Ok but what if my client paid exactly 90% and not a penny more? Does the software round in their favor or does it need to be slightly over 90%? Our firm uses different software and I'm curious if there are any edge cases I should watch for.

This is a great discussion! I've been dealing with similar penalty calculations and it's clear there's a lot of nuance here that even experienced practitioners sometimes miss. From what I'm seeing in the responses, it sounds like Ultratax might actually be correct in your situation. The combination of filing an extension AND paying at least 90% by the original due date does provide some protection from the Failure to Pay penalty during the extension period. However, I'd still recommend double-checking this with the IRS directly or using one of the tools mentioned here to verify. The stakes are too high to just assume the software is right without confirmation. I've seen cases where software gets updated penalty calculations wrong, especially when there are special provisions or recent rule changes. Also worth noting - even if the Failure to Pay penalty doesn't apply during the extension period, make sure your client understands that interest is still accruing from the original due date on that unpaid $8,000. That can add up over time even without penalties.

This is such a helpful discussion! I'm dealing with a similar situation with my company's car allowance - they're taxing it but excluding it from 401k calculations. After reading through everyone's experiences, I'm realizing I need to be more systematic about this. The advice about requesting the Summary Plan Description and looking for the specific definition of "eligible compensation" is exactly what I needed to hear. I've been accepting HR's vague explanations without actually seeing the documentation. What really struck me was Rachel's calculation showing $60,000 in lost retirement savings over 30 years. I never thought about the compound effect like that. My car allowance is $600/month, so even with a smaller amount, I'm potentially looking at significant long-term losses. I think my next steps will be: 1) Request the SPD and look for specific language about what's included/excluded, 2) Calculate the actual financial impact like Rachel did, and 3) approach my manager during our next one-on-one to discuss restructuring my compensation package. Has anyone found that companies are more willing to make these changes during annual compensation reviews, or is it better to bring it up as soon as possible? I don't want to wait until next year if there's a chance to fix this sooner.

This thread has been incredibly eye-opening! I'm a tax preparer and I see this confusion all the time with clients. What many people don't realize is that the IRS has different rules for different purposes - what counts as taxable income for Form W-2 purposes isn't necessarily the same as what counts for retirement plan contributions. The key thing to understand is that your employer's 401(k) plan document is essentially a contract that defines the rules for that specific plan. As long as they follow their own written rules consistently and pass IRS non-discrimination testing, they have a lot of flexibility in how they define "eligible compensation." I've seen clients in similar situations who were able to get their issues resolved, but it usually required one of three approaches: 1) Finding an actual error in how the company was interpreting their own plan document, 2) Negotiating a compensation restructure during performance reviews, or 3) Working with benefits administrators to clarify plan language that was genuinely ambiguous. The long-term impact calculations people have shared here are spot-on. Missing employer matching on even $500-1000/month in allowances can easily cost you $30,000-60,000 in retirement savings over a career. That's definitely worth a few uncomfortable conversations with HR! My advice: get the plan documents, run the numbers, and approach it as a financial planning optimization rather than a complaint. Good luck everyone!

This is exactly why I love this community - seeing everyone jump in to help decode these confusing transcripts! 💪 From what you've shared, it looks like you've been through quite the journey. That 810 freeze code from March 2023 plus the amended return (977) definitely explains why things took so long. The examination codes (420/421) show they did a thorough review but closed it in April, which is actually great news! Those credits totaling over $11k ($3,599 + $7,935) are substantial - no wonder the IRS wanted to take a closer look. With the examination closed and the refund hold removed (577 code), you're definitely in a much better position now. Keep an eye out for that 846 code everyone's mentioning - that's your golden ticket showing the refund has actually been issued with a date. Given where you are in the process, I'd expect to see movement soon. The worst part (the examination) is behind you! Stay strong - you've made it through the hardest part of this process! 🙌

