I did get a state tax refund actually, but it was only around $340, not the $3,750 showing on the form. And I'm pretty sure it's showing in Box 1 which says "unemployment compensation" so I don't think that's it. But thanks for the suggestion, I wouldn't have thought to check that.

If it's definitely showing in Box 1 as unemployment compensation, then you're right, it's not the tax refund. At this point, you need to contact the state agency directly as the others suggested. One other thing to check - look at the form carefully and make sure it's actually from your state's official unemployment agency. There have been some scams where fake 1099-Gs are sent out to trick people into providing personal information.

This is really good advice. My brother had a similar issue in 2023 and the documentation was what saved him. The unemployment office initially denied there was any error until he showed them his complete employment history and bank statements. They eventually fixed it but it took nearly 3 months.

It's unfortunately becoming a common problem. Another tip: pull your free credit report immediately to see if there's any other suspicious activity. Sometimes unemployment fraud is just one part of larger identity theft. You may want to place a fraud alert on your credit file too while sorting this out.

What's the difference between a tax preparer and a CPA? Would a regular tax preparer be able to handle real estate investments from another country or is that something only a CPA should handle?

A CPA has more extensive education, passed the CPA exam, and maintains specific continuing education requirements. Tax preparers like me have various levels of certification (I'm an Enrolled Agent which means I'm licensed by the IRS). For international real estate investments, I would strongly recommend a CPA with specific experience in that area. While some experienced EAs could handle it, CPAs typically have more training with complex international tax issues. Foreign real estate can involve foreign tax credits, FBAR filings, and other complex reporting requirements that go beyond basic tax preparation. This is definitely a situation where expertise matters more than price.

This depends entirely on the complexity. For simple returns, sure. But for real estate investments, especially with foreign ownership, earlier meetings can be crucial for gathering all the required documentation. Sometimes these returns require information that takes weeks to track down.

Where exactly do you report the Roth vs traditional breakdown? I have both in my solo 401k but can't seem to find where this goes on the 5500-SF. Is it in Part III?

You'll need to complete Part VI of Form 5500-SF if you have both Roth and traditional components. Look specifically at line 11a and 11b where it asks about pre-tax and designated Roth contributions. The total combined value goes on line 7 of Part III, but the breakdown between traditional and Roth gets reported in Part VI. It's easy to miss because most of the solo 401k guidance focuses on the asset reporting and not this specific detail.

I was about 3 months late filing mine last year and did get a notice with a proposed penalty. I called and explained that as a small business owner I wasn't aware of the requirement, and they actually waived the penalty completely. I think first-time abatement is pretty common. Just don't ignore it!

That's a relief to hear! Did you have to submit anything in writing or was the phone call enough to get the penalty waived? I'm about 6 weeks late at this point.

I hadn't even thought about checking my Social Security statement! Just logged in and interestingly there's no record of that employer or the $78k on my Social Security earnings record. Does that mean it's more likely just an IRS error than actual identity theft? Should I still follow all the identity theft steps everyone mentioned or is there a faster way to resolve this?

If it's not showing up on your Social Security earnings record, that's actually good news! It suggests it's more likely an IRS processing error rather than someone actually using your info to work somewhere. I'd still take precautions like monitoring your credit, but you might be able to resolve this more quickly by calling the IRS and specifically telling them it appears to be a processing error since the income doesn't appear on your Social Security record. Ask to speak with someone in the Wage and Income department rather than Identity Theft. In my case, they were able to remove the incorrect W-2 and release my refund within about 6 weeks of identifying the error. Still frustrating, but faster than the full identity theft resolution process!

Smart advice! But how do you approach a company you've never worked for? I'm dealing with a similar issue and worry they'll just ignore me since I'm not an employee.

That's really helpful to hear a real-world example! Did you have to do anything special on your tax return to document the rollover and subsequent withdrawal? And did your 401k plan administrator automatically provide that contribution/earnings breakdown, or did you have to specifically request it?

You'll receive a 1099-R from your 401k provider showing the total distribution, and you'll need to report the rollover on your tax return. For the withdrawal, you'll get a 1099-R from your IRA custodian the following year. I didn't need to file any special forms since my withdrawal was less than my total contributions, but I did keep detailed records of my basis. My plan administrator provided the contribution/earnings breakdown automatically as part of the distribution paperwork. If yours doesn't, definitely request it - you need this documentation to establish your basis. Some administrators have this readily available, while others might require you to specifically ask for a "distribution statement showing contribution and earnings portions.

Wait I'm confused. So if I open my first ever Roth IRA today at age 55, then immediately roll over my Roth 401k that I've had for 20 years, I still have to wait until age 60 to access the earnings tax-free even though I'll be past 59.5?

That's exactly right. The 5-year rule for Roth IRA earnings requires that your first Roth IRA was established at least 5 tax years ago AND you're 59½ or meet another exception (disability, first-time home purchase, etc.). So in your example, if you open your first Roth IRA at 55 and roll over your 20-year Roth 401k, you could access all the contribution portions immediately without tax or penalty. However, for the earnings to come out tax-free, you'd need to wait until both: 1) you're 59½ (which you already are), and 2) it's been 5 tax years since you established your first Roth IRA - so that would be at age 60.