Don't forget about state taxes! Even though you're focused on federal filings, some states can be really aggressive about claiming you as a resident if you were born there or previously lived there. California is notorious for this. Since you mentioned you were born in Texas, you're actually lucky because Texas doesn't have state income tax, but if you'd been born in California or New York, you might have had additional state filing requirements to deal with.

Has anyone mentioned the exit tax if you want to renounce your citizenship? With investments over $50k, you might be considered a "covered expatriate" which has tax consequences if you decide to give up your US citizenship later.

14 Just wanted to add something important - the 8606 form is absolutely critical for Backdoor Roth conversions regardless of what code is on your 1099-R. I've been doing backdoor Roth conversions for 7 years and here's what I've learned: 1) Form 8606 establishes your "basis" in your traditional IRA, which is essential for tax-free conversion 2) Without it, the IRS assumes your entire conversion is taxable 3) There's a $50 penalty for not filing it, but the bigger issue is potentially paying taxes twice on the same money 4) You need to file it EVERY year you do a conversion The distribution code debate is secondary to making sure you have proper documentation with Form 8606. I'd recommend filing an amended return ASAP.

9 Edward Jones is 100% right on this. I'm a tax preparer and see this confusion all the time. Code 2 means "Early distribution, exception applies" which is EXACTLY what a backdoor Roth conversion is - it's technically an early distribution but exempt from the 10% penalty. Code B is for "Designated Roth account distribution" which is for EMPLOYER plans like 401ks, not IRAs. Your CPA has mixed up retirement account types. I'd suggest: 1. File an amended return ASAP with Form 8606 2. Consider finding a new CPA who understands Backdoor Roth conversions 3. In the future, specifically tell your tax preparer about any special situations like this

For anyone who finds this thread later - I recommend planning ahead for next year! Set a calendar reminder 2-3 weeks before the deadline. I've been using the IRS-approved "Free File Fillable Forms" for my 7004 extensions which is completely free, but you need to set up an account ahead of time and it can be a bit clunky to use if you're rushing.

Don't forget that filing an extension only extends your time to FILE, not your time to PAY any taxes due. Make sure you're still paying your estimated tax liability by the original deadline to avoid penalties and interest, even if you're extending the actual filing.

One thing nobody mentioned yet - since your wife is now getting 1099-Ks, she should consider treating this as an actual small business going forward if she's going to continue selling. That means: 1. Track all expenses separately 2. Consider filing for a business tax ID instead of using her SSN 3. Keep good inventory records from the start 4. Set aside about 15-20% of profits for estimated tax payments I started selling vintage medical equipment on eBay as a side hustle in 2022, and it's so much easier when you treat it as a business from day one rather than trying to sort it out later.

Don't overthink this. I've been selling on eBay for 15+ years. The 1099-K is just reporting the money that went through their platform. It doesn't mean you owe taxes on that full amount. Your wife needs to file Schedule C with the 1099-K amount as her gross receipts, then deduct: - Cost of goods sold (what you paid originally) - eBay fees - Shipping costs - Packaging materials - Home office if you qualify - Portion of internet/phone used for business - Mileage for post office trips Regarding documentation - credit card statements, bank records, or even photos of the items with notes about purchase price are better than nothing. The IRS just wants to see you made an honest effort. And they absolutely don't care that you bought it and she sold it - married couples share property all the time.

Just a reminder that PPP has specific requirements for forgiveness. Make sure you're documenting how you use the funds! For sole props with no employees, it's actually pretty straightforward: You can claim up to 8 weeks of your average weekly net profit from Schedule C as "owner compensation replacement" (this would be your entire loan amount if you have no other eligible expenses). Keep records showing you transferred the PPP funds to a personal account as "owner compensation" over an 8-24 week period. The remainder can be used for business rent, utilities, etc. but keep ALL receipts and documentation. Some lenders are really scrutinizing sole prop forgiveness applications.

Has anyone actually received PPP as a sole proprietor without employees and also having a W2 job? I'm in the exact same boat (full-time job + side business as sole prop) and my bank (Chase) keeps giving me the runaround saying I don't qualify. They're saying because I have W2 income, my side business hasn't been "substantially affected" enough to qualify.