Here's another important consideration with MTM that people often miss: if you make the election, you can't cherry-pick which securities it applies to. It applies to ALL your securities that are held in connection with your trading business. I made this mistake thinking I could keep some investments separate. You need to clearly segregate investment accounts from trading accounts BEFORE making the election. Investment positions can be excluded, but you need clear documentation.

One MTM example that helped me understand: I had $120,000 in realized gains in 2024, and on December 31st, I had $45,000 in unrealized losses and $15,000 in unrealized gains. Without MTM: Only my $120,000 realized gains would be taxable. With MTM: My taxable income would be $120,000 - $45,000 + $15,000 = $90,000. But the real benefit came the next year. Those positions that were "marked to market" started 2025 with a new basis. When I actually sold them later, I only had to pay tax on the gains from the January 1st price, not my original purchase price. Saved me from the wash sale headache too!

I messed up on this last year... I didn't file a 5500 for our S-corp health insurance arrangement (5 employees) and then got a notice from the DOL. Turns out we had set up our health insurance as a formal group plan with a third-party administrator, which technically did require a 5500 filing even though we were small. Had to file a late 5500 and pay some penalties. So definitely double-check how your health insurance is structured! Don't just assume you're exempt because you're small.

Based on what you've described - 3 employees total and paying a portion of individual health insurance premiums directly from your business account - you're very likely exempt from Form 5500 filing requirements. Since you have fewer than 100 participants and you're paying from general business assets rather than maintaining a formal plan with assets, you fall under the small employer exemption. However, Emma's experience above is a great reminder that the structure matters. If you're simply reimbursing individual premiums, that's typically a health reimbursement arrangement (HRA) which is generally exempt. But if you have a formal group plan through an insurance carrier or third-party administrator, different rules might apply. I'd recommend documenting exactly how your arrangement is structured - are you reimbursing employees for individual policies they purchase, or do you have a group health plan where you pay premiums to an insurer? Keep records of your setup in case you ever need to demonstrate your exemption status. The key is being able to show you don't have a formal ERISA plan that requires 5500 filing.

I got this letter last month too!! Found out it happened because I had a W-2 from a job I worked for only 2 weeks and forgot to include it on my return. Wasn't identity theft at all, just me messing up lol. Still had to go through verification tho.

I went through this same situation about 6 months ago and it was stressful at first, but turned out fine. The key thing to remember is that receiving an identity verification letter doesn't necessarily mean your identity was actually stolen - the IRS has become much more cautious and flags returns for various reasons. In my case, it was triggered because I had started a side gig and reported 1099 income for the first time. The verification process took about 2 weeks once I called (took me several attempts to get through), and my refund was released 5 weeks after that. Make sure you have your prior year return, current year return, and the letter when you call. Also, try calling early in the morning (8 AM) or later in the afternoon - I had better luck getting through during those times. Don't panic, this is more common than you'd think and gets resolved once you verify your identity.

Important note from someone who's been audited over this exact issue: DO NOT just pick the allocation that gives you the biggest refund without considering how it affects the other person! The IRS computers are specifically programmed to flag returns where the total PTC allocations don't match up. If you claim allocations that don't make sense (like 1% of APTC but 100% of the max credit), you're basically asking for an audit. The correct approach is to allocate based on who was actually covered by the policy and their portion of the household income.

This is exactly the kind of situation where you need to be really careful about how you allocate the Premium Tax Credit! As someone who works with tax preparation, I see this confusion all the time. The reason you're seeing such wild swings in your refund is because of how the PTC calculation works. When you allocate 1% of the APTC but claim a higher percentage of the maximum credit, you're essentially telling the IRS you received very little advance payment but are entitled to a large credit - which creates that artificial $8K+ refund. However, this approach will likely cause major problems for your father's return and could trigger an audit since the allocations need to make sense when viewed together. For your situation with $43,250 income versus your father's higher income, I'd recommend allocating based on your proportional share of the total household income that the policy was covering. If your dad makes twice what you do, something like a 33/67 split might be more appropriate than 50/50. The key is finding an allocation that reflects reality - who was actually covered by the policy and what percentage of the household income each person represents. Don't just chase the biggest refund, because the IRS will eventually catch discrepancies between family members' returns.

3 Pro tip: check the Transamerica website for an "Important Tax Information" section. After dealing with this same issue, I discovered they actually have a webpage listing the correct EINs to use for different retirement accounts they manage. The EIN on my form was outdated because they'd restructured some of their subsidiaries. Also, it's worth noting that TurboTax sometimes has these EINs in their system already. Try clicking the "help" button when you're entering the 1099-R information, and search for "Transamerica EIN" in their knowledge base.

9 Just a heads up, if you can't resolve this quickly, consider filing a tax extension using Form 4868. This gives you until October 15th to file without penalty. You'd still need to pay any estimated taxes owed by the regular deadline, but at least you won't get penalized for late filing while sorting out this document issue. I had a similar EIN problem last year with Principal Financial and it took almost 3 weeks to get the correct information. The extension saved me from late filing penalties.