Great question about Schedule L! You're absolutely right that the cash increase of $57,000 goes on the asset side. For the equity side, here's how it breaks down: The $135,000 business income increases Retained Earnings, but then you have two reductions: - The $52,000 officer salary is already accounted for as an expense (reducing the net income that flows to RE) - The $26,000 distribution directly reduces Retained Earnings So your net increase to Retained Earnings should be $57,000 ($135,000 income - $52,000 salary - $26,000 distribution). One tip: Make sure your beginning and ending retained earnings on Schedule L tie to your prior year return and current year activity. The IRS computers automatically check these relationships, so any discrepancies can trigger correspondence. Also, don't forget that the $26,000 distribution reduces the shareholder's stock basis on their personal records, which will be important for future years' tax planning and any potential loss limitations.

As someone who's been preparing S-Corp returns for several years, I wanted to add a practical tip that might help with your Schedule L balancing act. When you're working through the equity side of Schedule L, it's helpful to think of it in terms of "what happened to the company's money." Your business earned $135,000, but $52,000 went to pay the officer (which reduces the earnings available to retain), and $26,000 was distributed to the shareholder. That leaves $57,000 that stayed in the company - hence the increase to Retained Earnings. One thing I always double-check is making sure the K-1 ordinary income ties back to the 1120-S net income after all deductions (including that officer compensation). In your case, the K-1 Line 1 should show $83,000 ($135,000 - $52,000) assuming no other deductions. Also, keep detailed documentation of that $52,000 officer salary justification. The IRS has been increasingly aggressive about challenging "unreasonable compensation" in S-Corps, especially when distributions are involved. Document the officer's duties, hours worked, industry salary surveys, and any other factors that support the reasonableness of the compensation amount. Good luck with your first 1120-S - it gets easier once you understand how all the pieces fit together!

I've been in your exact situation before, and I know how incredibly stressful it is! The combination of filing late, owing money, and not being able to reach your preparer is a perfect storm of anxiety. Here's what I learned from my experience: the 10-day timeframe you mentioned is actually still within normal processing windows, especially for prior year returns. The IRS systems can take 3-6 weeks to show late filings in your online account or transcripts, so the fact that you can't see it yet isn't necessarily a red flag by itself. However, the lack of communication from your preparer definitely is concerning. When I went through this, my preparer was responsive and proactive about keeping me updated on the status. Before you panic, here's what I'd recommend: 1. Check your bank account for any pending/scheduled transactions - sometimes the payment is scheduled for a future date rather than processed immediately 2. Look through any paperwork they gave you for an IRS Form 8879 (e-file authorization) - if you signed this, it's a good sign they intended to file electronically 3. Visit their office in person tomorrow and ask specifically for the IRS e-file acknowledgment with confirmation number If they filed electronically, they should have received an acknowledgment from the IRS within 24-48 hours. Any legitimate preparer keeps this document and should provide it immediately when requested. Don't let them give you vague answers about "it's in the system" - you need to see that specific confirmation document. If they can't produce it, you'll know you need to file yourself immediately to minimize additional penalties. Stay strong - even if the worst case happens and they never filed, you can still get this resolved!

I completely understand your anxiety about this situation! As someone who works in tax preparation, I can tell you that the 10-day timeframe without seeing anything in the IRS system is actually still normal, especially for prior year returns like your 2022 filing. However, the lack of communication from your preparer is definitely concerning. Here's what you should know: **Immediate steps to take:** 1. Visit their office in person tomorrow - don't just call or text 2. Ask specifically for the IRS e-file acknowledgment with confirmation number (they get this within 24-48 hours of successful filing) 3. Request a complete copy of your filed return and Form 8879 (e-file authorization) 4. Get documentation of your payment arrangement **What to look for in your bank account:** Check for pending or scheduled electronic fund withdrawals (EFW), not just completed transactions. Many preparers schedule the payment for a specific future date rather than processing it immediately. **Red flags vs. green flags:** 🚩 Red flags: Can't produce IRS acknowledgment, seem disorganized, make excuses about "system issues" ✅ Green flags: Can immediately show you the confirmation number, have organized files, provide complete documentation The fact that you have a signed Form 8879 is actually a good sign - this suggests they intended to file electronically. But you still need to see that IRS acknowledgment to confirm it actually went through. Don't feel bad about demanding documentation - you paid for a service and deserve proof it was completed. If they can't provide the acknowledgment, you'll know you need to file yourself immediately to stop additional penalties from accruing. Keep us updated on what happens! Your situation could help others dealing with similar concerns.

