Just wanted to add - if your client is planning this specifically for the 100% gain exclusion under 1202, make sure to verify the acquisition date requirements. Stock needs to be acquired after Sept 27, 2010 and held for 5+ years. Also be careful with redemptions under 1202(c)(3) - if there are redemptions from the corp around the time of the new stock issuance, it could disqualify the QSBS status. This often gets overlooked in reorganizations.

This is a really complex QSBS situation that requires careful planning. One additional consideration I haven't seen mentioned yet is the working capital safe harbor under 1202(e)(6). When you're contributing assets from the 3 C Corps to the new corporation, you'll want to ensure that any cash or investment assets don't push you over the limits for qualifying as an active business. The safe harbor allows reasonable amounts of working capital, but "reasonable" is based on the business needs and plans of the company. If the C Corps are contributing significant cash along with equipment, you might need to document specific business plans for how that working capital will be used in the active business within 2 years. Also, regarding the LLC conversion timing - make sure you're structuring this so the converted C Corp is the one receiving the contributed assets, not doing the contributions first and then converting. The order of operations could affect whether the resulting stock qualifies under Rev Rul 84-111. Have you considered getting a private letter ruling for this structure? Given the complexity and the multiple moving parts, it might be worth the cost and time to get IRS blessing upfront rather than risking an audit challenge later.

The whole "cash the check elsewhere" thing comes from people trying to avoid bank levies or garnishments, not taxes. Like if you owe child support and they're garnishing your bank account, some people cash checks instead of depositing them. It still doesn't avoid the obligation, just makes it harder to collect. For tax purposes, income is income regardless of how you receive it or what you do with it after. Heck, even illegal income is technically supposed to be reported on taxes (though most drug dealers don't file Schedule C's lol).

This is a great question that a lot of freelancers wonder about! The bottom line is that cashing checks at the issuing bank versus depositing them in your own account makes absolutely no difference for tax purposes. The IRS tracks income based on who paid you and why, not how you converted the check to cash. Here's what actually matters: if you're doing legitimate freelance work and getting paid over $600 from any single client during the year, they're required to send you a 1099-NEC and report that payment to the IRS. Even if no 1099 is issued (for payments under $600), you're still legally required to report ALL income on your tax return. The good news is that as a freelancer, you can deduct legitimate business expenses like equipment, supplies, home office space, etc. to reduce your taxable income. I'd recommend setting aside 25-30% of each payment for taxes and keeping detailed records of your income and expenses. Don't risk tax evasion charges by trying to hide income - it's just not worth it when there are legal ways to minimize your tax burden through proper deductions and planning.

So what's the consensus on whose name to put the 529 in? I'm still confused after reading all these comments...

Great question! I went through this same decision last year when setting up 529s for my two kids. After consulting with our tax preparer and doing research, we went with parent-owned accounts with each child as beneficiary. The key factors that made this the right choice for us: - We keep full control over the funds (can change beneficiaries between siblings if needed) - Better financial aid treatment compared to child-owned assets - Still get our state's tax deduction for contributions - Much simpler than trust ownership One thing I'd add that hasn't been mentioned - check if your state offers additional benefits for using your own state's 529 plan versus an out-of-state plan. Some states only give tax deductions if you use their specific plan, while others are more flexible. Also worth noting: you can always change the beneficiary later if circumstances change, which gives you flexibility as your daughter grows up and you see how her educational path unfolds.

Somethng else to consider - you should look into FSA options too. If your plan offers an FSA and his offers an HSA, you can actually use both in the same year (with some limitations). might give you more tax-free dollars for medical stuff especially with a pregnacy coming!

Great question! I went through this exact situation when my wife and I got married. The key thing to remember is that HSA eligibility for spouse expenses is tied to your tax filing status, not your insurance coverage. Since you're keeping separate employer plans, your husband can absolutely use his HSA funds for your pregnancy and birth expenses - but only if you file your taxes as married filing jointly. Here's what I learned: if you file jointly, the IRS treats HSA funds as available for qualified medical expenses for both spouses, regardless of who has which insurance plan. But if you file separately, each person's HSA can only cover their own expenses. For your specific situation with potential pregnancy costs, I'd strongly recommend running the numbers on both filing scenarios before you need to use the HSA funds. Most couples save more money filing jointly anyway, especially when you factor in the HSA benefits. Just make sure you're confident about your filing choice before using his HSA for your medical expenses, because if you change your mind and file separately later, those distributions would be considered non-qualified and subject to taxes plus penalties. The separate insurance plans won't be an issue at all - it's really just about that tax filing status decision.

Just a heads up - everyone is suggesting adding deductions on line 4(b), but remember these should be ACTUAL deductions you qualify for beyond the standard deduction, like mortgage interest, large charitable contributions, etc. If you're just claiming the standard deduction, technically you should be using line 4(c) instead by putting a NEGATIVE number for additional withholding. But honestly, most payroll systems don't accept negative numbers there. This is why so many people with variable income end up using line 4(b) as a workaround, even though it's not technically the correct approach according to IRS instructions. Just be aware this is a gray area.

I've been dealing with this exact same issue! Variable income withholding is such a pain. One thing that really helped me was keeping a simple spreadsheet tracking my actual withholding percentage vs. my gross pay each week. I noticed my withholding would spike to like 35%+ on weeks where I worked 60+ hours, but drop to around 15% on my lighter weeks. What I ended up doing was calculating my expected annual income (sounds like you're thinking $85k), then figuring out what my actual tax liability should be. For $85k single with standard deduction, you're looking at roughly $14,500 in federal taxes for the year. I put about $18,000 in additional deductions on line 4(b) of my W4, which brought my withholding down to a more reasonable 20-22% range even on the big weeks. The key is monitoring it every few months and adjusting if needed. Also, don't stress too much about being "perfectly" accurate - as long as you're close and not massively underwithholding, you can always adjust throughout the year. The worst case is you owe a small amount at tax time, which beats giving the IRS an interest-free loan!