23 Omg this just happened to me! I worked 3 jobs last year and ended up owing $600 when I usually get a refund. I was so confused until the tax preparer explained this exact thing.

11 Yeah, it can be a really unpleasant surprise! One way to avoid this in future years is to fill out a new W-4 form at your current job and check the box for multiple jobs, or even request additional withholding. It's better to get a little less in each paycheck than to get hit with a big tax bill in April. It's one of those weird tax things nobody tells you about until you learn the hard way!

8 I tried using that last year and it was so confusing! No explanations of anything, and it doesn't do any calculations for you. Maybe it's fine if you know exactly what you're doing, but for beginners I really wouldn't recommend it.

Is there a time limit on recharacterization though? I thought the deadline was the tax filing deadline plus extensions for the year of the contribution (so for 2022 contributions, it would have been Oct 2023 at the latest).

You're absolutely right about the recharacterization deadline. The deadline is the tax filing deadline including extensions for the year the contribution was made. For 2022 contributions, that would have been October 16, 2023 (if an extension was filed). Since that deadline has passed for 2022 contributions, recharacterization is no longer an option in this case. At this point, the only options are to remove the excess contribution (plus earnings) or apply it to a future year if eligible. This is why catching these issues early is so important - it provides more flexibility in how to correct them.

That's actually a smart approach if they're eligible for 2023! Would they need to specifically notify their IRA custodian about carrying forward the contribution, or just report it that way on their tax forms?

Wouldn't that be considered a step transaction by the IRS though? From what I understand they look at the substance of transactions rather than just the form.

That's a valid concern about step transactions. The IRS can indeed look at the substance over form if they believe transactions were structured solely to avoid taxes. The key difference in what I suggested is that there would be a genuine business purpose - securing a specific needed asset that might not be available later. A properly structured lease with market terms that transfers actual usage rights to another party temporarily could potentially work. But you're right that it would need to be a legitimate arrangement and not just paperwork to achieve a tax outcome.

This is the correct answer right here - I don't know why no one else mentioned it! Section 179 deductions that exceed your business income can be carried forward indefinitely. So if your 2023 business income is too low to fully use the deduction, you can use the remaining amount in 2024.

Will the SSA site show my current year W-2 info though? I thought it only updates annually and wouldn't have my 2024 information available yet for filing in 2025?

You're right to question this - the SSA website typically doesn't show current tax year information in time for filing. It usually updates around July for the previous year's wages. So while it's a good resource for verifying past years or checking if old employers reported your wages correctly, it won't help with your current filing situation. For current year W-2s that you're missing, you'll need to contact either the employer directly or the IRS as others have suggested. The IRS typically has the current year information in their system before it appears in the SSA database.

Did they charge you any penalties or just the tax and interest? I'm in a similar situation but it's been 2 years and I haven't heard anything...

I didn't know about this! Is it too late to use VITA if I already filed once? My income definitely qualifies.

It's definitely not too late! VITA volunteers can help with amended returns too. Just bring a copy of your originally filed return, the rejection notice, and all your tax documents (W-2s, 1099s, etc.) to your appointment. Many VITA sites operate through tax season and even a bit beyond (usually until April 15th, but some go through the October extension deadline). Call before going to make sure they're still open and to schedule an appointment, as many sites get booked up quickly.

This is really important! I once got an email saying I needed to "refile" but it was literally just one box I needed to check about healthcare coverage. Took 2 minutes to fix and resubmit on the same site.