Instead of going completely exempt, have you considered just adjusting your W-4 to have a specific dollar amount withheld from the bonus? Most payroll systems allow you to specify an exact withholding amount rather than using the standard percentage. You could calculate roughly what you'll owe on the bonus and have just that amount withheld.

I've been through this exact situation and learned the hard way that "going exempt" isn't actually exempting you from taxes - it's just deferring when you pay them. Here's what I wish someone had told me: The 22% supplemental withholding rate on bonuses is often actually LESS than what you'd pay if that money was added to your regular paycheck and taxed at your marginal rate. With your $62k salary plus a $13k bonus, you're looking at potentially being in the 22% bracket anyway. Instead of going exempt, consider this approach: Calculate roughly what you'll owe on the bonus (22% federal + your state rate + FICA taxes), then ask payroll to withhold that specific amount. This way you get more cash upfront than the standard withholding but won't get hit with a surprise tax bill. The real danger isn't just owing money at tax time - it's the underpayment penalties if you don't meet the safe harbor rules. With a bonus that large, you could easily trigger penalties even if you have the money to pay the taxes later. Your coworkers' advice might work for them depending on their specific situations, but with your income level and family situation, I'd be very careful about following that strategy without running the numbers first.

I've been through a similar situation with a syndication that dragged on for over a year after the sale. What really helped me was creating a simple tracking spreadsheet with three columns: Date of Request, Question Asked, and Response Received. This forced me to be specific in my questions and helped document the sponsor's responses (or lack thereof). Some specific questions that got better responses from my sponsor: 1) What is the estimated completion date for final tax return filing? 2) Are you waiting for any specific documents from third parties (buyer, lenders, etc.)? 3) What reserves are being maintained and what potential liabilities do they cover? 4) What state dissolution requirements still need to be completed? The documentation also proved helpful when I eventually had to call the IRS for guidance on my own tax reporting. Having a clear timeline of communications showed I was being diligent about getting proper information for my returns. One last tip - if your sponsor is unresponsive to written requests, try reaching out to other limited partners. Sometimes collective pressure from multiple investors gets better results than individual requests.

I've been following this discussion with great interest since I'm dealing with a nearly identical situation. My syndication sold in late 2022, distributed proceeds in early 2023, but I'm still waiting for final dissolution paperwork as we head into 2025. One thing that hasn't been mentioned yet is the potential impact on your state tax returns. While we've covered the federal reporting requirements thoroughly, some states have their own partnership dissolution requirements that can affect your state tax reporting. In my case, the partnership was formed in Delaware but owned property in Texas, and both states had different requirements for the dissolution process. I'd recommend checking with your state tax authority (or a local tax professional familiar with your state's rules) to make sure you're handling the state reporting correctly while waiting for the federal dissolution paperwork. Some states require you to continue filing partnership returns until formal dissolution is complete, regardless of activity level. Also, for those dealing with unresponsive sponsors - I found that mentioning potential regulatory complaints (like with state securities regulators) in written communications often gets faster responses. Most sponsors want to avoid any regulatory scrutiny, so the mere mention of escalating to authorities can motivate better communication. The waiting is frustrating, but as others have noted, it's better to be conservative and wait for proper documentation than to risk having to file amended returns later.

I'm probably too late to help the original poster, but for anyone else wondering: YES it's worth it! We missed out on over $800 in deductions using the free version when we had our first kid because it didn't properly account for some dependent care expenses. Learned our lesson and upgraded the next year. The $30 is nothing compared to the potential refund increase. Plus version also saves your returns longer which is helpful for new parents who might need tax records for childcare assistance programs, mortgage refinancing, etc.

Congrats on the new house and baby! Based on your situation, I'd definitely recommend upgrading to H&R Block Plus. With mortgage interest, property taxes, and a new dependent, you're looking at several deductions that the free version just doesn't handle well. The mortgage interest deduction alone could save you hundreds - especially in your first year of homeownership when most of your payments go toward interest. And with a baby, you'll want to make sure you're getting the full Child Tax Credit ($2,000) plus any childcare credits if applicable. I was in a similar boat two years ago and tried to stick with the free version to save money. Big mistake - I ended up having to amend my return when I realized I'd missed claiming several hundred in property tax deductions. The Plus version walks you through all the homeowner stuff step by step, which is super helpful when you're filing as a new homeowner for the first time. The $30 is honestly a small price to pay for the peace of mind that you're not leaving money on the table, especially with all the major life changes you've had this year!

For what it's worth, I always select "LLC" first, then include a note that says "LLC with S-Corporation tax election" whenever possible. Most forms aren't designed with the nuance of tax elections in mind. On government forms like census surveys or regulatory filings, there's usually an "other" option where you can write in "LLC taxed as S-Corporation" if it seems important for that particular form.

I run into this all the time with clients. The real issue is that forms are designed by people who don't understand the distinction between legal entity type and tax status. Here's what I tell my clients: - Secretary of State filings: Always "LLC" - IRS filings: "S-Corporation" (Form 1120-S) - Loan applications: "LLC" with note about S-Corp election - Insurance applications: "LLC" - Contracts: "LLC" with full legal name including "LLC" What matters is understanding what the form is asking for and why they need to know.

With your income at $580k, you're definitely going to be phased out of the Child Tax Credit completely. The phaseout for single filers starts at $200,000 and you'd lose the entire credit well before your income level. Your wife at $35k would get the full $2,000 credit, so she should absolutely be the one claiming your child. Also worth noting - if your wife qualifies for Head of Household status (which she might if she's paying more than half the household costs for her and the child), that filing status comes with better tax brackets and a higher standard deduction than single. This could save her even more money beyond just the Child Tax Credit. Don't forget about the Child and Dependent Care Credit for your daycare expenses too! Same logic applies - it's also income-limited, so having your wife claim those expenses will likely result in a bigger benefit than if you tried to claim them.

This is a really smart question to ask! Given your income levels, you're absolutely right that your wife should claim the child. With your $580k income, you're completely phased out of the Child Tax Credit (the phaseout starts at $200k for single filers), while your wife at $35k would get the full $2,000 credit. One additional consideration - since you mention you cover more household expenses, make sure you're both clear on who can legitimately claim Head of Household status. The person claiming the child as a dependent must also be paying more than half the costs of maintaining the home to qualify for HOH. If you're covering most expenses but your wife is claiming the child, she might not meet the HOH requirements and would need to file as single. You might want to consider documenting who pays for what household expenses, or potentially restructuring how you split costs if it makes sense tax-wise. Sometimes shifting some bill payments to the lower-income partner can help them qualify for HOH status, which provides better tax rates and a higher standard deduction on top of the Child Tax Credit savings. Also definitely look into the Child and Dependent Care Credit for your daycare costs - same income limitation logic applies there too!