Thanks for all the detailed discussion here! As someone who's been going back and forth between desktop and online filing for years, this really clarifies things. The key insight about data persistence vs. transmission risk is super helpful. One thing I'd add - if you do go the desktop route, make sure you're downloading the software directly from the official company website. I've seen people accidentally download fake tax software from sketchy sites, which is probably worse than any legitimate online service security-wise. Also worth noting that some desktop versions now automatically back up your files to the cloud anyway, so you might want to check those settings if local-only storage is your goal.

This is such a timely discussion! I've been using TurboTax online for the past few years without really thinking about the security implications. After reading through all these insights, I'm seriously considering switching to desktop software for next year's filing. The point about data persistence vs. temporary transmission really resonates with me. I had no idea that desktop software only sends data temporarily during e-filing while online versions keep everything stored on their servers. That's a significant difference I never considered. I'm also intrigued by some of the tools mentioned here like taxr.ai for analyzing security practices. Has anyone else tried similar services to evaluate their tax software's security? I'd love to hear more experiences before making the switch. One question for the cybersecurity expert who commented - do you think the security landscape for tax software will change significantly in the coming years, or are we likely to see the same basic tradeoffs between convenience and data control?

Something important to add here - make sure the work is AGE APPROPRIATE!!! I got audited because I claimed my 12yo was doing "consulting" for my business. The IRS agent basically laughed at the idea a 12yo could provide consulting services. Stick to tasks that make sense for their age like filing, cleaning, simple computer work, etc.

Quick tip from someone who's been doing this for years: open a Roth IRA for your kids with their earned income! Since they likely won't owe taxes on the income (if under the standard deduction), they're essentially getting tax-free money going in AND tax-free growth and withdrawal later. It's one of the best financial head starts you can give them.

I've been dealing with S-Corp revocation delays myself and wanted to share a resource that might help. The IRS Taxpayer Advocate Service (TAS) can intervene in cases where you've experienced significant hardship due to IRS processing delays. Given that your client has been waiting since June 2023 with no meaningful response until recently, this could qualify for TAS assistance. You can submit Form 911 (Request for Taxpayer Advocate Service Assistance) to initiate the process. TAS has the authority to expedite processing and can sometimes secure retroactive relief that might be difficult to obtain through normal channels. They're particularly effective when there's been a clear breakdown in IRS communication or processing, which seems to be the case here. The key advantage is that TAS works directly with IRS departments to resolve issues and can often cut through bureaucratic delays. Since your client operated consistently as a C-Corp based on their reasonable belief that the revocation was effective, this strengthens your case for TAS intervention. I've seen them successfully resolve similar S-Corp election issues in 60-90 days when the normal process was stalled for years.

This thread has been incredibly helpful - thank you all for sharing your experiences and strategies! I'm dealing with a similar S-Corp revocation delay situation with one of my clients, and seeing the different approaches people have taken gives me much more confidence in how to proceed. Based on what I'm reading here, it sounds like the combination approach might be most effective: filing a detailed reasonable cause request with Form 1120 for the affected years, while simultaneously pursuing TAS intervention through Form 911. The key seems to be documenting everything thoroughly and emphasizing both the client's good faith reliance on the original submission and the IRS's processing failure. One thing I'm curious about - for those who successfully obtained retroactive relief, how detailed did you get in documenting that your clients weren't operating as S-Corps during the delay period? I'm thinking specifically about things like board resolutions, meeting minutes, or other corporate governance documents that might support the narrative that they genuinely believed the revocation was effective. Also, has anyone had success with including a timeline document that clearly shows the sequence of events and IRS response delays? It seems like creating a clear chronology might help the reviewing agent understand just how unreasonable the processing delays were.

I've helped several family members navigate this exact situation. The key thing to understand is that IRS refund checks are Treasury checks, which have much stricter handling rules than regular personal or business checks. Your best bet is definitely the Walmart route - $8 to cash a government check is incredibly reasonable, and they're experienced with tax refunds so there shouldn't be any hassles as long as your mom has valid ID. If she's concerned about carrying cash, she could also ask them to load it onto a prepaid card right there. Many Walmart locations can do this on the spot. The "pay to the order of" endorsement technically violates Treasury check rules and could get both of you flagged, even if some people have gotten away with it. It's just not worth the risk when there are legitimate alternatives available. One other option - if your mom is open to it, she could call the IRS and request that future refunds be issued as direct deposit to a prepaid card account. Many prepaid cards now offer routing/account numbers that work with government payments.

I went through this exact situation with my elderly father last year. After researching all the options, here's what worked best for us: We ended up going the Walmart route - $8 fee to cash his $3,200 refund check, and they loaded it directly onto a MoneyCard for him. The whole process took about 10 minutes, and he felt much safer having it on a card rather than carrying that much cash. What really helped was calling ahead to confirm the specific Walmart location offered both check cashing AND the card loading service - not all locations do the card loading, so it's worth verifying first. The other thing that surprised me was how easy it was to set up direct deposit for his next year's refund using the MoneyCard's routing and account numbers. We called the IRS (took forever to get through, but it was worth it) and updated his payment info so this won't be an issue again. One tip: bring two forms of ID to Walmart. They're pretty strict about it for government checks, but once you have everything they need, the process is smooth. Way better than the $75 fee the local check cashing place wanted!

I've been following this discussion closely since I'm dealing with a similar pension plan termination at my company. One aspect that hasn't been fully explored is the impact of state taxes on your decision. Since you mentioned HR was vague about the penalty, I'd suggest getting the specific plan document language about early distribution penalties. Sometimes pension plans have slightly different rules than traditional 401k plans, especially around plan terminations. The "involuntary distribution due to plan termination" might have different treatment than a voluntary early withdrawal. Also, consider your overall tax situation for this year. If you've had other major income events (like selling investments, receiving bonuses, etc.), adding $18,500 in taxable income could push you into a higher bracket, making the rollover even more attractive. Conversely, if this has been a lower-income year for you, the tax hit might not be as severe. Have you considered splitting the difference? Some plans allow you to take a smaller amount as cash (maybe $5,000 for any immediate needs) and roll the remainder ($13,500) into an IRA. This gives you some liquidity while preserving most of the tax-advantaged growth potential.

I'm facing a very similar situation and this thread has been incredibly helpful! One thing I wanted to add that might be relevant - have you checked if your pension plan has any special provisions for "hardship distributions" that might avoid the 10% penalty? Some defined benefit plans include hardship exceptions that are broader than the standard IRA/401k rules, especially during plan terminations. These might include things like unexpected medical expenses, home repairs, or even job loss-related expenses that wouldn't normally qualify for penalty relief. Also, regarding the timing question that came up earlier - if your company is doing layoffs or offering voluntary separation packages alongside the pension termination, you might want to coordinate the timing of these events. Sometimes taking a separation package in the same tax year as the pension distribution can create additional deductions that help offset the tax impact. I'd definitely echo what others have said about getting the actual plan documents rather than relying on HR summaries. In my experience, HR departments often don't fully understand the tax implications and focus more on the administrative process. The plan administrator or the company that's handling the termination usually has much more detailed knowledge about the specific tax treatment and available options.