As someone who's been doing payroll for over 15 years, I just want to say how refreshing it is to see new employees actually taking the time to understand their paystubs! The "FED MWT EE" confusion is definitely the #1 question we get from new hires. One additional tip I'd share: if you ever see your federal withholding amount change unexpectedly from paycheck to paycheck (and you didn't submit a new W-4), it could be due to the IRS withholding tables being updated mid-year or your employer switching payroll systems. This is pretty rare, but it's worth knowing that small fluctuations can happen for legitimate reasons. Also, for anyone who gets bonuses or commission pay, those are typically taxed at a higher withholding rate (usually 22% for federal) regardless of your actual tax bracket. So don't panic if you see a much larger "FED MWT EE" deduction on those paychecks - it's normal and will balance out when you file your return. It's great to see so many people being proactive about understanding their finances. Keep asking questions - that's how you build financial literacy!

Thanks Alberto for that professional insight! Your point about bonus withholding is really important - I got my first quarterly bonus last month and was shocked to see how much was withheld for "FED MWT EE" on that check. I actually called HR thinking there was an error, but now I understand it's just the standard 22% supplemental withholding rate. It's reassuring to hear from someone with 15+ years of payroll experience that these questions are totally normal. Sometimes it feels like everyone else just magically understands this stuff, but clearly that's not the case! One follow-up question for you: when you mention IRS withholding tables being updated mid-year, how often does that typically happen? And would employees usually be notified if their withholding changes for that reason, or do we need to watch for it ourselves on our paystubs?

I've been through this exact scenario and can confirm your instincts are absolutely correct - your CPA is mixing up two completely different March deadlines! This is actually one of the most common and expensive mistakes I see business owners make. The March 15, 2025 deadline is for filing Form 2553 (S corp ELECTION) to have S corp status for the entire 2025 tax year. The March 2026 date your CPA mentioned is when you'll file Form 1120S (your actual S corp TAX RETURN for 2025). These are two totally different things! If you wait until March 2026 to file the election, you'd lose an entire year of S corp benefits and could pay thousands more in self-employment taxes. I made this mistake initially and it cost me big time before I caught it. Regarding your salary/distribution concerns - you're spot on. You absolutely cannot take S corp distributions until AFTER filing Form 2553. The IRS is very strict about this sequence: 1) File the election first, 2) Set up proper payroll for reasonable salary, 3) Only then take distributions. I'd strongly recommend printing the Form 2553 instructions and scheduling an urgent meeting with your CPA this week. Show them the "2 months and 15 days" rule clearly stated in the IRS publication. This deadline confusion is way too costly to leave unresolved - trust your gut because you're absolutely right to question this timeline!

I went through this exact situation last year and can confirm everyone's advice here is spot on - your CPA is definitely confusing the election deadline with the tax filing deadline. This is such a common and costly mistake! Here's what I wish someone had told me: start your prep work RIGHT NOW. Don't wait for the CPA meeting to get started on the logistics. I began setting up my payroll system and researching state requirements in November for my March 15th election filing, and I was so glad I gave myself that buffer time. For the reasonable salary piece (since you mentioned consulting), I used a combination of Bureau of Labor Statistics data for my area and industry salary surveys. The key is documenting your research so you can justify your decision if the IRS ever questions it. I kept a file with printouts showing comparable salaries for similar roles in my geographic area and business size. One thing that really helped me was creating a simple timeline document: "November 2024: Set up payroll system and research salary benchmarks, December 2024: Complete state registrations, January 2025: Finalize all documentation, February 2025: File Form 2553." Having it written out like this kept me on track and ensured I didn't miss anything important. The March 15, 2025 deadline is absolutely firm - there's no extension or grace period. But if you start the prep work now, you'll be in great shape to file early and avoid any last-minute stress. Trust your instincts on questioning that March 2026 timeline - you're 100% right to be concerned!

I'm new to this community but dealing with a very similar situation! Just got hit with a vacation payout where they withheld 49% and I was absolutely panicking thinking something went wrong with my final paycheck. Reading through all these experiences has been such a relief - I had never heard of the aggregate method before and had no idea payroll systems could be so aggressive with withholding on lump sum payments. It makes sense now why they treated my one-time vacation payout like I was suddenly earning that amount every pay period. The real numbers everyone has shared are incredibly helpful - knowing that most people got back 75-85% of the over-withheld amount gives me so much hope for tax season. I was genuinely worried I'd end up owing all that money to the IRS. I've already scanned multiple copies of my pay stub after reading that advice, and I'm planning to be very conservative with any W-4 adjustments at my new job. It's frustrating having thousands tied up until I can file, but at least now I know this is completely normal. Thanks to everyone who shared their actual experiences - this has been way more helpful than trying to decode IRS websites on my own!

I'm new to this community and just experienced the exact same thing! Left my job with about 350 hours of banked vacation time and they withheld 47% - I was absolutely convinced there was some kind of payroll error. Reading through everyone's explanations about the aggregate method has been incredibly enlightening. I had no clue that payroll systems could treat a one-time payout as if you're earning that amount every single pay period for the whole year. It seems like such a flawed approach, but at least now I understand why the withholding was so shockingly high. The real experiences and actual numbers people have shared here are so reassuring - especially hearing that most folks got back 75-85% of the over-withheld amount when they filed. I was genuinely terrified I'd somehow end up owing all that money to the IRS. I've already made multiple copies of my pay stub after reading that advice throughout this thread, and I'm planning to be very conservative with any W-4 adjustments at my new position. It's definitely frustrating having so much money tied up until tax season, but knowing this is completely normal makes the wait much more manageable. Thanks to everyone who took the time to share their real experiences - this community has been far more helpful than any official tax resource I tried to navigate on my own!

My return from last year still isnt processed so count urself lucky its only been 2 weeks 😭

Don't stress about it! Same thing happened to me last year - filed early through TurboTax and panicked when nothing showed up for weeks. The IRS basically puts all early returns on hold until they officially open processing. Once they start accepting returns (which just happened this week), you should see movement pretty quickly. Check WMR again in a few days and you'll probably see it switch to "accepted" status.

I went through this exact same situation about 3 years ago and can confirm what others have said - you're handling it correctly by waiting for the W-2c before filing. One additional tip: when you get your corrected W-2c, make sure to keep both the original incorrect W-2 AND the corrected W-2c in your tax files. The IRS recommends keeping the original for your records even after the correction, just in case there are any questions later. Also, if you're using tax software to file, most programs will automatically detect and flag SSN mismatches when you enter your information, so having the correct W-2c will make the filing process much smoother. Your refund timing shouldn't be affected once you file with the correct documents - I actually got my refund in the normal timeframe (about 2 weeks) even though I filed later than usual that year due to waiting for the correction.

I've been through a very similar situation and want to echo what others have said about waiting for the corrected W-2c - it's absolutely the right move. Don't risk filing with mismatched information! One thing I'd add is to ask your payroll department for a timeline in writing when they call you back. Sometimes these corrections can get lost in the shuffle if there isn't clear accountability. When I had my SSN error corrected, I asked for an email confirmation with the expected completion date, and it helped keep things on track. Also, while you're waiting, this might be a good time to double-check your other tax documents for any potential issues. Better to catch everything now rather than discover more problems later. The stress is totally understandable, but you're handling this the right way by addressing it before filing!