I went through this exact same situation a couple years ago and it was incredibly stressful until I figured out the right approach. The good news is you're absolutely correct - you should NOT be paying taxes on your entire $6,745 distribution. Here's what worked for me: In your tax software, look specifically for the IRA distribution section and make sure it's asking about your "basis" or "nondeductible contributions." You need to tell the software that you have $6,500 in contribution basis that's already been taxed. This is crucial because the software has no way of knowing this from just the 1099-R alone. Once you input that basis amount, the software should automatically calculate that only your earnings ($245) are subject to regular income tax. The distribution code J means you qualify for an exception to the 10% early withdrawal penalty - likely due to medical expenses based on what you mentioned. Don't skip Form 8606 Part III even if your tax software tries to - this form is what officially documents your basis and protects you from being double-taxed on future distributions. I learned this the hard way when I almost filed without it. One last tip: double-check with your IRA custodian that they have the correct contribution records on file. Sometimes there can be reporting discrepancies that cause headaches later. Better to catch any issues now before you file!

This thread has been incredibly helpful! I'm a tax preparer and see this exact confusion every single tax season. You're absolutely right to question why you'd owe taxes on the entire distribution - that would indeed be double taxation on your contributions. The key point everyone has correctly identified is Form 8606 Part III. This form is essential because it establishes your "basis" in the Roth IRA (the $6,500 you contributed with after-tax dollars). Without this form, the IRS has no way of knowing that portion was already taxed. A few additional considerations for your specific situation: 1. Since you mentioned this was for medical expenses, make sure your tax software applies the penalty exception correctly. The code J confirms an exception applies, but you want to verify it's calculating no 10% penalty on the $245 earnings portion. 2. Keep detailed records of this transaction. The IRS uses a "first-in, first-out" rule for Roth distributions, so this withdrawal reduces your contribution basis for any future distributions. 3. If you recontribute to a Roth IRA in the future, remember that you'll need to rebuild that contribution basis before any future withdrawals would be completely tax-free. The bottom line: only the $245 in earnings should be taxable income, with no penalty due to your medical expense exception. Don't let the software intimidate you into paying tax on money you've already been taxed on!

This thread has been absolutely invaluable! I'm currently dealing with the exact same issue - $112k in RSU withholdings from Fidelity that aren't showing up on my W2. After reading through everyone's experiences, I have a much clearer roadmap for tracking down this missing documentation. I'm particularly interested in trying the tax account transcript approach that Javier mentioned, since that would give me direct confirmation from the IRS that they received the withholding. Has anyone had experience with how long it typically takes for the transcript to reflect brokerage withholdings? I'm wondering if there's a processing delay I should account for. Also, I noticed several people mentioned success with contacting stock plan administrators directly rather than going through regular HR channels. For those who tried this approach, did you find the administrator's tax support team was more knowledgeable about these specific RSU withholding issues compared to general HR representatives? One thing I'm planning to do based on Joshua's advice is set up better tracking for next year's RSU vestings. This annual scramble to find tax documents is way too stressful, especially when we're talking about six-figure withholding amounts! Thanks again to everyone who shared their solutions - this community knowledge is so much more practical than anything I found in official tax guides.

This thread has been incredibly helpful for understanding RSU withholding issues! As someone new to receiving stock compensation, I had no idea this was such a widespread problem. I'm currently in my first year of RSU vestings and want to make sure I don't run into this same situation next tax season. Based on all the great advice shared here, I'm planning to: 1. Set up quarterly tracking like Joshua suggested, documenting each vesting event and where the withholding gets reported 2. Create that dedicated email folder for all RSU communications 3. Identify my company's stock plan administrator contact info now, before I need it 4. Take screenshots of my account right after each vesting as Gianni recommended One question for the group - for those who successfully resolved their missing withholding documentation, what's the best way to verify that everything is correctly reported when you actually file your return? I want to make sure I don't accidentally double-count or miss anything when the time comes. Also, is there a particular time of year when it's best to do a "mid-year check" on RSU withholdings to catch any reporting issues before they become tax season problems? Thanks to everyone who shared their experiences - this is exactly the kind of real-world guidance that makes navigating stock compensation so much easier!

I'm confused about job-related training deductions in general. Are they still deductible for employees after the tax law changes? I thought most job expenses went away unless you're self-employed?

