Edward, my heart goes out to you during this incredibly difficult time. Losing your mother so unexpectedly at 64 must be devastating, and discovering this substantial cash inheritance adds such complexity when you're already dealing with grief. I'm really impressed by how you're approaching this situation - seeking guidance before acting shows real wisdom and integrity. Your mother clearly trusted you by making you a co-lessee on that safe deposit box, and that handwritten note about "something for the kids" is such a touching reminder of her love and foresight for you and your sister. The advice you've received here has been exceptional, and I want to echo the key points: use an estate account for the initial deposit, bring all your documentation to the bank (executor papers, death certificate, safe deposit box agreement), and don't worry about the Currency Transaction Report - it's just routine paperwork that actually protects you when you have legitimate inherited funds. What strikes me most about your situation is how your mother, even without sharing all the details, was thinking ahead to provide security for her children. Sometimes that generation preferred to keep financial matters private while still ensuring their loved ones would be taken care of. Her decision to keep cash accessible in the safe deposit box, while surprising, was likely her way of making sure you and your sister would have immediate resources when needed. Take your time with this process. There's no need to rush, and handling everything properly through estate administration will give you peace of mind for years to come. Your mother's final gift to you both deserves to be handled with the care and respect you're already showing. Wishing you strength as you navigate this process and honor your mother's memory.

Edward, I'm so sorry for your loss. Losing your mother unexpectedly is devastating, and finding yourself dealing with complex estate matters while grieving makes everything so much harder. The advice you've received here is excellent - particularly about using an estate account and being completely transparent with the bank. I went through something similar with my father's estate last year, and I can tell you that banks handle these situations more often than you might think. One small addition to the great guidance already given: when you visit the bank, consider asking to speak with a manager or someone experienced in estate matters. They can walk you through their specific procedures and may even provide you with a checklist of what documentation they prefer to see. This can make the whole process feel less intimidating. Your mother clearly loved you and your sister deeply. That handwritten note about "something for the kids" shows she was thinking of your welfare even if she didn't share all the details. By handling this properly through estate administration, you're honoring both her memory and her intentions for providing for you both. Take your time with this process - there's no need to rush. Getting professional guidance for an estate with this level of assets is really wise and will give you confidence that you're doing everything correctly.

This discussion has been incredibly thorough and helpful! As someone who's been managing S-corp health insurance deductions for a few years now, I wanted to add a couple of practical tips that might save others some headaches. First, when you set up your formal health reimbursement plan, make sure it specifically addresses family members and different types of coverage (COBRA, marketplace, direct pay, etc.). I learned this the hard way when my accountant's initial plan template was too narrow and we had to revise it during an audit. Second, consider setting up a dedicated business savings account just for health insurance reimbursements. While it's not required, it makes the paper trail crystal clear and simplifies bookkeeping. I transfer the quarterly reimbursement amounts there, then pay myself from that account with clear documentation. One thing I haven't seen mentioned - if you're doing this mid-year like the original poster, make sure your payroll processor understands how to handle the health insurance reimbursements on your W-2. Not all payroll companies are familiar with the nuances for S-corp shareholders, and you want to make sure it's coded correctly (subject to income tax but not FICA). The tax savings really are substantial - I'm saving about $3,800 annually on similar premium amounts. The key is getting all the documentation and processes right from the start rather than trying to clean things up later.

This thread has been incredibly informative! I'm also an S-corp owner dealing with health insurance for myself and my spouse, and I had no idea about all these documentation requirements. I've been paying about $9,200 annually for our health insurance premiums directly from my personal account and just taking the self-employed health insurance deduction on my personal return. Based on what everyone's sharing here, it sounds like I'm missing out on doing this the right way through my S-corp. A few questions for the group: When you set up the formal reimbursement plan, did you need to involve a lawyer or was your CPA able to handle the documentation? Also, I'm curious about the timing - if I get this set up before December, can I have my S-corp reimburse me for premiums I've already paid this year? The potential tax savings are compelling. At my tax bracket, I'm probably looking at $2,500+ in additional savings just from structuring this correctly. Definitely seems worth the effort to get proper documentation in place! Thanks to everyone who shared their experiences - this has given me a clear action plan to discuss with my accountant.

