Just went through this exact situation with my EPD sale in my Traditional IRA last year. The key thing to understand is that while the sale itself doesn't appear on your personal tax return, you still need to monitor for UBTI implications. For your EPD K1, focus on Box 20 - specifically look for code V (Net section 751 gain) which captures the "hot assets" portion of your sale. This is the most likely source of UBTI from partnership unit sales. Also check if there's any code N (Unrecaptured Section 1250 gain) though EPD typically has minimal depreciation recapture. In my case, selling 200 units generated about $340 in UBTI (Box 20 code V), which was well under the $1,000 threshold so no additional taxes were owed. But it's important to track this annually since UBTI from all sources in your IRA gets aggregated. Pro tip: Keep records of your basis adjustments from previous years' K1s (Box 1 losses and Box 19 distributions) as these affect the gain calculation when you sell. The original poster mentioned holding for 15 years, so there's likely significant basis reduction to account for.

As someone who's been managing MLP holdings in retirement accounts for over a decade, I can confirm that the confusion around K1 reporting for IRA sales is incredibly common. The key insight that many miss is that while the sale itself doesn't flow to your personal tax return, you absolutely need to monitor the UBTI implications. For your EPD sale, here's what to focus on: 1. **Box 20 Code V** - This shows "Net section 751 gain" which represents your share of ordinary income items (the "hot assets" portion). This is the most common source of UBTI from partnership sales. 2. **Box 1** - Check if there's any ordinary business income allocated from the sale transaction itself. 3. **Aggregate tracking** - Remember that the $1,000 UBTI threshold applies to ALL sources within your IRA for the year, not just this one transaction. Since you've held EPD for 15 years, your basis has likely been reduced significantly through accumulated losses and distributions from previous K1s. This means more of your sale proceeds could be treated as gain, potentially increasing any UBTI impact. One thing I learned the hard way: even though many IRA custodians are supposed to monitor UBTI automatically, it's wise to proactively notify them if you identify any reportable amounts. I've seen cases where custodians missed the 990-T filing requirement, leading to penalties later. The good news is that EPD typically generates relatively modest UBTI on sales compared to some other MLPs, so you'll likely be well within the safe zone.

I'm experiencing this exact same issue and this thread has been such a huge relief! Filed on 2/26 with a $2,300 payment through TaxAct and it's been almost 2 weeks with no withdrawal from my account yet. Like so many others here, I've been checking my bank balance obsessively every single day, sometimes multiple times, expecting that money to just vanish. I was starting to spiral thinking I had somehow messed up the electronic payment authorization or that penalties were going to come out of nowhere. Miguel's insight about the 3-4 week processing backlog being widespread this filing season is incredibly reassuring, especially since he's seeing it firsthand across multiple clients at his tax prep office. And all the practical advice about documentation, setting up the online IRS account, and considering EFTPS for future years has been so valuable. I'm going to follow everyone's guidance here - keep that money safely in my account for at least 8 weeks, set up my online IRS account today to verify they received my return, and try to be patient with their processing delays. It's amazing how much less stressful this feels knowing we're all in the same situation and protected from penalties as long as we authorized payment on time. Thanks to everyone for sharing your experiences - you've turned what felt like a personal financial crisis into just another annoying government processing delay that we're all weathering together!

I'm experiencing this exact same issue and this thread has been incredibly helpful! Filed on 2/28 with a $3,150 payment through TurboTax and it's been about 10 days now with no withdrawal from my account. Like everyone else here, I've been obsessively checking my bank balance multiple times a day expecting the money to just disappear overnight. I was starting to worry that maybe I made an error during the electronic payment setup or that the IRS was going to surprise me with penalties later. Miguel's professional insight about the 3-4 week processing backlog being system-wide this year is so reassuring - it really helps to hear from someone working in tax prep who's seeing this pattern across multiple clients. All the practical advice about keeping documentation, setting up the online IRS account, and considering EFTPS for next year has been invaluable. I'm going to follow everyone's guidance here - keep that money safely untouched in my account for at least 8 weeks, set up my online IRS account today to confirm they received my return, and try to practice patience with their processing delays. It's amazing how much less stressful this feels knowing we're all protected from penalties as long as we authorized payment on time. Thanks to everyone for sharing your experiences and solutions - you've transformed what felt like a potential disaster into just another frustrating government delay that we're all navigating together!

