I've been using Justworks for my C Corp for about 2 years now. It definitely simplifies the admin side but doesn't really address the tax optimization between multiple income sources. You still need a good accountant for that part. The PEO basically just handles compliance, payroll processing, and can get you better benefits options than you'd have as a tiny company.

This is actually a really good point. I've used fiscal year planning with my S-Corp (mine runs Feb-Jan) and it gives me an extra month to make strategic decisions before the personal tax year ends.

I hadn't thought about the fiscal year angle at all. My C Corp is currently on a calendar year but I'm wondering if it would be worth changing that. Would it complicate my accounting too much to have different fiscal years?

How long should we actually keep inheritance paperwork? I'm drowning in statements and forms from my mom's estate from last year.

Keep the original basis documentation (showing what your dad paid for investments) permanently, or at least until several years after you've sold the inherited assets. The step-up in basis rules are critical for calculating capital gains tax when you eventually sell. For the tax returns themselves and supporting documentation, the standard is to keep them for at least 7 years, but for inheritance matters I personally keep everything indefinitely. The IRS has no time limit for auditing returns where they suspect substantial underreporting, and inheritance situations are unfortunately common triggers for those kinds of reviews.

I used them last year for my mom's estate and it was a complete disaster. The regular preparer had NO IDEA how to handle the inherited IRA distributions and I ended up having to go to a CPA to fix everything. Cost me way more in the end.

Thanks for this warning. Can I ask how much the penalties ended up being in your case? And did you eventually have to file all the back returns anyway?

The penalties were brutal - about $5,200 for just two years of unfiled S corp returns. They hit you with $435 per month for up to 12 months per unfiled return. And yes, I still had to file all the back returns anyway, plus pay a CPA to help me sort through the mess. The worst part was reconstructing records from years ago. All told it probably cost me close to $8,000 including penalties, professional fees, and state filing costs to clean it all up. Definitely take care of this now while everything is still fresh and you have all your records easily available.

Great point! I was wondering about this because I have the opposite situation - I paid some personal expenses from my business account. How would that be handled on the corporate return?

So even if I explain to the IRS that I couldn't file accurately because my employer hasn't given me my W-2, they'll still charge penalties if I end up owing?

Exactly. The IRS doesn't care why you couldn't pay on time - they only care that you didn't pay by April 15. Your issue with your employer is separate from your obligation to pay taxes on time. That's why you need to make your best estimate and pay that amount by the deadline. Think of it this way: the IRS considers your taxes due as you earn income throughout the year. The April 15 deadline is already a grace period to finalize everything. So waiting on documents doesn't extend your obligation to pay what you already owe.

I went through this in 2023 and couldn't get the penalties removed despite documenting all my attempts to get my W-2 from my ex-employer. The IRS agent told me it's my responsibility to estimate and pay on time regardless of having the final documents. It really sucks but that's how they enforce it.

But if you warn them, won't they just hide the evidence better? I had a former friend who was doing something similar and when someone in our group warned him, he just got more sophisticated about hiding it. Sometimes people need to learn consequences the hard way.

That's a fair concern. If someone is determined to commit fraud, a warning might just make them better at concealing it. However, sometimes people genuinely don't realize the severity of what they're doing - they might see it as "bending the rules" rather than committing a federal offense. If you think your cousin might be receptive, a gentle approach might work: "Hey, I'm concerned about what you told me about your taxes. Those penalties can be really serious." But if they've shown they don't care about the rules or might become defensive, then you're right that a direct confrontation might not help the situation.

Is there any way to find out what happened after you submit a tip? Like do they tell you if they investigated or collected more tax? I reported an employer a few years ago who was paying people under the table but never heard anything about what happened.