Do they handle both the 5498-SA and 1099-SA forms? I have both because I contributed to my HSA and took distributions in the same year.

Yes, they handle both forms. The 5498-SA (which shows your contributions) and the 1099-SA (which shows distributions) are both covered in their free federal filing. They use Form 8889 to reconcile everything related to your HSA. You'll see a specific section for HSA accounts where you can enter both your contributions and distributions. Just make sure you have your 1099-SA handy to enter the distribution amount and the correct box number (usually Box 1 shows total distributions, and Box 2 shows earnings on excess contributions if applicable).

Ouch! Did you have to pay a lot? I'm paranoid about this because I used my HSA card at a pharmacy where I bought both prescription meds and some other non-medical stuff on the same transaction.

Does this apply even if you use one of those tax relief companies that advertise on radio? They always claim they can settle for "pennies on the dollar" but I assume that's just marketing hype?

Those "pennies on the dollar" claims are extremely misleading. What those companies are referring to is the IRS Offer in Compromise program, which is only available in very specific hardship situations where you genuinely cannot pay your tax debt. You have to prove significant financial hardship, and most people who apply get rejected. Those companies charge thousands in fees for something you can do yourself, and they often make promises they can't keep. They can't get any better deal from the IRS than you can get yourself. And yes, even with an accepted Offer in Compromise, the IRS will still apply interest to your original tax debt before determining your settlement amount.

Did you have to fill out any special forms for the penalty abatement? Or was it just handled over the phone?

Good point! In NY we have that stupid S-corp franchise tax that adds up. What's the California situation like?

In California, S-corporations pay a 1.5% tax on net income with a minimum tax of $800, while C-corporations pay a flat 8.84% tax rate. For larger businesses with significant profits, this difference can be substantial - though you need to factor in the additional personal income tax on passed-through S-corp profits. The analysis really depends on how much profit you're retaining in the business versus distributing to shareholders. In my experience, the math favors S-corps for businesses with high distribution rates but can swing toward C-corps when reinvesting heavily.

Our accountant mentioned this too! Also something about being able to establish a medical reimbursement plan as a C-corp that you cant do with an S? Not 100% on the details tho.

For donor-advised funds, is there a minimum amount that makes sense to start with? And do you recommend any particular providers?

Most major investment firms like Fidelity, Vanguard, and Schwab offer donor-advised funds with minimums around $5,000 to open and $500-1,000 for additional contributions. I personally use Fidelity Charitable because their platform is user-friendly and their fees are reasonable. The amount that "makes sense" depends on your tax situation, but generally, it's most beneficial when you're bunching multiple years of charitable contributions into a single tax year to exceed the standard deduction threshold. For someone at your income level, contributing $10,000+ would typically provide meaningful tax benefits, especially if you're already itemizing deductions.

I'm a physician who went the real estate route. The tax benefits are real - depreciation, mortgage interest, and expense deductions. But be cautious about passive losses - at your income level, you may not be able to deduct those against your W2 income unless you qualify as a real estate professional (which is tough with a full-time medical career). Consider syndications or REITs if you want the benefits without active management. Just do your due diligence - there are many questionable deals out there.

Thanks for the insight! I was worried about the time commitment. REITs sound more my speed since I barely have time for hobbies as it is. Any particular types of REITs you'd recommend looking into first?

I use a fillable PDF that they can complete digitally. It's set up so they can't submit it if required questions are unanswered. I also color-code sections based on complexity - green for simple questions, yellow for ones that might need thought, and red for complex items we'll definitely discuss during our meeting. The pre-filled approach for returning clients has been the biggest time-saver. I just send last year's completed form and say "please review and note any changes for this year" - gets much better response rates than starting from scratch each time.

Do you have them complete it digitally or on paper?

We've incorporated key Schedule B items into our engagement letters for partnerships. We specifically include language about foreign activities, ownership, and listed transactions. It doesn't replace getting the specific answers, but it does create another layer of documentation and client awareness.