You need to submit a NEW W4! I had this EXACT issue. Here's what worked for me: 1. Fill out a fresh W4 for yourself 2. Don't use the multiple jobs worksheet at all on YOUR form 3. Check the box in Step 2(c) that says "If there are only two jobs total, you may check this box" 4. Have your spouse do the multiple jobs worksheet on THEIR W4 This redistributes the withholding so it's not all coming from your smaller paycheck. My wife makes 250k and I make 40k, and this fixed the issue where my entire check was going to taxes!

Everybody is complicating this. The simplest fix is: 1. Both of you fill out new W4s 2. Skip the multiple jobs worksheet altogether 3. Figure out how much EXTRA you need withheld for the year 4. Divide that by # of paychecks your SPOUSE gets annually 5. Put THAT amount in Box 4(c) of SPOUSE'S W4 only 6. Leave your W4 simple with just the basic info This way, the extra withholding comes from the bigger paycheck where it won't hurt as much. My husband makes 6 figures and I make $40k and this method worked perfectly for us.

I went through this exact scenario in 2022. If you're not 100% sure whether you elected S-Corp status, check your mail for a CP261 notice from the IRS - they send this when they accept your S election. Also check if you ever filed Form 2553 (Election by a Small Business Corporation). This is REQUIRED to elect S-Corp status - checking a box on your EIN application alone doesn't complete the election. If you never received CP261 and never filed Form 2553, you're probably still a disregarded entity despite what you indicated on your EIN application.

I went through this exact same nightmare situation two years ago! The confusion between what you select during EIN application vs. actual S-Corp election is SO common. Here's what I learned: Just checking "S-Corp" on your EIN application does NOT automatically elect S-Corp status. You need to file Form 2553 separately within 75 days of formation (or by March 15th of the following year) to actually make the election stick. In my case, I thought I had elected S-Corp status but never filed the 2553. I was technically still a disregarded entity the whole time, which meant no back filing requirements for my dormant LLC. The easiest way to know for sure is to call the IRS at 800-829-4933 with your EIN and ask them directly what elections they have on file. If they don't show an S-Corp election, you're likely still a disregarded entity and don't need to worry about those 1120-S filings or penalties. Don't panic until you confirm your actual status - you might be stressing over nothing!

I've worked with both EAs and CPAs for my S-Corp over the years. My advice: interview a couple of each and go with whoever best understands YOUR specific situation. The credential matters way less than their experience with similar businesses. Ask direct questions about reasonable compensation for your industry, retirement options, and home office deductions if applicable. If they give vague answers or seem uncertain, move on regardless of whether they're an EA or CPA. And fwiw, my current EA charges about 40% less than my former CPA and provides much more proactive advice throughout the year.

As someone who made the S-Corp election last year for my consulting business, I can definitely relate to your situation! I went with an EA and it's been perfect for my needs. The key things that helped me decide: 1) My EA specializes specifically in small business taxation and S-Corps, 2) They're way more affordable than the CPAs I interviewed, and 3) They actually return my calls/emails quickly when I have questions. One thing I'd add to the great advice already here - make sure whoever you choose can help you set up proper documentation for your reasonable salary decision. My EA helped me create a file with industry salary data and documentation of my role/responsibilities that justifies my compensation level. This gives me peace of mind in case the IRS ever questions it. Also, don't overlook the quarterly estimated tax planning aspect. With an S-Corp, your tax situation changes significantly, and having someone who can help you avoid underpayment penalties is worth every penny. For your simple situation, a good EA will absolutely be sufficient and much more cost-effective than a CPA. Just make sure they specialize in S-Corps and small businesses rather than being a generalist.