Has anyone used their passive losses when refinancing a property? My CPA mentioned something about this but wasn't very clear and I'm wondering if it's even possible.

One thing to keep in mind about passive loss carryovers is that they're tracked separately for each passive activity. So if you have two rental properties, the suspended losses from Property A can only be released when you dispose of Property A - you can't use them when you sell Property B. This is important for planning purposes if you're thinking about which property to sell first. Also, since you mentioned your income is over $150k, you might want to consider the timing of any property sales. If you have a year where your income drops (maybe due to retirement, job change, or large business deductions), that could be an optimal time to sell and realize those passive losses against your regular income. The tax savings could be substantial depending on how much you have accumulated.

Anyone using TurboTax for calculating their adoption tax credit? I'm finding it really confusing to enter all the different expenses, and it's not clear how to handle expenses that got partially reimbursed through our employer's adoption assistance.

As someone who just finalized an adoption last month, I wanted to share a few things that caught me off guard with the adoption tax credit. First, keep EVERY receipt - even seemingly small ones like notary fees and certified mail costs add up. Second, if you're doing a domestic adoption and it falls through, you can still claim expenses for that failed adoption attempt on your taxes, which I had no idea about until my tax preparer told me. One thing I wish I'd known earlier - photograph or scan all your receipts immediately because some of ours from the adoption agency faded over the 18-month process. Also, if you're traveling for court dates or to meet the child, keep detailed records of mileage, hotels, and meals. We were able to claim almost $1,800 in travel expenses we initially thought might not qualify. The income phase-out limits are pretty high ($263,410-$303,410 for 2024), so most families don't need to worry about that, but it's worth checking. Good luck with your adoption journey - it's so worth it in the end!

This is such a helpful thread! I'm actually going through the exact same situation right now. Based on all the discussion here, it sounds like the consensus is that FSA limits are indeed per employer, but many HR departments don't realize this or have internal policies that override it. I'm planning to approach my new employer's HR with the IRC Section 125(i) reference and IRS Information Letter 2016-0077 that several people mentioned. It's frustrating that something this important isn't clearly spelled out in the main IRS publications, but at least now I have the right citations to make my case. One question I have - for those who successfully convinced their HR departments to allow the full contribution, did you face any pushback during tax season or audits? I want to make sure I'm not setting myself up for problems down the road, even if the IRS technically allows it.

I'm dealing with this exact situation right now and wanted to share what I found after doing extensive research. The confusion seems to stem from the fact that while the IRS allows separate FSA limits per employer, many payroll systems and HR departments aren't set up to handle this properly. I ended up contacting my tax attorney who confirmed that FSA contribution limits are indeed per Section 125 Cafeteria Plan, which means per employer. The key insight is that the $3,200 limit (for 2024) is placed on what each employer can allow you to contribute through their plan, not on your total annual contributions across all employers. However, there's a practical consideration here - make sure you can actually use all the FSA money. I learned this the hard way when I had to scramble to spend down $1,800 before year-end after switching jobs mid-year. The "use it or lose it" rule doesn't care how many employers you had. For anyone trying to convince their HR department, I found that referencing Treasury Regulation 1.125-5 alongside IRC Section 125(i) was most effective. It clearly states that each employer's cafeteria plan is separate and subject to its own limits. Good luck!