Thanks for the tip about Form 9465. Is that something I'd need to submit now, or when I actually file my taxes next year? And how long does it typically take for the IRS to approve an installment plan?

You'll submit Form 9465 when you file your tax return, so you don't need to worry about it until tax time next year (unless you're filing for a previous year). You can actually include it right with your tax return, which is the easiest approach. The IRS is pretty quick with streamlined installment agreements. If you owe less than $10,000, request a reasonable monthly payment, and have filed all required tax returns, approval is usually automatic and happens within about 30 days. If you apply online through the IRS website after filing, it can sometimes be approved immediately. Just make sure when you file that you still pay as much as you can upfront - this reduces the amount subject to penalties and interest. Every dollar you can pay when filing saves you money in the long run!

Good point! Oregon has pretty high state income taxes too. OP mentioned being in Washington, which doesn't have state income tax, but if they worked in OR at all or live near the border and work in OR, they could definitely have state tax obligations.

How do you determine what percentage is "reasonable"? Is there a specific formula the IRS uses or is it more of a judgment call?

There's no specific formula or percentage the IRS mandates - it's more of a facts and circumstances test. The IRS looks at factors like your qualifications, duties, time spent in the business, what comparable positions pay in your industry and region, and the financial performance of your business. For some businesses, a 50/50 split might be perfectly reasonable, while in others (especially service businesses where the owner's expertise is the primary value), the salary portion should be higher. I recommend researching salary data for your position in your area using resources like the Bureau of Labor Statistics or industry compensation surveys to support whatever split you choose.

I've used both. Gusto is MUCH more user-friendly for S-Corp payroll specifically. They have an owner setup wizard that walks you through things like reasonable compensation documentation. QuickBooks is more robust for overall accounting but their payroll can be confusing for S-Corp owner-employees. Gusto also automatically handles all the special forms for paying yourself as an S-Corp owner.

11 Do you need to be a student at the college to attend these workshops? I've never thought about checking community colleges for this type of resource.

21 Nope! The small business workshops are open to the community, not just students. That's what makes them such a great resource. They're funded through the college's community education program and some small business grants. Check your local college's "Community Education" or "Continuing Education" section on their website. If they don't have anything listed, also try your local Small Business Development Center (SBDC) which offers similar free workshops.

13 This is such good advice! I used to just toss receipts in a shoebox and it was a disaster come tax time. Is there a specific app you recommend for tracking all this stuff?

Do you have a source for that $5-6 return on investment figure? I'm not doubting you, just would like to read more about it since that's a compelling argument against budget cuts.

The Treasury Department's own analysis from 2021 estimated that every additional dollar invested in tax enforcement yields at least $5 in revenue. More recent studies suggest the return could be even higher for certain enforcement activities targeting high-income individuals and large corporations. For comparison, the Congressional Budget Office (CBO) has historically used more conservative estimates of a 3:1 to 5:1 return ratio, but even at the low end, that's still a 300% return on investment. There's a good article in the Journal of Tax Policy from last quarter that breaks down different enforcement activities and their respective ROIs. The highest returns come from audits of high-income individuals with business income and large corporations with international operations.

It's political theater. Politicians know attacking the IRS plays well with their base, regardless of the practical impacts. There's decades of anti-government rhetoric that's made "IRS" a four-letter word to many voters. Plus, powerful donors benefit from a weakened tax enforcement system.

Does this work for accounts that hold REITs? Those distributions are especially complicated with return of capital, etc. I'm struggling with exactly this issue right now for an estate I'm administering.

Yes, it actually works quite well for REITs, which are one of the most complicated assets for estate fiscal year accounting. The brokerage's tax center will typically show the breakdown of REIT distributions into ordinary income, qualified dividends, capital gain distributions, and return of capital. For the fiscal portion where you don't yet have the official breakdown, many brokerages will let you see the preliminary classification based on what the REIT has announced. REITs are required to announce their dividend tax classifications, even though the official 1099 comes later. If you can't find this in your brokerage's system, you can often go directly to the investor relations section of the REIT's website and find their dividend tax classification announcements.

Is that really true? I thought you always use the form for the year in which the fiscal year ends. So for a Aug 2022-July 2023 fiscal year, wouldn't you use the 2023 forms since that's when the fiscal year ends?