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.

That's really important to know - I hadn't considered the long-term compliance requirements. If the OIC is accepted, I'll definitely need to set up a system to help him stay on track with quarterly payments. Maybe setting up automatic transfers to a tax savings account? Would monthly estimated payments be allowed instead of quarterly to make it more manageable?

Monthly payments towards quarterly tax obligations are definitely doable and often more manageable for people with executive functioning challenges. I recommend setting up an automatic transfer to a separate "tax account" on a monthly basis. The IRS just wants their quarterly payments received on time - they don't care how you save for them. Another approach that helps many of my clients is having a tax professional set up automatic reminders and check-ins. The most important thing is creating a system that doesn't rely on memory or executive function. Payment plans with automatic drafts can also be very helpful if needed in the future.

This is a great point. When I submitted my OIC, the IRS initially rejected it because they calculated "imputed income" for my housing situation since I was staying with family. I had to resubmit with documentation showing the arrangement was temporary due to financial hardship.

Thank you for pointing this out! He actually does help care for our parents occasionally, so I'll make sure to document that as part of the living arrangement. He doesn't currently receive any assistance programs but may qualify for some based on income. Would applying for those programs before submitting the OIC be beneficial? Or would that potentially complicate matters?

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?

How do you know if your plan allows this? Is it something I need to ask HR about specifically? I've never seen "after-tax contributions" as an option in either of my employer's benefit portals.

You need to ask your HR department or plan administrator specifically about "after-tax contributions" (not Roth contributions, which are different). Many employers don't advertise this feature even when they have it. You'll also want to ask if they allow in-plan Roth conversions or in-service withdrawals of these after-tax contributions. Not all 401k plans offer this option - it's more common with larger employers. If either of your plans does allow it, it's a powerful way to get more money into tax-advantaged accounts beyond the standard limits.

Is there an easy way to track this? My contributions are percentage-based, not dollar-based, so it's hard to calculate the exact amount going in each month, especially with bonuses.