Thanks for the QuickBooks tips! One question - for the 1099 vendors, some of them were added years ago and I'm not sure we ever got proper W-9s. What's the best way to handle that this late in the year when I need to issue them in just a few weeks?

For those vendors without W-9s, send them the form immediately with a deadline of 7 days for return. Most vendors are used to this process and will respond quickly. You can email them the form with a clear subject line mentioning the urgent tax deadline. If any vendors don't respond, you'll still need to issue their 1099-NECs by the deadline, but you might have to do so with incomplete information. In that case, use whatever information you have on file, but be aware that you may need to issue corrected forms later. The IRS can penalize for missing or incorrect TINs, so document your good-faith efforts to obtain this information by keeping records of your requests.

How do you determine what a "reasonable" salary is though? I've heard different things from different accountants. Is there some kind of formula or percentage of profits?

That's super helpful context from someone in the same industry! Can I ask how you handled the reasonable salary requirement for S-corps? I've heard the IRS scrutinizes brewery owners who take too little salary to avoid payroll taxes.

Great question! For breweries, this is indeed tricky. We looked at what comparable positions would earn in our area (head brewer, operations manager, etc.) and set salaries accordingly. For the first two years, our salaries were about 50-60% of our total compensation, with the rest as distributions. The IRS does look closely at this industry, so we documented our salary-setting process carefully. We also made sure our salaries increased as the business grew more profitable. Having documentation that shows your salary determination wasn't arbitrary is key if you ever get questioned. Our accountant had us keep notes from our meetings where we discussed compensation and market rates.

This is SO important. We opened our brewery in Massachusetts and totally got blindsided by state-specific requirements. Would have saved a bunch of headaches and money if we'd considered state tax implications from the beginning.

Do you know how much it typically costs to file an amended return if you use a tax preparer? I'm in a similar boat but with a $120 discrepancy and wondering if it's worth paying someone to fix it.

Most tax preparers charge between $75-150 to file an amended return, even for something simple like this. This is why many people choose not to amend for very small amounts - the preparation fee often exceeds the tax difference. If you're comfortable doing it yourself, you can file a 1040-X for free. It's not extremely complicated for a simple W2 correction. You'd just need to fill out the form showing the original amounts, the corrected amounts, and the difference, then provide a brief explanation like "Received W2c from employer with wage adjustment.

Yes, your employer sends the corrected W2c to the Social Security Administration, which then shares the info with the IRS. So the IRS will eventually have both sets of numbers. This is actually why small discrepancies like this sometimes get flagged in their automated system - their records won't match what you filed.

You can request copies of your wage and income transcripts from the IRS for free. Go to IRS.gov and search for "Get Transcript Online" or call their transcript request line at 800-908-9946. This will give you all the info reported to the IRS like your W-2s and 1099s for 2021. For bank statements and other documents, contact those institutions directly for replacements.

Unfortunately, you can't claim Hurricane Helene disaster losses on your 2021 return since the disaster occurred in 2024. Casualty losses must be claimed for the tax year in which they occurred. You'll need to claim Helene-related losses on your 2024 tax return (which you'll file in 2025) or potentially on an amended 2023 return if you choose to claim the loss in the immediately preceding year, which is sometimes allowed for federally declared disasters. But for your 2021 return that you're filing now, you can only claim the extension - not any hurricane-related losses.

Thanks for clarifying that! Makes sense that I can't claim 2024 losses on a 2021 return. I'll focus on just getting the 2021 return filed with the extension for now and deal with the hurricane losses on my 2024 taxes next year.

This is incorrect advice. Once they formed the S-Corp, they need to file as an S-Corp. The startup costs would be claimed on the S-Corp return, not their personal return directly. The S-Corp loss then flows through to their personal return via the K-1. If they had incurred the expenses before forming the business entity, your advice might apply, but not in this case.