Reading through all these responses has been incredibly enlightening! As someone who's been in tax for about 7 years but only recently started handling more complex partnership and S-corp clients, I'm realizing I've been approaching basis tracking all wrong. The reconstruction scenario you described, Jacinda, hits way too close to home. I'm currently working on a similar project for a client with a partnership interest from 2003, and we're missing about 8 years of K-1s. It's been a nightmare trying to piece together distributions and contributions from bank statements and partial records. What really resonates with me is Mei's point about making this a service differentiator rather than seeing it as a burden. I've been viewing basis tracking as extra work that cuts into profitability, but I'm starting to see how it could actually be a way to provide more value and justify higher fees. I'm definitely going to implement several of the strategies mentioned here - especially building basis tracking into engagement letters, creating that traffic light prioritization system, and developing quarterly client dashboards. The idea of sending "basis alert" emails before clients take distributions is something I wish I'd thought of years ago. One question for the group: for those of you who've made this transition to systematic basis tracking, roughly how much additional time does it add to your annual workflow per client? I'm trying to build a business case for my partners, and having realistic time estimates would be incredibly helpful.

This discussion has been absolutely invaluable - thank you all for sharing such detailed experiences and practical solutions! As someone new to this community, I'm amazed at how universally challenging basis tracking seems to be across different firms and experience levels. What strikes me most is how this issue seems to stem from the same root cause everywhere: treating basis tracking as optional "extra work" rather than essential compliance. The stories about clients facing unexpected tax bills due to poor basis records really drive home why this needs to be a non-negotiable part of our service. I'm particularly drawn to the systematic approaches mentioned here - building it into engagement letters, creating standardized templates, and establishing regular client communication around basis changes. The "basis dashboard" concept and quarterly check-ins seem like they would not only prevent problems but actually strengthen client relationships by demonstrating proactive expertise. For those dealing with reconstruction projects like the original post describes, it sounds like a combination of approaches works best: requesting records from the partnership itself, reaching out to other partners who might have better documentation, and using available tax returns to piece together missing information. The tools mentioned for both automated calculations and getting through to partnership administrators also seem worth exploring. The risk management framing really resonates - when you position proper basis tracking as protecting clients from costly mistakes rather than just creating more paperwork, it becomes much easier to justify the time investment and get client buy-in. I'm excited to implement some of these strategies in my own practice!

You're absolutely correct that you can file Form 709 separately from your 1040! This is actually the standard approach since Form 709 cannot be e-filed and must be paper-filed with the IRS. Your plan to e-file your 1040 through TurboTax and mail Form 709 separately is perfectly fine. Just make sure to send the 709 to the correct IRS processing center (the instructions will tell you which address based on your state) and use certified mail for proof of delivery. However, I'd strongly recommend double-checking whether you actually need to file Form 709 at all. You mentioned you paid your nephew's tuition directly to the school - if that's the case, this would qualify for the unlimited educational expense exclusion under IRC Section 2503(e), meaning no Form 709 is required regardless of the amount. The key distinction is: if you wrote the check directly to the educational institution for tuition, no Form 709 needed. But if you gave money to your nephew and he paid the school, then you'd need Form 709 for amounts over the annual exclusion limit. Both forms share the same April 15th deadline, so just keep that timing in mind. Good luck with your filing!

You're absolutely right that you can file Form 709 separately from your 1040! This is actually the most common approach since Form 709 must be paper-filed (no e-filing option available) while you can e-file your 1040 through TurboTax as usual. Your planned approach won't cause any issues with the IRS. Just make sure to: - Mail Form 709 to the correct IRS service center based on your state (check the form instructions) - Keep the same April 15th deadline for both forms - Consider using certified mail for Form 709 to have proof of delivery However, before you file Form 709, I'd definitely verify whether it's actually required in your situation. You mentioned paying for your nephew's college tuition directly to the school - if you literally wrote the check to the educational institution (not to your nephew), this qualifies for the unlimited educational expense exclusion under Section 2503(e) of the tax code. This means no Form 709 would be needed regardless of the amount. The distinction is crucial: direct payment to school = no filing required, but giving money to your nephew who then pays = Form 709 needed if over the annual exclusion. If you're unsure about the exact payment method or have other gifts to report, it might be worth consulting with a tax professional to make sure you're handling everything correctly!