Has anyone dealt with the situation where the employee already filed their taxes before we discovered the withholding was incorrect? One of our employees exercised NSOs in December, we underwithheld, and she's already filed her return using the incorrect W-2 we provided. Do we need to issue a corrected W-2 or is there another way to handle this?

This is exactly the kind of situation that makes startup HR so challenging! I went through something very similar last year with our NSO exercises. One thing that helped me was creating a simple spreadsheet to track all the moving pieces - employee name, exercise date, number of shares, strike price, FMV at exercise, total spread (taxable income), and then columns for each tax component (federal income, state, Social Security, Medicare, any local taxes). This made it much easier to see where the discrepancy was coming from. In our case, we discovered that Carta was using a flat 22% supplemental wage rate for federal withholding, but some of our higher-earning employees should have been subject to the 37% rate since their total annual income exceeded certain thresholds when combined with the NSO income. Also double-check if your state has any special rules for equity compensation - California, for example, has some quirky requirements that can throw off calculations. The key is getting both platforms to show you their exact calculation methodology line by line. Don't let them just give you totals - demand the breakdown. Once you have that, the discrepancy usually becomes obvious. Good luck! This stuff is unnecessarily complex but definitely solvable with some persistence.

Check if your child has an ITIN instead of an SSN. This happened to me on March 1st. My child was born outside the US. Had an ITIN from 2021. Got an SSN on January 12th, 2023. IRS systems hadn't updated. Had to use the ITIN for 2023 filing. Will use SSN for 2024 taxes. Deadline is April 15th. Don't wait too long to resolve this.

I went through this nightmare last filing season and it turned out to be a timing issue with the IRS databases. Since you mentioned your child's SSN worked fine for business paperwork and school registrations, but this is happening during tax filing, there's likely a lag between when the Social Security Administration updates their records and when the IRS system syncs up. The fact that you filed successfully in April 2023 but are having issues now in March suggests the IRS might be running validation checks against an outdated database snapshot. Try calling the IRS Practitioner Priority Service line early morning (7 AM EST) - they can manually verify the SSN status in real-time and tell you if there's a systemic issue. Don't keep resubmitting electronically as it may flag your return for additional review.

Thanks everyone for all the detailed help! I was the original poster (Aria) and I'm happy to report I found the direct deposit section thanks to your guidance. You were absolutely right - it's in the "Review & File" section under "Refund Method" and only shows up after you complete all the tax questions. I almost missed it because I was so focused on just following the step-by-step interview process. The tip about checking the summary page to confirm it shows "Direct Deposit to Account ending in XXXX" was clutch - gave me peace of mind before hitting submit. Just filed successfully with direct deposit set up for my $1,870 refund. Fingers crossed it comes through as quickly as some of you mentioned (18 days sounds amazing). This community is awesome - saved me from potentially waiting months for a paper check!

Just want to echo what everyone else has said about FreeTaxUSA hiding the direct deposit section! I had the same issue two years ago and ended up getting a paper check because I couldn't find where to enter my bank info. It's definitely not intuitive that you have to complete ALL the tax prep steps first before the refund options even appear. One thing I'd add that I don't think anyone mentioned - if you're married filing jointly, make sure the bank account is in at least one spouse's name that matches the return. I learned this the hard way when my refund got rejected because we used my wife's maiden name account but filed under her married name. The IRS is pretty strict about name matching for direct deposits. Also, for anyone worried about timing - FreeTaxUSA processes just as fast as the expensive software. My refunds through FreeTaxUSA have consistently arrived in 2-3 weeks with direct deposit, same as when I used TurboTax. The IRS doesn't care which software you used, they all go through the same e-file system.