Don't stress too much about this! As someone who's been filing taxes for over a decade, I can confirm that rounding to whole dollars is not only acceptable but actually encouraged by the IRS. Your tax software is doing exactly what it should be doing. The IRS processing systems are designed to handle whole dollar amounts more efficiently, which is why most tax forms explicitly state "round to nearest dollar" in the instructions. What you experienced - $58,427.83 becoming $58,428 and $7,342.56 becoming $7,343 - follows the standard rounding rule perfectly. Since both amounts had more than 50 cents, they rounded up appropriately. You're definitely not going to get flagged for an audit over proper rounding. The IRS is looking for much more significant discrepancies or missing income, not whether you rounded $0.83 up to the next dollar. Focus on making sure all your income sources are reported and your deductions are legitimate - those are the things that actually matter for tax compliance. Welcome to the world of filing your own taxes - you're doing fine!

I completely understand the anxiety around filing for the first time! I went through the exact same worry last year. The rounding is absolutely fine - in fact, if you look at the official IRS Publication 17, it explicitly states that you should round all dollar amounts to the nearest whole dollar on your tax return. What really helped put my mind at ease was realizing that the IRS actually prefers this approach because it reduces processing errors on their end. Your tax software is following standard protocol by doing this automatically. One tip for peace of mind: if you want to double-check that your software is applying the rounding correctly, just verify that amounts ending in 1-49 cents round down and amounts ending in 50-99 cents round up. From your examples, it sounds like it's doing exactly that. You're being very responsible by asking these questions, but rest assured - you're not going to have any issues with the IRS over proper rounding. Focus on making sure all your forms are included and your information is accurate. That's what really matters!

Don't forget about state-specific requirements! I'm in California and there are additional state payroll tax requirements for S Corps that weren't obvious when I first started. Each state has different rules about unemployment insurance, disability insurance, etc. Make sure whatever payroll system you choose handles your specific state's requirements.

This is exactly the situation I went through 8 months ago when I converted to S Corp! The learning curve is steep but totally manageable once you get the basics down. A few key points that helped me: 1. **Payroll frequency matters**: Don't wait until year-end - I do monthly payroll which keeps things simple and looks legitimate to the IRS. Set a consistent schedule and stick to it. 2. **Reasonable salary research**: For software development, I used sites like Glassdoor, PayScale, and Bureau of Labor Statistics to document what similar roles pay in my area. I keep this documentation in my tax files as backup. 3. **Start simple**: You don't need an expensive payroll service right away. I started with a basic one that handles the 941 quarterly filings and W-2s automatically. The peace of mind is worth the monthly cost. 4. **State requirements vary**: Check your state's specific rules - some have additional requirements beyond federal. I almost missed registering for state unemployment insurance in my state. The tax savings definitely outweigh the complexity once you're set up. Just budget for the payroll service cost when calculating your overall S Corp savings. Feel free to ask if you have specific questions about any part of the process!

For your situation, you're definitely on the right track with line 15a. Since this is a simple estate with minimal assets, here's what I'd recommend: Create a simple attachment titled "Statement 1 - Administrative Expenses" and list each deductible expense: - Court filing fees: $XXX - Required legal publication costs: $XXX - Postage for required notices: $XXX - Any other probate-related costs: $XXX Total: $XXX Enter the total on line 15a and write "See Statement 1" next to it. One important note: with only $6,500 in assets and $692 in cancellation of debt income, your total estate income is $7,192. If your administrative expenses exceed this amount, you'll have a loss that can potentially be passed through to beneficiaries on their final K-1. This could actually be beneficial tax-wise. Also, double-check that you're not missing any other income sources (like interest earned on estate accounts, even if minimal). The IRS gets copies of all 1099s issued to the estate's tax ID number, so make sure everything matches up. Keep detailed records of all administrative expenses with receipts - the IRS sometimes questions these deductions during audits of estate returns.

