I'm a retired accountant and worked with several passive investment S-Corps over the years. Here's the practical reality: 1) Pure investment S-Corps are in a grey area for reasonable compensation requirements 2) What matters is substantiating that minimal to no actual services are being performed 3) Document through corporate minutes the passive nature and automation of investments 4) Consistency is key - if you claim it's passive, make sure your activities match that claim 5) Consider a minimal salary if you're doing ANY administrative work at all (even a few hours monthly) The real risk isn't necessarily audit (though that can happen) but potential reclassification of distributions which can trigger back taxes, penalties, and interest if they determine services were being performed.

Has anyone considered the Schedule K basis implications? When you take distributions, you need sufficient basis, and different types of income affect basis differently. Treasury interest increases basis, but distributions reduce it. If distributions exceed basis, you could end up with taxable gain. Also, watch out for the accumulated earnings tax if you've been accumulating excessive cash without a business purpose - though S-Corps usually avoid this since income passes through anyway. My accountant recommended documenting a specific business purpose for holding the cash (like future investments) and then documenting the reason for distributions now (change in investment strategy, etc.).

Quick tip from someone who's been through this - if you have your last paystub of the year, it usually has your year-to-date info which is basically what goes on your W2! Most restaurants use standard payroll systems that calculate this automatically. Might be worth checking if you have that last stub somewhere.

Has anyone here ever had the IRS penalize them for filing with Form 4852 instead of a W2? I'm worried my refund will get flagged or delayed if I go this route. My old employer is being difficult about sending my W2 and I need to file soon.

One thing nobody mentioned yet is estimated tax payments for self-employment or investment income. If you've had a good year with extra income, you might need to make a Q4 estimated payment by January 15th to avoid penalties. This isn't technically a "tax reduction" strategy but can save you money in penalties!

If you have kids, look into contributing to a 529 college savings plan before year end. Many states offer tax deductions for contributions. Also, review any medical procedures you might need - sometimes it makes sense to bunch them in December if you're close to exceeding the medical expense deduction threshold (which is 7.5% of your AGI).

Something nobody's mentioned yet - make sure your mom doesn't claim herself as independent on her own tax return if she files one for her part-time job. You'll both get flagged if she claims herself and you also claim her as a dependent.

One other thing I learned when claiming my parent - if your mom has medical expenses that you pay, you can include those when you itemize deductions on your return. Helped me get above the standard deduction threshold last year and saved some money.

Have you tried looking into tax attorneys who offer consultation services? I had a similar situation last year when I was starting a small business but wanted to handle the ongoing tax work myself. I found a tax attorney who charged me for a 2-hour consultation where I brought all my questions. She answered everything, gave me some resources to reference, and didn't try to sell me on recurring services. It wasn't cheap (about $400 for the session), but the advice saved me probably thousands in potential mistakes.

Don't overlook the free resources! I know you said you're willing to pay, but I've had great experiences with VITA (Volunteer Income Tax Assistance) volunteers. If your income is under $60k, they offer free tax help. Even if you don't qualify for their free filing help, many of the volunteers are really knowledgeable and can answer questions. The same goes for Tax-Aide from AARP - they focus on seniors but often help others too.