That's really helpful to know for next year. Do you need to file anything special to request the extension or is it just a simple form? And does getting this extension for the business return also give you more time for your personal return?

Filing for the extension is very straightforward - Form 7004 is a simple one-page form that you can e-file. You don't even need to provide a reason for needing the extension. The S-Corp extension does not automatically extend your personal return though. Those are separate filings with different deadlines. You'd need to file Form 4868 to extend your personal 1040 if needed. But having the business extension gives you more time to get the K-1 properly prepared, which makes your personal return more accurate when you do file it.

I learned this the hard way! My first year with an S-Corp I only took distributions because I thought that was the advantage. Got a nasty letter from the IRS later. Now I use Gusto for payroll and it makes the whole process super simple.

That's a fair point I hadn't considered. They mentioned they'd "already issued too many W-9s" this year, but I'm not sure what that really means from a tax perspective. Is there some limit to how many W-9s someone can issue in a year? Or are they trying to keep their reported income under some threshold?

There's no limit to how many W-9s someone can issue - that excuse doesn't make any sense. A W-9 is just a form that collects your tax ID information so someone can properly report payments made to you. What they might be concerned about is total reported income. If they're receiving certain benefits (healthcare subsidies, income-based loan repayments, etc.) or if they're close to a higher tax bracket, they might be trying to keep additional income off their returns. Another possibility is they're collecting unemployment or other benefits that would be reduced if they report more income.

But how would that work if they're being paid by a single client? Would the client have to cut separate checks to each partner? My band runs into this issue with gigs sometimes.

Thanks for the reminder! Do you think it's better to slightly overpay each quarter to be safe? And is there any penalty for overpaying?

I do think it's better to slightly overpay - I usually aim for about 5-10% over what I calculate. There's no penalty for overpaying, and you'll just get the excess back as part of your refund when you file. The only "downside" is that you're essentially giving the government an interest-free loan, but for me, the peace of mind is worth it. I've also found it helpful to set aside a consistent percentage of all income rather than trying to calculate exact amounts. For instance, I put away 30% of all payments I receive into a separate savings account designated just for taxes, then make my quarterly payments from there.

Most tax software doesn't handle penalty abatement requests very well. I tried using TurboTax for this last year and ended up having to call the IRS directly anyway. The software is great for filing but not so much for post-filing issues like penalties.

That's really helpful info about the exchange rates - I hadn't even thought about that aspect. Do you know if I need documentation of the exchange rate on the date of death? And would a printout from an exchange rate website be sufficient, or does it need to be more official?

You definitely need documentation of the exchange rate on the date of death. The IRS typically accepts historical exchange rates from reputable sources. I used the Treasury Department's published rates (available on their website), which my accountant said was the safest choice. However, printouts from established financial sites like XE.com or OANDA are generally acceptable too. Just make sure you keep copies of whatever documentation you use - I learned the hard way that you might need to reference this information years later, especially if you inherited property that you're now selling. Having that documented exchange rate from the date of death is crucial for calculating your stepped-up basis correctly.

I went through this nightmare last year. Both probate processes happen independently - neither takes "precedence" exactly. But they do need to be coordinated. The UK probate (grant of probate) must be completed before UK assets can be distributed. Same with US probate for US assets. The complication comes with taxation. We ended up needing to get a foreign tax credit to avoid double taxation on some assets. My suggestion? Find ONE attorney who understands both systems - having two separate lawyers in different countries led to tons of confusion in my case.

Do they have the 2023 forms available still? And would they calculate if that forwarded refund from 2022 applies correctly? Thanks for this suggestion!

Yes, they definitely still have the 2023 forms available! Tax preparation websites typically keep forms for several years back for exactly this kind of situation. As for the forwarded refund from 2022, you'll need to enter that as a payment already made on your 2023 return. Most tax software has a section specifically for "payments and credits from prior years" or something similar. It should then calculate everything correctly, taking that forwarded amount into account when determining if you're owed a refund or still owe additional tax for 2023.

Totally agree! I did the same thing years ago and ended up with notices from the IRS for the next two years trying to straighten everything out. Just do each year separately and clearly mark the tax year on each return.