This entire discussion has been incredibly helpful! As someone new to both this community and 401k planning, I was feeling overwhelmed trying to understand why my W2 Box 1 didn't match my mental calculations. What I've learned from reading everyone's experiences is that the answer to "Does Box 1 include 401k contributions?" is actually "It depends on what TYPE of 401k contributions you're making." Traditional 401k contributions are excluded from Box 1 (reducing your taxable income), but Roth 401k contributions are included in Box 1 since they're made with after-tax dollars. The key takeaways for anyone else in this situation: - Check your 401k provider's website for traditional vs Roth contribution breakdown - Don't forget OTHER pre-tax deductions like health insurance, HSA, parking benefits - Compare your final paystub YTD totals to your W2 rather than doing manual calculations - Look for auto-escalation features or mid-year changes to contribution rates - Remember that employer matching doesn't affect Box 1 but shows up in Box 12 I'm planning to set up a tracking spreadsheet for next year and be more intentional about understanding my benefit elections during open enrollment. Thanks to everyone who shared their experiences - this community is incredibly knowledgeable and helpful!

This has been an incredibly thorough and educational thread! As someone who just joined this community and is dealing with my first 401k, I was initially frustrated trying to figure out why my Box 1 amount seemed "wrong." Reading through everyone's experiences has made it clear that this is actually a very common confusion point, and there are so many variables beyond just "did my 401k contributions get deducted or not." The traditional vs. Roth contribution split that many people discovered they had without realizing it seems to be a huge factor. I really appreciate how everyone shared their specific numbers and problem-solving approaches. The step-by-step detective work that several people outlined (checking 401k provider websites, comparing final paystub YTD totals, accounting for ALL pre-tax deductions) gives those of us new to this a clear roadmap to follow. The spreadsheet tracking idea for next year is something I'm definitely implementing, along with being more careful during open enrollment to understand exactly what types of contributions and deductions I'm signing up for. Thanks to this community for turning what felt like an impossible puzzle into something manageable!

This is a complex situation that definitely requires careful handling. Based on what others have shared, here are a few additional points to consider: **Documentation is key**: Make sure you keep every piece of paperwork from the raffle organization, including any materials that describe how they determined the $62,500 value. This could be important if you need to dispute the valuation later. **Consider the timing of your sale**: Since you're selling immediately, you might want to get multiple purchase offers to document that $59,000 is indeed the fair market value. Having 2-3 offers around the same price range could strengthen your position. **Don't forget about self-employment tax**: Depending on how the IRS classifies this income, you might also be liable for self-employment taxes on top of regular income tax. This is less common with prize winnings, but worth confirming with a professional. **State registration considerations**: Even though you're in Texas with no state income tax, you'll still need to consider vehicle registration and title transfer costs. These aren't deductible but are real expenses that eat into your proceeds. The advice about setting aside 35% seems prudent given all the potential tax implications. Better to overestimate and have money left over than scramble to find additional funds at tax time. Good luck with this situation - winning should be exciting, not stressful!

I've been following this thread and there's some really solid advice here, but I want to add a few practical considerations that might help: **Get everything in writing from the raffle organizers**: Before you do anything, ask them for a detailed breakdown of how they arrived at the $62,500 valuation. Was it MSRP, dealer invoice, or actual market research? This documentation could be crucial if you need to challenge the amount later. **Consider the timing of your quarterly payments**: Since you won recently, your first estimated payment would likely be due January 15th for Q4 2024. But given the size of this income, you might want to make a payment sooner to avoid underpayment penalties. The IRS generally expects payments within the quarter you receive the income. **Don't overlook AMT implications**: With a sudden $62,500 income spike, you might trigger Alternative Minimum Tax calculations. This is another reason why professional help is worth the cost - AMT can add unexpected complexity to your tax situation. **Document EVERYTHING**: Keep records of all costs associated with this situation - appraisal fees, tax preparation costs, even storage or insurance costs while you arrange the sale. While most won't be deductible, having detailed records shows you're handling this professionally. The 35% cash reserve recommendation is spot-on. This situation has enough moving parts that professional guidance isn't just helpful - it's essential for protecting yourself from costly mistakes.

