I'm dealing with this exact same problem right now after switching jobs in September! The timing couldn't be worse - I've already maxed out my Social Security contributions at my previous employer, but my new company's payroll system has no visibility into that. After reading through all these suggestions, I think the most practical approach is definitely the W-4 adjustment strategy that several people mentioned. I calculated that I'll be overwithholding about $2,800 in OASDI taxes between now and year-end, so I'm planning to adjust my federal income tax withholding to reduce it by roughly that amount. At least that way I'm not giving the government a completely interest-free loan while waiting for tax season. One thing I wanted to add that I haven't seen mentioned - if you're using direct deposit, consider having the amount you expect to get back automatically transferred to a high-yield savings account each pay period. That way you're at least earning some interest on money that's rightfully yours while waiting for the tax system to catch up. Has anyone had success getting their employer to make mid-year adjustments to base salary to compensate for this? I know it's a long shot, but for companies that really want to retain talent, it seems like the kind of thing they might consider, especially since they're overpaying their matching portion too.

I'm going through this exact same frustrating situation right now! I switched jobs in late August and I'm already seeing the OASDI overwithholding hit my paychecks. It's maddening that there's no mechanism for employers to communicate about this stuff. After reading through all these responses, I'm definitely going to try the W-4 adjustment strategy to reduce my federal income tax withholding. I've calculated that I'll be overwithholding about $2,100 in Social Security taxes by year-end, so reducing my federal withholding by a similar amount should help with the cash flow impact. One thing I'm curious about - has anyone tried submitting documentation to their payroll department showing they've already hit the OASDI limit at a previous employer? I know legally they still have to withhold, but I wonder if some companies might be willing to work with you on timing (like maybe processing your bonus payments in January instead of December to minimize the overwithholding period). Also, for anyone tracking this stuff, I'd recommend setting up a simple spreadsheet with your pay dates, gross pay amounts, and OASDI withholdings from both employers. It makes it much easier to see exactly when you hit the limit and calculate your expected refund. Plus you'll have all the documentation organized when tax season rolls around. The system definitely needs to be modernized to handle job changes better, but at least knowing there are some workarounds helps reduce the stress!

I've been following this thread with great interest since I'm dealing with a similar LLC sale situation. Based on what you've shared about it being an LLC taxed as partnership selling to a C-Corp, your accountant might be correct about the different tax treatment. The key issue is that when a partnership interest holder receives stock from a C-Corp buyer, it often doesn't qualify for the same favorable treatment as a straight asset sale. The stock portion might be viewed as a taxable exchange rather than a sale, which could result in ordinary income treatment depending on how it's structured. However, there are still ways to potentially optimize this. Look into whether the transaction can be structured as an installment sale for the stock portion, which might help spread the tax impact over time. Also, make sure your Section 1060 allocation clearly separates goodwill from any other intangible assets - sometimes what gets lumped together as "goodwill" actually includes other items that have different tax treatment. Have you considered getting a second opinion from a tax attorney who specializes in business transactions? The tax implications are significant enough that it might be worth the additional professional fees to explore all options before finalizing.

The LLC partnership structure definitely complicates things compared to a corporate sale. When you're selling partnership interests to a C-Corp buyer, the stock portion often can't benefit from the same favorable tax treatment as a straight asset sale. For installment sale treatment on the stock portion, you'd typically need the buyer to agree to certain payment terms or restrictions on the stock transfer. This isn't something you can just elect on your tax return - it has to be structured properly in the purchase agreement itself. Regarding Section 1060 allocation, you absolutely should separate different intangible assets. Customer relationships, non-compete agreements, trade names, and goodwill are all different asset classes with potentially different tax treatment. What many people lump together as "goodwill" often includes customer lists (Class VI) or covenant not to compete (ordinary income). True goodwill is the going concern value and reputation of the business that can't be attributed to any other specific asset. Getting this allocation right can make a significant difference in your tax outcome. I'd strongly recommend having a business appraiser help document the allocation if the amounts are substantial. Given the complexity of your LLC-to-C-Corp transaction, a second opinion from a tax attorney specializing in business sales might be worth the investment before you finalize everything.

