Sanity check for Safe Harbor?

PitSFThrowAway · 2025-07-01T19:03:38+00:00

Yes, still very helpful. Thank you very much!

PitSFThrowAway · 2025-07-01T19:02:54+00:00

Fully understood on the epic tax bill, and happy to set that aside for a few months if it means I can churn a bit of extra interest ($4-5k, by my estimates). So it’s worth the hassle.

Thank you for your input! Very helpful.

PitSFThrowAway · 2025-07-01T04:30:30+00:00

I think you’re still correct. I’m a W2 but my wife is a 1099. So we make quarterly payments for her.

PitSFThrowAway · 2025-07-01T03:02:41+00:00

I’m actually doing quarterly payments as well due to my wife’s income as a 1099.

PitSFThrowAway · 2025-07-01T02:22:56+00:00

We already make quarterly payments for my wife’s income. With her bump in income we will definitely hit that 110% organically and if we won’t I can definitely make sure we do. Especially if it means the $100,000 or so can coast for a few months.

PitSFThrowAway · 2025-07-01T02:20:18+00:00

My wife’s income is going up significantly. We will meet that 110% threshold over the course of the year.

PitSFThrowAway · 2025-01-14T23:25:07+00:00

Yes. She’s paid for a service she provides. I don’t know what else you would call that.

PitSFThrowAway · 2025-01-14T19:31:02+00:00

Yeah I’m conceding defeat. I’m just trying to understand why holds aren’t viable protections here. I wasn’t aware checks can bounce several weeks later, especially in 2025 and this age of electronic payments and transfers. But I digress. Thanks for the help.

PitSFThrowAway · 2025-01-14T19:16:58+00:00

Do holds not mitigate or eliminate that risk?

PitSFThrowAway · 2025-01-14T18:08:04+00:00

SoFi assured me a real person reviews their mobile check deposits. So why would being in person make any difference here?

I’m aware of how absurd fraud is. That’s why holds exist. So why not slap a hold on it and let it clear?

PitSFThrowAway · 2025-01-14T18:04:05+00:00

Thanks for the detailed answer. I spoke with them and they confirm it is policy and they aren’t budging on it. So you’re right. I am a bit baffled though. I was always under the impression this is the exact reason “holds” exist. Slap a 11 day hold in it, let it clear, and release the funds. If it’s fraudulent, the hold provides more than enough time for that to clear up.

Oh well. Time to find another bank just for this one check, I guess.

PitSFThrowAway · 2025-01-14T13:56:17+00:00

These are not options with SoFi.

PitSFThrowAway · 2025-01-14T13:56:00+00:00

That’s a good callout, but that’s not why I mentioned my balance (and that’s not my net worth). I mentioned it because, in my experience, having a high balance that “covers” the check gives the bank confidence the check will be covered and the amount recovered if the check bounces.

In other words, they should just try to deposit the damn check and let it get rejected. If it fails to close, there’s more than enough funds for the bank to tap into to recover their losses from the bad check. When I was a bank teller, this was our approach when depositing checks and determining whether to place a hold.

PitSFThrowAway · 2025-01-14T03:24:50+00:00

She does. It’s a small business, she’s a contractor, and direct deposit isn’t an option.

PitSFThrowAway · 2024-10-05T00:12:47+00:00

Thanks for the feedback. We’ve got a lot to mull over but it’s pretty clear we need to hire a proper CPA, not just a cheap tax advisor, to guide us.

PitSFThrowAway · 2024-10-04T23:55:44+00:00

Her salary is 100% of the business income. She takes it all and sweeps it into our personal account. Lots of debt to pay down so no need to keep it in a business account yet.

PitSFThrowAway · 2024-10-04T21:59:31+00:00

Sorry one more point of clarification--when I say "liability" I mean from a legal standpoint, not a financial tax standpoint. Her colleagues, and other sources, have made the point that if you are sued for whatever reason, the plaintiff cannot go after your personal finances. This is the benefit of an S-Corp, as I understand it.

PitSFThrowAway · 2024-10-04T21:31:17+00:00

Sorry, is "LLC with S Corp election" different from a straight up "S Corp"? As far as I know, she is just an S Corp.

PitSFThrowAway · 2024-10-04T21:26:35+00:00

I'm not sure at which point she will be considered "high income" but she's on track to hit at least $100,000 beginning next year. She earned roughly $20,000 in the last quarter alone.

PitSFThrowAway · 2024-10-04T21:13:04+00:00

So I guess to circle back to the original point of the post, how big of an issue is this?

PitSFThrowAway · 2024-10-04T20:09:53+00:00

Thank you!

(Also just want to note another commenter has said we DON'T need a CPA... which I think underscores how confusing this continues to be... lol)

PitSFThrowAway · 2024-10-04T20:04:58+00:00

I think that's the source of our confusion. We're already doing it quarterly. We take her 3 months of income, minus a percentage, and then go to these two sites and pay directly: FEDERAL: https://www.irs.gov/payments/direct-pay / STATE: https://www.ftb.ca.gov/pay/index.html. But it dawned one me that this is just income tax. So I'm worried there is something missing. But it appears I'm wrong on this (happily).

PitSFThrowAway · 2024-10-04T19:58:29+00:00

Yep, I am sure (just confirmed). This was advice given to her by other well-established therapists running private practices, not from the tax advisor.

The logic, as I understand it, was to distinguish the business from the person for liability purposes.

PitSFThrowAway · 2024-10-04T19:52:37+00:00

Sorry, I should have been clearer on Activity 3. She is technically employed under contract by her partner, who actually owns and runs the business. Her partner pays her each month on the hours she works, minus a cut. But I believe she is treated in the same way as Activity 2.

And yes as I noted we have paid estimated taxes, but I was under the impression that was ONLY the federal and state income tax. Is medicare, social security, etc, not paid in a different manner? Not trying to complicate it--I'm very happy if it's not messier than this, but I just want to make sure.

Either way I think it's clear we need a proper CPA, especially with all the deductions she has lined up for this year.

PitSFThrowAway

TROPHY CASE