Has anyone actually received a 1099-R with code 8 (no J) for an excess contribution removal? I'm dealing with something similar and my broker is telling me they'll use code P, even though I also contributed and removed in the same calendar year. I'm wondering if different brokerages handle this differently.

I went through this exact situation last year and can confirm what others have said about the distribution codes. My contribution was made in January 2023 for tax year 2022, and I removed the excess in late 2023. My 1099-R showed code 8 (not PJ) because both the contribution and removal happened in the same calendar year. The key thing I learned is that you don't need to file an amended return as long as you report the distribution correctly on your original return. Since you mentioned your brokerage adjusted for losses, make sure you report any earnings (or in your case, the small loss) appropriately. The excess contribution removal itself isn't taxable, but any earnings would be. I'd recommend double-checking with your brokerage about exactly what they'll report on your 1099-R, since different institutions sometimes handle these codes differently. But regardless of whether they use code 8 or P, the tax treatment should be the same for your situation.

A common mistake I see businesses make is forgetting about state tax implications. Even if you're handling federal taxes correctly, some states have different rules for international contractors. What state is your S Corp registered in? That can make a big difference in your filing requirements.

Great question! I've been dealing with similar international contractor payments for my consulting business. One thing I'd add to the excellent advice already given is to make sure you're consistent with your categorization across all your financial records. Since you're using Wise for payments, I'd recommend exporting their transaction reports monthly and reconciling them with your spreadsheet records. This creates a clear audit trail showing the business purpose of each payment. Also, when you collect those W-8BEN forms from your Filipino team members, consider creating a simple tracking spreadsheet with expiration dates so you know when to request renewals (every 3 years as Miguel mentioned). I learned this the hard way when I realized half my forms had expired during tax season! The $67k in payments will definitely reduce your taxable income as legitimate business expenses, so you're smart to get this documented properly now rather than scrambling later.

Does anyone know if the state filing requirements follow the same rules? My kids have investment accounts that are mostly in-state municipal bond funds that are supposedly tax-exempt for federal but taxable for state purposes.

Great question about the yearly changes! Yes, the kiddie tax thresholds do adjust annually for inflation. For 2024 tax returns (filed in 2025), the threshold is indeed $2,300 for unearned income before a child needs to file. Based on your numbers ($190 + $165 + $1,850 = $2,205 per child), you're correct that each child falls below the threshold and won't need Form 8615 this year. This is a common situation where families had to file in previous years but don't need to anymore due to the threshold increases. One thing to keep in mind: make sure you're looking at the right tax year's thresholds. The 2024 threshold ($2,300) applies to income earned in 2024, which you'll file in 2025. If you're comparing to last year when you had to file Form 8615, that would have been under the 2023 threshold, which was $2,200. Also worth noting that these Vanguard accounts will likely generate similar income patterns going forward, so it's good to stay aware of how the thresholds change each year. The IRS usually announces the inflation adjustments for the following year in the fall.

You seem to have a good grasp on the process already, which is probably going to work in your favor. In my experience, which is admittedly somewhat limited, the system updates faster when you've successfully completed the verification in a single call. It's possible, though not guaranteed, that you might see movement in as little as 5-7 business days, especially if your return is otherwise straightforward. The IRS has been, in my observation, processing these verification cases more efficiently this filing season.

I went through identity verification just last week and can share what happened in my case. The agent told me it was specifically for Form 8962 (Premium Tax Credit) verification, and she mentioned my case would be prioritized since it was a "simple authentication" rather than a full identity theft case. My timeline so far: verified on Tuesday, transcript still shows the 570 hold as of yesterday (day 6). The agent said to expect 2-3 weeks, but based on what others are saying here, it sounds like it could be sooner. One thing that might help - when you call back to check status, ask them to confirm the specific type of verification you completed. There are apparently different processing queues depending on whether it's identity theft, Premium Tax Credit, Earned Income Credit, or just general authentication. Knowing which queue you're in can give you a better timeline estimate. Good luck with yours! The waiting is definitely the hardest part.

Alternative verification options to consider: • In-person verification at Taxpayer Assistance Centers (appointment required) • Phone verification via the dedicated Identity Verification hotline • Third-party in-person verification through certain tax professionals • Online verification through ID.me (fastest option) Each has different processing times. I've found the online method typically reduces overall processing by 7-10 days compared to other methods. Hope this helps with your analysis!

This is incredibly helpful data! I've been tracking my own verification timeline and can confirm the 15-day delivery window. Filed on February 28th, got flagged for verification on March 3rd, and received my CP01 letter on March 18th - exactly 15 days later. What I found interesting is that checking my transcript daily showed the 971 code appeared 2 days before I actually received the physical letter. For anyone waiting, I'd recommend checking your transcript on the IRS website regularly since it updates faster than mail delivery. Currently waiting for my verification to process after completing it online through ID.me last week.