I've had 3 partnerships with negative basis issues. Your basis includes your share of partnership liabilities, so check if: 1) Your share of liabilities decreased significantly 2) You took distributions when profits were minimal 3) The partnership claimed large depreciation deductions

This is exactly why partnership taxation can be so tricky for investors who aren't familiar with the rules. Your situation is unfortunately quite common, especially in real estate partnerships or businesses that distribute cash from refinancing. The key thing to understand is that your $160,000 capital account and your tax basis are completely different numbers. Your capital account shows your economic rights in the partnership, but your tax basis determines the tax consequences when you exit. If you received distributions over the years (especially from that refinancing you mentioned), those distributions reduced your tax basis even if the partnership was showing losses on paper. Once your basis hit zero, any additional distributions created negative basis. When you sell your partnership interest with negative basis, that negative amount becomes taxable gain - even though economically you're walking away with less than you invested. It's essentially the IRS collecting tax on those prior distributions that exceeded your basis. The good news is that if you can reconstruct your basis properly, you might find some adjustments that could reduce the gain. Make sure your CPA has accounted for all debt allocations, any Section 754 elections, and properly applied loss limitations from prior years.

Important note from someone who messed this up last year - don't forget to check if your country has a tax treaty with the US! I'm from the Netherlands and found out too late that there are special provisions that could have saved me money on my US taxes. Also make sure you tell your broker you're a non-resident alien by submitting a W-8BEN form. If you don't, they might withhold at the wrong rates or report your income incorrectly.

This is such a helpful thread! I'm also on F1 and was totally panicking about the 30% rate. Just to add one more point that helped me - if you're using multiple brokers (like I have both Robinhood and Fidelity), make sure you submit the W-8BEN form to ALL of them. I made the mistake of only doing it for one account and ended up with incorrect withholding on my dividends from the other broker. Had to file for a refund which was a huge hassle. Also, keep really good records of all your trades and any tax documents (1042-S forms, etc.) because as non-resident aliens we sometimes get different tax forms than regular US taxpayers, and you'll need them all when filing your 1040NR. The effectively connected income treatment for capital gains is definitely the key thing to understand - it was such a relief to learn my gains weren't subject to that flat 30% rate!

I went through this exact same situation last year and totally understand your stress! The CP30 notice is confusing even for people who think they're doing everything right with their taxes. One thing that really helped me was understanding that the IRS has safe harbor rules. If you paid at least 100% of last year's tax liability through estimated payments and withholding (or 110% if your prior year AGI was over $150,000), you shouldn't owe any penalty even if you end up owing more tax when you file. The key is to look at your total payments for the year versus what you actually owed. Sometimes people get these notices even when they technically shouldn't if their payments were properly applied. Before you panic about the penalty amount, I'd suggest calling the IRS (or using one of those callback services others mentioned) to verify that all your estimated payments were properly credited. In my case, one of my online payments had been applied to the wrong tax year, which caused the penalty calculation to be wrong. Also, definitely ask about first-time penalty abatement if you've been compliant for the past few years. The IRS is usually pretty reasonable about waiving penalties for people who made an honest mistake and have a good payment history. Don't stress too much - this is more common than you think and there are usually ways to resolve it!

I'm dealing with a similar CP30 situation right now and your post really resonates with me! The self-employment tax world is so confusing, especially when you think you're doing everything correctly. One thing I learned from my tax preparer is that the CP30 penalty calculation uses what's called the "required installment method." Basically, the IRS looks at each quarter separately and calculates whether you paid enough for that specific period. Even if your total payments for the year were sufficient, you can still get penalized if the timing was off. For example, if you made smaller payments in Q1 and Q2 but then made up for it with larger payments in Q3 and Q4, the IRS will still penalize you for the early quarters being short - even though your annual total was correct. The good news is that as others mentioned, first-time penalty abatement is definitely worth pursuing. I've heard the IRS is pretty reasonable about it if you can show you made a good faith effort to comply and this was genuinely your first mistake. Also, make sure to double-check that all your estimated payments were properly credited to your account and the right tax year. Payment processing errors happen more often than you'd think, and sometimes these notices are issued incorrectly. Hang in there - you're definitely not alone in finding these notices overwhelming!