Just wondering - have you considered waiting until next year to sell some of the shares? If you hold them in your brokerage account for a year before selling, wouldn't that remove any confusion about the long-term status?

Great thread! I'm going through a similar situation with my NUA distribution. One thing I'd add is to make sure your former employer properly coded the distribution on their end too. I found out the hard way that if the 401k administrator doesn't mark it correctly as an "NUA-eligible distribution," it can create problems downstream even if you do everything else right. The distribution needs to be part of a "qualifying event" (like retirement or separation from service) and needs to be a lump-sum distribution of your entire account balance within one tax year. Also, double-check that you didn't accidentally have any company stock in a Roth 401k portion - those shares don't qualify for NUA treatment and need to be handled differently. The rules are pretty strict about what qualifies, so it's worth confirming all the boxes are checked before you start selling shares. The good news is once it's done correctly, you'll have a lot more flexibility in managing your tax burden when you do decide to sell!

Did anyone mention that you CAN actually "pay yourself" for labor on a business vehicle if you have the right structure? I'm a mechanic with an S-corp and I've been paying myself as an employee to work on company vehicles. Company pays me, company deducts it as an expense, I report income on my personal return. My accountant confirmed this is legit if done properly with proper documentation and reasonable rates. You need the right business structure though.

Great question! As someone who's dealt with similar situations in my own small business, I can confirm what others have said - you unfortunately can't deduct your own labor costs even when working on business vehicles. The IRS is pretty strict about this because no actual cash expense occurred. However, don't overlook some other potential deductions that might apply to your situation: - If you have a dedicated workspace at home for your business (even just for paperwork, ordering parts, etc.), you might qualify for the home office deduction - Tools and equipment used for the repairs can be deducted or depreciated - Any training or certification costs to maintain your mechanic skills - Professional subscriptions, trade publications, or software related to your work Also, keep detailed records of everything! Even though you can't deduct the labor, having documentation of the work you performed, time spent, and fair market value could be helpful if you ever get audited - it shows you're running a legitimate business operation. The $3,200 in parts is definitely deductible as you mentioned, and that's still a significant write-off. Sometimes focusing on what we CAN deduct rather than what we can't helps put things in perspective.

Has anyone mentioned the statute of limitations here? The IRS generally has a 3-year statute of limitations for auditing returns. If these K-1s were for 2015-2021 but only issued in 2023, some of those years might be outside the normal assessment period. You might want to check if you need to file amended returns for those older years. If you do, you'll be paying taxes on income from 7+ years ago, which seems crazy unfair.

This is a really complex situation that unfortunately highlights how partnership taxation can create unfair outcomes for individual partners. Based on what you've described, it sounds like you may have strong legal grounds to pursue the distributions. The key issue here is that partnership tax law generally requires that if income is allocated to a partner (as shown on the K-1), there should be corresponding economic rights to that income. The fact that there's no written agreement limiting distributions and that the company told your husband everything would be "wrapped up" when he left actually works in your favor. A few immediate steps I'd recommend: 1) Document everything - save all K-1s, emails, and any communications about this issue, 2) Consider consulting with a business attorney who specializes in partnership disputes (many offer free consultations), and 3) Look into whether your state has specific protections for partners against phantom income situations. You might also want to contact your state's bar association for referrals to attorneys who handle partnership tax disputes on contingency - meaning they only get paid if you recover funds. Given that you're owed $48,000, this could be worth pursuing legally even after attorney fees. Don't give up on this. Companies can't just allocate income for their tax purposes while keeping all the cash without proper documentation allowing it.

I'm dealing with this exact same nightmare right now! PayUSAtax took my payment for Q4 2024 estimated taxes back in January, and it just vanished from both their system and the IRS records about two weeks ago. I've been on hold with them for literally hours every day with no success getting through to anyone. Reading through all these responses, it sounds like I need to stop waiting for PayUSAtax to fix this and start being more proactive. I'm going to file complaints with both CFPB and BBB today, and also call my credit card company to start a dispute. The advice about calling the IRS early morning is something I hadn't thought of - I'll try that tomorrow at 7 AM to get documentation that they have no record of my payment. Has anyone had luck with getting penalty and interest relief from the IRS once this kind of situation gets resolved? I'm worried that even if I get my original payment processed eventually, I might still be on the hook for late payment penalties since the IRS never received it by the due date. I did make a backup payment directly to the IRS to cover myself, but I'm still stressed about potential penalties on the "missing" payment period. This whole experience has definitely taught me to stick with IRS Direct Pay going forward. These third-party processors seem to create more problems than they solve.

I went through this exact same issue with PayUSAtax about 8 months ago and it was absolutely maddening! My payment showed as "processing" for over a month before completely disappearing from both systems. What I learned through that nightmare experience is that you need to act on multiple fronts simultaneously rather than waiting for one approach to work. Here's what I'd recommend doing immediately: 1) File complaints with both CFPB and your state attorney general's office today - don't wait. 2) Contact your bank/credit card company to initiate a dispute since PayUSAtax failed to deliver the service they charged you for. 3) Call the IRS first thing tomorrow morning (7 AM sharp) to get written confirmation they have no record of your payment. The breakthrough for me came when I stopped treating this as a "customer service" issue and started treating it as a contract dispute. PayUSAtax took your money with the promise of transmitting it to the IRS, and they failed to deliver that service. That's breach of contract, not just a technical glitch. Also, document every single call attempt you make to PayUSAtax - date, time, how long you waited, etc. This shows you made good faith efforts to resolve it directly with them before escalating. The regulatory complaints and bank disputes will get their attention much faster than being polite on hold for hours. Don't panic about the double payment - once this gets sorted out, the IRS can either refund the overpayment or apply it to next year's taxes. You did the right thing protecting yourself from penalties by making the backup payment.

This is such a helpful breakdown! I'm in a similar situation as a Michigan resident who's been shopping around for affordable tax software this year. The timing of your post is perfect since I was literally about to start with 1040.com today. Your experience with their Michigan state forms not being ready is exactly the kind of roadblock I want to avoid. I always try to file early to get my refund quickly, so spending hours on federal only to get stuck on state would be incredibly frustrating. The FreeTaxUSA W2 PDF import feature sounds like it would save me significant time too. I have three W2s this year from different employers, and manually typing all those numbers is always tedious and error-prone. Even with occasional OCR mistakes, that automation would be worth it. At $19 total for both federal and state, FreeTaxUSA seems like the clear winner here. I was paying around $80 with TurboTax last year for essentially the same functionality. Thanks for doing the legwork and sharing your experience - you just saved me from making the same 1040.com mistake!

This is incredibly helpful, especially the Michigan-specific details! I was literally about to start with 1040.com this weekend after seeing it on the IRS Free File page, but your experience with their state forms not being ready is exactly the kind of issue I need to avoid. I'm also a Michigan resident and always try to file early to get my refund quickly. The idea of spending 2+ hours on federal only to hit a wall with state forms sounds like my worst nightmare. FreeTaxUSA at $19 total seems like a much safer bet, especially since you mentioned they tend to have better state form availability early in the season. The W2 PDF import feature alone would probably save me 20-30 minutes since I have multiple jobs this year. Even with the occasional OCR error you caught, that's still way better than manual data entry. Thanks for taking the time to write such a detailed comparison - you just saved me from making the same frustrating mistake with 1040.com!