I just want to add that you should be careful about which administrative expenses are actually deductible on the 1041 versus which ones might be deductible on the estate's final Form 706 (if applicable) or on your personal return. For the 1041, you can definitely deduct expenses that are necessary for the administration of the estate and the collection of assets, like court fees, publication costs, and postage for required notices. However, some expenses like appraisal fees might need to be allocated between the estate return and your personal return depending on their purpose. Since you mentioned this is a small estate, you probably won't need to file Form 706 (estate tax return), but it's worth noting that funeral expenses would be deductible there if you did have to file one. Also, make sure you're not double-deducting anything. If you claim administrative expenses on the 1041, you generally can't also claim them as miscellaneous deductions on your personal return. Given the small size of this estate and the fact that you're doing the work yourself, the approach others have outlined with creating your own schedule for line 15a should work perfectly.

This thread has been incredibly helpful! I'm dealing with a similar situation but with a twist - I inherited a rental property from my parents about 6 years ago and have been taking depreciation since then. My question is: when I sell, do I only have to recapture the depreciation I've personally taken since inheriting it, or does the depreciation my parents took before I inherited it also carry over? I know the basis stepped up when I inherited it, but I'm not clear on how that affects the depreciation recapture calculation. Also, does anyone know if there are different rules for inherited property regarding the holding period for long-term capital gains treatment? I've heard conflicting information about whether inherited property automatically qualifies as long-term regardless of how long you've actually held it. Would really appreciate any insights from folks who have dealt with inherited rental properties!

Building on all the excellent advice here, I wanted to share a specific scenario that might help illustrate the calculations. I recently sold a rental property with a similar depreciation situation. My property: Purchased for $200K, took $65K in depreciation over 10 years, sold for $320K. Here's how the tax breakdown worked: - Total gain: $320K - ($200K - $65K) = $185K - Unrecaptured Section 1250 gain: $65K (taxed at 25%) - Remaining long-term capital gain: $120K (taxed at 0%, 15%, or 20% based on income) The key thing I learned is that you need to be very precise about your adjusted basis calculation. Don't forget to add back any capital improvements you made over the years - these increase your basis and reduce your overall gain. I had added a new roof ($12K) and HVAC system ($8K) that I initially forgot to include. Also, if you're in a high-tax state like I am (New York), factor in state taxes early in your planning. My effective rate on that $65K ended up being about 34% (25% federal + 8.82% NY state), which was a significant chunk of cash I needed to set aside. One last tip: consider estimated tax payments if this sale will create a large tax liability. You don't want to get hit with underpayment penalties on top of everything else!

I'm dealing with a similar CP134R situation right now and this thread has been incredibly helpful! Just wanted to add that when you file the 941-X, make sure to check Box 1 on line 1 to indicate it's correcting an error on a previously filed return. Also, in Part 2 where you explain the corrections, be very specific about what the IRS entered incorrectly vs. what the correct amounts should be. One thing I learned from my tax preparer is to also include a copy of your original 941 along with the 941-X so they can easily see the discrepancy. It might seem redundant since they should have it on file, but given that they made the data entry error in the first place, having a clean copy attached can speed up the process. Also, don't forget to sign and date the 941-X - sounds obvious but it's easy to miss when you're stressed about the whole situation!

This is such a frustrating but unfortunately common issue! I went through something very similar last year where the IRS had transposed two digits in my wage amount on a 941. What really helped me was creating a simple comparison chart showing their incorrect entry vs. my actual filing vs. my EFTPS payment history - all side by side. When I sent in my 941-X, I included this one-page chart as an attachment along with screenshots from my EFTPS account showing the payment dates and amounts. It made the discrepancy crystal clear for whoever was processing my correction. I think having that visual comparison really helped speed things up because I got my corrected account statement back in about 10 weeks instead of the 16+ weeks they initially quoted me. Also, pro tip: when you void the refund check, write "VOID - DATA ENTRY ERROR - SEE ATTACHED 941-X" across it. That extra context might help the person processing your return understand the situation immediately without having to dig through files.