? It's $205 unless you qualify for the low-income certification. For an estate, I think the qualification is based on the estate's assets, not your personal income. Also remember you'll need to submit an initial payment with your offer - typically 20% of the offer amount if you're doing a lump sum payment option.