Another thing to consider - if you're getting a refund from the amendment, the IRS pays interest on that money (and the interest is taxable next year, fun). But if amending means you OWE money, you'll probably have to pay interest and possibly penalties too. The current interest rate the IRS charges is like 7-8% I think? So that's another factor in deciding if it's "worth it" - the longer you wait, the more interest accumulates either way.

The $4600 in mortgage interest could definitely be worth amending, but it really depends on whether you itemized or took the standard deduction. If you took the standard deduction and this wouldn't push your total itemized deductions above that threshold, then amending won't help. However, if you were already itemizing or this would tip you over into itemizing territory, you're looking at potential tax savings in the hundreds to over $1000 range depending on your tax bracket. One thing to keep in mind - you have 3 years from the original filing date to amend, so there's no immediate rush. But the sooner you do it, the sooner you'll get any refund (plus the IRS pays interest on amended return refunds). The processing time is definitely slow right now - expect 4-6 months minimum. I'd suggest pulling out your original return and checking Schedule A to see if you itemized. If you did, or if adding this $4600 to your other potential deductions (state taxes, charitable donations, etc.) would exceed your standard deduction amount, then it's probably worth the hassle and fee to amend.

Has anyone here ever just absorbed the 6% penalty each year rather than withdrawing the excess? I'm trying to decide if it's worth it in my case since my excess contribution was only $600 and the penalty is just $36/year.

Great breakdown of your situation! You're absolutely correct about the penalty calculations - $60 for 2022 and $60 for 2023, and no penalty for 2024 if you withdraw before April 15, 2025. One important detail to add: when you contact your IRA provider in January 2025, make sure to specify that you want to withdraw the excess contribution for tax year 2022 (not 2024). This is crucial for proper reporting on their end. Regarding your question about using the withdrawn funds for your 2025 contribution - yes, you can absolutely do that! Once the money is properly withdrawn as an excess contribution correction, it's just regular cash that you can use however you want, including for a new IRA contribution (assuming you're eligible for 2025). And yes, you'll still need to file Form 5329 for 2024 even though you won't owe a penalty. This shows the IRS that you've corrected the excess contribution properly. The form will show the withdrawal and zero out the excess for that year. One last tip: keep detailed records of all this, including the specific dates and amounts. It'll make your tax filing much smoother and help if the IRS ever has questions later.

This has been such a valuable thread! I'm planning to implement this strategy for my S-corp next quarter and really appreciate all the detailed advice shared here. One question I haven't seen addressed: For those of you doing this successfully, how do you handle the corporate side of the documentation? I understand the personal tax reporting (Schedule E), but I want to make sure I'm categorizing the expense correctly in my S-corp's books. Would this rental expense go under "Office Expenses," "Meeting Expenses," or should it have its own category like "Facility Rental"? I use QuickBooks for the corporate accounting, and I want to make sure it's properly classified for both my own records and if we ever get audited. Also, does anyone include language in their corporate bylaws about this type of arrangement, or is the board resolution sufficient? I'm trying to think ahead about what would make this look most legitimate and businesslike. Thanks again everyone - this discussion has given me the confidence to move forward with proper documentation rather than continuing to pay for coffee shop meetings that aren't even tax deductible!

This is such a timely discussion for me! I've been running my S-corp for about 6 months now and just realized I need to get more formal about our quarterly meetings. Currently my business partner and I just meet at Panera or wherever, but after reading through all these responses, I can see there's a much better approach. The documentation requirements everyone has outlined are really helpful - especially the emphasis on establishing everything upfront with proper board resolutions and rental agreements before you start. I'm definitely going to look into setting this up properly rather than trying to retrofit documentation after the fact. One thing I'm still unclear on though - for those of you who have been doing this successfully, how do you handle it if you need to reschedule a meeting? Like if we planned to hold our Q2 meeting at my house but then had to move it to a different date, would that affect the rental agreement or documentation? I'm trying to think through all the practical scenarios that might come up. Also really appreciate the specific advice about QuickBooks categorization and the square footage calculation method for determining fair rental rates. This gives me a solid framework to work with when I discuss this with my CPA. Thanks to everyone who shared their real-world experience - it's so much more valuable than the generic advice you find in most tax guides!

I'm in the exact same situation with Discover! My DDD is also next Tuesday and I've been obsessively checking my account. From what I've gathered reading through all these comments, it seems like Discover is pretty inconsistent - some people get it 1-2 days early, others right on the DDD. The fact that they don't see anything pending yet isn't necessarily bad news since the IRS releases funds in batches. I'm planning to start checking Sunday night just in case, but trying not to get my hopes up too much. This waiting game is torture! 😅

I've been banking with Discover for about 3 years now and my experience has been pretty mixed on early deposits. Last year my refund hit at around 2 AM the day before my DDD, but the year before it came exactly on the scheduled date. I think it really depends on what day of the week your DDD falls on and how busy the IRS is that particular week. Since yours is Tuesday, I'd say there's a decent chance it could hit Monday night or early Tuesday morning. The fact that Discover doesn't see anything pending yet isn't unusual - they often don't show pending deposits until just a few hours before they post. I'd recommend setting up account alerts and trying not to drive yourself crazy checking every hour (easier said than done, I know!). Good luck!

I'm a tax preparer and want to add one important clarification that might help others in similar situations. While everyone is correct that employer-paid health insurance premiums aren't included in gross income, there's one specific scenario to watch out for. If you're a more-than-2% S-corporation shareholder-employee, the employer-paid health insurance premiums ARE included in your gross income (though you may be able to deduct them elsewhere on your return). This is a pretty niche situation, but since you mentioned being close to income thresholds, it's worth noting. For the vast majority of employees (W-2 wage earners), the employer health insurance contribution is completely excluded from gross income as everyone has explained. But if you happen to be a significant owner in an S-corp, the rules are different. Given that you mentioned a regular W-2 situation with $71,500 in income, you're almost certainly in the standard employee category where the health insurance exclusion applies. Just wanted to mention this edge case since precision matters when you're near income thresholds for tax credits!

As someone who's dealt with similar AGI calculations for tax credit eligibility, I can definitely confirm what everyone has said - employer-paid health insurance premiums are excluded from your gross income under Section 106 of the tax code. What really helped me understand this was looking at my actual W-2 when it arrived. Box 1 shows your taxable wages, and the employer's health insurance contribution simply isn't included there. You might see it in Box 12 with code DD (for informational purposes), but that doesn't affect your AGI calculation at all. With your $71,500 base salary, you're in excellent shape for staying under that $75k threshold. The $9,800 your employer pays for health insurance is completely invisible to the IRS for income purposes. Plus, if you're making any pre-tax contributions to health insurance, HSA, or other benefits through payroll deduction, those actually REDUCE your AGI below your base salary. I was in almost the exact same situation last year and successfully claimed the tax credit I was worried about losing. The key is trusting that the tax system has already built in these exclusions - you don't need to add back employer benefits when calculating your AGI. You should be well within the income limits for whatever credit you're pursuing!