Hey Chloe! I totally get why you're freaking out - that message is super confusing and scary when you first get it. But honestly, you can breathe easy now! I got that exact same "return closed" message from Input Correction ERS/Rejects about a month ago and was having a full panic attack thinking they denied my refund. Turns out it's actually GOOD news! When they say "closed the return" they mean they finished fixing whatever issue was holding up your return - not that you're denied. The ERS team (Error Resolution System) handles returns that need manual review or corrections. So this message basically means "we found the problem, we fixed it, and now your return can move forward for processing." The 8:59 PM timing is totally normal too - their system sends these automated updates whenever they complete their review, even super late at night. Mine came at like 11:30 PM and I thought that was sus too lol. I ended up getting my refund deposited exactly 13 days after getting that message. Don't reply since they said not to - just keep checking Where's My Refund every couple days and your bank account. Your money is definitely coming! The waiting sucks but you're actually in the home stretch now 💰🙏

I went through the exact same thing about 2 months ago and completely understand your panic! That "return closed" message from Input Correction ERS/Rejects is actually really good news, even though the wording is terrible. It means they finished reviewing whatever flagged your return and cleared it for processing - definitely NOT a denial! The ERS (Error Resolution System) team handles returns that need manual corrections or additional review. When they say "closed" they mean they completed their work and resolved whatever issue was causing the delay. It's like closing a support ticket after fixing the problem. The late night timing (8:59 PM) is totally normal for their automated system - mine came at 2:17 AM and I thought it was sketchy too lol. They just send these updates whenever they finish processing cases, regardless of the time. I got my refund deposited exactly 10 days after getting that message. Don't reply since they specifically said not to - just keep checking Where's My Refund every few days and watch your bank account. You're actually in the final stretch now! The hardest part (waiting for manual review) is over. Your money is definitely coming! 💰🙏

Does anyone know if IRS Form 3922 helps with these calculations? My employer provides this form for ESPP purchases but I'm not sure how to use it for tax filing.

This is exactly the kind of confusion that trips up so many people with ESPP taxes! I went through the same thing last year and made the mistake of using the subscription FMV instead of the purchase date FMV for my disqualifying disposition. The key thing to remember is that with a disqualifying disposition (selling within one year), you're essentially being taxed on the full "bargain element" - which is the difference between what the stock was actually worth when you bought it versus what you paid for it. In your case, that's $89.50 - $65.42 = $24.08 per share. The 15% discount from the subscription price is just how the ESPP program works, but for tax purposes, the IRS cares about the actual market value on the day you purchased the shares. Your ESPP Disposition Summary is correct showing $758.78 as ordinary income. One thing that helped me was keeping detailed records of all the dates and prices involved. The timing of ESPP purchases can be confusing because there's the offering period start date, the purchase date, and then your sale date - and different FMV prices apply to each for different parts of the calculation.

Mohammed's breakdown is exactly the right approach! I've been using a similar cell-by-cell method for years and it's so much clearer than trying to cram everything into one formula. One thing I'd add is to include a validation cell that checks if your total taxable amount exceeds 85% of your benefits - it should never go above that threshold. I use: =IF(D10>B30*0.85,"ERROR: Check calculation",D10) Also, for anyone who needs to handle mid-year benefit start dates, you'll need to prorate the thresholds based on the number of months you received benefits. The IRS has specific rules about this in Publication 915. The cell-by-cell approach also makes it easy to create scenarios - I have multiple columns for different income assumptions so I can see how various withdrawal strategies from my 401k affect my Social Security taxation. Really helps with year-end tax planning!

This is such a helpful thread! I've been putting off updating my tax planning spreadsheet because the Social Security taxation rules seemed so daunting, but seeing everyone's different approaches gives me confidence I can tackle this. I really like Mohammed's step-by-step breakdown - breaking it into separate cells makes so much more sense than trying to create one monster formula. And NeonNomad's validation cell is brilliant for catching errors. For anyone else who's been intimidated by this calculation, I think the key takeaway is that you don't need to understand every nuance of the tax code to build a working spreadsheet. Following the IRS worksheet line-by-line in Excel cells seems like the most reliable approach. One question for the group: does anyone account for state taxes on Social Security in their planning spreadsheets? I know some states don't tax SS benefits at all, but others have their own rules. I'm in Colorado and trying to figure out if I need separate calculations for state vs federal. Thanks everyone for sharing your formulas and approaches - this community is incredibly valuable for navigating these complex tax situations!