Great point about the 1099 vs W-2 distinction! Since you mentioned you're a "security contractor," that suggests you might be getting 1099s rather than W-2s, which would make this deduction potentially viable on Schedule C as a business expense. However, even for contractors, the expense still needs to meet the "ordinary and necessary" test for your security business. The IRS looks at whether the expense is common and accepted in your trade, and whether it's helpful and appropriate for your business. If you are indeed a 1099 contractor, you'd want to document how the karate training specifically enhances your security services - maybe it allows you to take on higher-risk assignments, charge premium rates, or fulfill specific client requirements. Keep detailed records of how the skills directly apply to your contract work, not just general fitness or self-improvement. What's your employment classification? That'll determine whether this is even worth pursuing.

As someone who completed this exact transaction with my S-Corp about 6 months ago, I can confirm that 70% business use is definitely worthwhile! The general rule of thumb my CPA gave me is that anything above 50% business use makes the actual expense method potentially beneficial, but the higher the percentage, the more attractive it becomes. Regarding the spreadsheet tracking, I update mine weekly rather than monthly - it only takes about 10 minutes and keeps everything fresh in my memory. I track mileage, fuel receipts, maintenance costs, and loan payments all in one sheet with separate tabs for each category. The key is being consistent with whatever schedule you choose. For business credit, the vehicle loan actually helped my business credit profile! Since it's secured debt with regular monthly payments, it demonstrates good payment history to credit agencies. Just make sure the loan is properly reported under your business EIN rather than your personal SSN. One thing I wish I'd known upfront - consider timing this transaction at the beginning of your business fiscal year to maximize that first year's depreciation benefits. I did mine mid-year and missed out on some potential deductions. The complexity really isn't that bad once you get into a routine. The tax savings have been substantial enough that I'm planning to do the same thing with a second vehicle I use for business. Just stay organized and document everything!

This thread has been absolutely invaluable! I'm a new S-Corp owner and was completely unaware of this vehicle transfer strategy until I stumbled across this discussion. The level of detail and real-world experiences shared here has been incredible. I'm definitely planning to move forward with transferring my personal vehicle to my business after reading through all these insights. My situation is very similar to the original poster - I have a paid-off vehicle worth about $22k that I use roughly 75% for business purposes. A few key takeaways that really stood out to me: - The importance of proper documentation (fair market valuation, formal agreements, board resolutions) - Using current AFR rates for the promissory note - The potential for insurance savings when switching to commercial coverage - The need for meticulous mileage tracking with apps like MileIQ - Timing the transfer at the beginning of the tax year for maximum depreciation benefits One question I still have - for those who've been through an audit, how detailed did the IRS get when reviewing this type of transaction? I want to make sure I'm preparing the right level of documentation upfront rather than scrambling later if questioned. Also, has anyone dealt with financing the purchase through a business line of credit rather than owner financing? I'm curious if that creates any additional complications or benefits. Thanks again to everyone who shared their experiences - this community is amazing!

As someone new to this community, I want to add my confirmation to what everyone else has shared - you absolutely keep your existing EIN when filing Form 8832 to change from S-Corp to disregarded entity status. I just completed this exact transition about 3 months ago and was initially confused by the same conflicting information you mentioned. What really helped clarify things for me was understanding that Form 8832 is specifically designed for entity classification elections - if you needed a new EIN, there would be a completely different process. One practical tip I haven't seen mentioned yet: when you receive your Form 8832 acceptance letter, consider updating your business records and internal documentation to reflect the classification change. I created a simple one-page summary explaining the change that I now provide to new vendors or service providers when they have questions about my business structure. It includes the effective date, references the Form 8832, and clearly states that the EIN remained the same. This has been incredibly helpful for avoiding confusion down the road, especially with vendors who do 1099 reporting or need to verify business information for contracts. The transition itself was much smoother than I anticipated once I understood that the underlying LLC never changes - just how the IRS treats it for tax purposes.

As a newcomer to this community, I want to echo what everyone has confirmed here - you absolutely keep your existing EIN when filing Form 8832 to change from S-Corp to disregarded entity classification. I just went through this exact process last month and was initially worried about the same thing. The key insight that helped me understand this was realizing that your LLC as a legal entity never changes - only how the IRS treats it for tax purposes changes. The EIN is permanently attached to your LLC, not to its tax classification. This is actually why Form 8832 asks for your current EIN rather than having you apply for a new one. One thing I'd add that I learned during my transition: make sure to update your bookkeeping software and accounting records to reflect the classification change. Even though the EIN stays the same, you'll want your records to clearly show when the transition occurred for future reference, especially when preparing tax returns or if you ever get audited. Also wanted to mention that the IRS phone support (when you can get through) was actually quite helpful in confirming this. The agent I spoke with explained that entity classification changes via Form 8832 are specifically designed to preserve the existing EIN while changing tax treatment - it's one of the main purposes of the form. This thread has been incredibly helpful for understanding all the practical implications beyond just the EIN question. Thanks to everyone for sharing their real-world experiences!