This sounds promising! How long did the process take when you used the Taxpayer Advocate Service? And did you need to provide a lot of financial documentation?

The whole process took about 2 months from my initial contact to getting a revised payment plan. They do require quite a bit of documentation - I had to provide bank statements, pay stubs, a detailed list of monthly expenses, and proof of my housing costs and medical expenses. They assigned me a specific advocate who worked directly with me throughout the process. The most helpful part was having someone who could explain the various relief options in plain English and who actually seemed to care about finding a solution that worked for my specific situation. Much better than trying to navigate the general IRS channels where you rarely speak to the same person twice.

This! I switched from doing a Schedule C to forming an S-Corp after my 1099 income hit about $80k, and it saved me a ton on self-employment taxes. You still pay yourself a reasonable salary that gets employment taxes, but can take the rest as distributions that aren't subject to SE tax. Might be worth looking into if your 1099 income is substantial.

That's actually incorrect. According to IRS regulations, the deadline is for notifying the plan administrator, not completing the distribution. The regulation specifically states: "If the employee notifies the plan of the excess by April 15, the excess amount is not subject to double taxation." The actual distribution typically takes several weeks to process, but as long as the request is made by the deadline, the participant is considered compliant.

I work in benefits administration and handle these cases regularly. You're right that the notification deadline is April 15, not the distribution completion deadline - that was my mistake. What I should have clarified is that proper documentation of the notification is crucial. An email might work, but some plan administrators require specific forms to be submitted. The safest approach is to follow up with both administrators on Monday and ask them to confirm the appropriate procedure while referencing your weekend emails as initial notification.

The excess contribution amount gets added to your taxable income for the year you receive the distribution (so this current tax year, not last year). The earnings portion is also taxable in the current year. You'll get a 1099-R form showing the distribution. The good news is you avoid the 6% excess contribution penalty this way. The returned amount is technically taxed twice (once when contributed, once when distributed), but that's still better than the 6% penalty repeating every year until fixed.

What's your go-to research source? I've been using the IRS website but sometimes it's hard to navigate.

My primary research source is the actual Internal Revenue Code and Treasury Regulations when I need definitive answers. They're comprehensive but can be dense reading. For day-to-day questions, I use a combination of CCH IntelliConnect and Bloomberg Tax. They're subscription services but worth every penny for the time they save and the confidence they provide. They include practical explanations, examples, and citations to relevant code sections and cases. I also frequently check IRS publications for more straightforward explanations, though they don't cover every nuance.

Omg yes! Just had someone come to me with a MESS of a return from last year. Previous preparer had claimed random deductions with zero documentation and now they're being audited. Be confident in your research, not your memory!

Did your sister have to pay penalties? I'm worried I've been doing this wrong for years by putting everything under supplies.

No, I never got a 5498 showing my original contribution to the traditional IRA. Maybe that's part of the problem? I contributed $6,000 to the traditional IRA in January and converted it a few weeks later. Would TurboTax be confused because it doesn't see the original contribution form?

That's definitely the issue! The 5498 for traditional contributions typically comes really late (like May or June), long after tax filing season. So you need to manually enter your non-deductible contribution in TurboTax. Look for the section in TurboTax about "IRA Contributions" and make sure you've entered your $6,000 contribution as non-deductible to a traditional IRA. Then when you enter the conversion, TurboTax will understand that only the $103 above your contribution amount is taxable. Without that first step, TurboTax thinks the entire conversion amount is taxable!

I don't think I have any other IRA accounts... but now you've got me worried. How would I even check this? Is there a way to see all retirement accounts tied to my SSN?

You can check your credit report sometimes - it might show old accounts. Also check with previous employers to see if you had any 401ks that might have been auto-rolled to IRAs. The pro-rata rule is brutal and catches a ton of people doing backdoor Roths!