I've been following this discussion and wanted to share my experience as someone who made a similar mistake last year. The advice about removing the SEP-IRA contributions is spot on - I had to do the exact same thing. When I called my custodian to request the excess contribution removal, I specifically said "I need to remove excess contributions due to having multiple employer-sponsored retirement plans for the same business." They knew exactly what I was talking about and had a standard form for this situation. The key thing that helped me was getting everything in writing from the custodian before they processed the removal. They sent me a letter confirming that the distribution would be coded as an excess contribution removal on the 1099-R (code P), not as a regular distribution. This documentation was crucial when I filed my taxes. One more tip: when you call, ask them to calculate any earnings on the excess contributions that also need to be removed. The IRS requires that both the excess contributions AND any earnings attributable to those contributions be distributed. The earnings portion will be taxable, but removing everything properly avoids the ongoing 6% penalty. You're definitely on the right track focusing on the Solo 401k going forward. It really is the better option for self-employed folks who want to maximize their retirement savings in one account.

I've been through this exact situation and want to echo what the CPA and others have said - you're definitely fixable, but you need to act quickly! The key insight that helped me was understanding that as a self-employed person, you can't split employer contributions between two different retirement plans for the same business. Your $23,000 Solo 401k employee contribution is totally fine - that's a separate bucket. But the $28,500 SEP-IRA contribution is competing with any employer contributions you might have made to your Solo 401k. I'd recommend calling your SEP-IRA custodian tomorrow and requesting a complete "excess contribution removal" for the entire $28,500 plus any earnings. Use that exact phrase - they'll know what you're talking about. Get the removal processed ASAP so you have documentation before filing your taxes. Going forward, just stick with the Solo 401k. You can actually contribute MORE with just that one account ($23,000 employee + up to 25% of net self-employment income as employer contributions) without all the complexity of managing two different account types. You caught this early enough to fix it properly - don't stress too much about penalties as long as you get the excess removed before your filing deadline!

Just got my refund today! Filed on 2/1, accepted same day. WMR showed DDD of 2/26, but with TurboTax early deposit, it hit my account this morning at 9:43am. Exactly as the schedule predicted. Smooth process from start to finish.

This is incredibly helpful information! I've been using TurboTax for years but never really understood how their early deposit feature worked behind the scenes. My DDD is showing as 3/3/25 on my transcript, so based on this timeline I should expect my deposit by 2/26/25. It's reassuring to see so many people confirming the accuracy of this 5-day calculation. I was debating whether the early deposit fee was worth it, but knowing I can count on this precise timing definitely helps with my monthly budgeting. Thanks for taking the time to call and get the official details from their customer service!

Don't overlook the state estate tax angle. Federal exemptions are high, but states like Massachusetts, Oregon, and Minnesota have much lower exemptions (around $1-3 million). A properly structured trust can help with state estate taxes even if you're below the federal threshold.

This is exactly the kind of comprehensive discussion I was hoping for when I posted this question! Reading through all these responses, I'm realizing that trust planning is way more nuanced than the financial advisor made it sound. A few key takeaways that are helping me understand the basics: 1. The distinction between revocable vs irrevocable trusts is crucial - only irrevocable trusts actually remove assets from the taxable estate 2. There's often a trade-off between estate tax savings and losing the step-up in basis for capital gains 3. At $4.2M, my parents might be more concerned about state estate taxes depending on where they live 4. The generation-skipping transfer tax is something we hadn't even considered but should definitely explore given they have grandchildren I think our next step is to get a proper analysis of their situation before meeting with an estate planning attorney. Some of the tools mentioned here (like taxr.ai) might help us go in more prepared. I also want to research attorneys who specialize specifically in multi-generational planning rather than just general estate work. Thanks everyone for taking the time to share your experiences and knowledge. This community is incredibly helpful for navigating these complex tax situations!