This is such a relief to see someone else going through the same thing! I've been dealing with a similar situation - had a refund freeze last year and just went through an examination that finally closed a few weeks ago. Looking at your codes, you're actually in a really good spot! That 421 code showing your examination closed in April is huge - mine just closed and I can tell you the relief is real. The fact that they removed your refund hold (577) right after closing the exam is a great sign. Those credits you're seeing ($3,599 + $7,935) are legitimate and were processed back in April 2023, but the freeze kept them from being released. Now that everything's cleared, you should definitely be seeing an 846 code with a DDD (direct deposit date) soon. I know the waiting is absolutely brutal - I've been checking my transcript obsessively for months. But based on what I'm seeing here, you've cleared all the major hurdles. The IRS doesn't remove refund holds unless they're satisfied with their review. Hang in there - after almost two years of this process, you're finally at the finish line! 🤞✨

This is a really serious situation that needs immediate attention. Your spouse filing a joint return without your consent is not just "no big deal" - it's potentially fraudulent and could have major consequences for you. First, you absolutely DO need to report your LLC income on Schedule C. A single-member LLC with $28,000 in profit is significant taxable income that the IRS expects to see reported. You'll also owe self-employment tax on that profit (roughly 15.3% or about $4,284). Your spouse claiming you "don't need to file anything" is completely wrong and could result in substantial penalties. Here's what you need to do immediately: 1. Request a tax transcript from the IRS (Form 4506-T) to see exactly what was filed 2. Contact your divorce attorney - this unauthorized filing may violate court orders 3. Consider filing Form 8857 (Innocent Spouse Relief) to protect yourself from joint liability 4. If your LLC income wasn't included on the joint return, you'll need to file your own return (Married Filing Separately) or amend the joint return The IRS will eventually catch unreported business income, especially if you received any 1099s. Don't let your spouse's dismissive attitude put you at risk for tax fraud charges or massive penalties. Get professional help from a tax attorney or CPA who handles divorce situations - this is too complex and risky to handle alone. Document everything about this unauthorized filing for your divorce proceedings. Courts take financial dishonesty very seriously.

I went through something very similar during my divorce two years ago. My ex filed jointly without telling me and excluded income from my consulting business. It was a complete mess, but I was able to resolve it. Here's what worked for me: I immediately filed Form 14039 (Identity Theft Affidavit) since my information was used without permission, then followed up with Form 8857 (Innocent Spouse Relief). The IRS actually processed these faster than I expected - about 6 weeks total. For your LLC income, you absolutely need to report it regardless of what your spouse says. That $28K profit will require Schedule C and you'll owe self-employment tax (around $3,950). The IRS has automated systems that match business income to tax returns, so they WILL catch unreported LLC income eventually. One thing that really helped me was getting my own Taxpayer Advocate assigned to my case. Since this involves potential fraud and you're going through divorce, they prioritize these situations. You can request one through Form 911 or by calling the Taxpayer Advocate Service directly at 1-877-777-4778. Also document everything for your divorce attorney. In my case, the judge was not happy about the unauthorized filing and it actually worked in my favor during asset division. Courts see this as financial misconduct. Don't let your spouse gaslight you into thinking this "doesn't matter" - protect yourself and get professional help ASAP.

I've been through this exact scenario! Living abroad definitely adds complexity to the IDme-IRS verification process. A few things to try: First, make sure you're accessing the IRS portal directly (irs.gov/account) rather than through any bookmarked links - sometimes cached URLs can cause loops. Second, when you get to the IDme login screen, look for text that says something like "authorize IRS access" after you log in - this is the key step many people miss. Third, if you're still getting stuck, try using a different browser entirely or clearing all cookies/cache for both irs.gov and id.me domains. The international IP address usually isn't the issue, but the verification system can be finicky about browser sessions. If none of that works, you might need to contact IDme support directly - they can see if there's a technical issue with your account's IRS authorization status.

I went through this same frustrating experience last year! The trick is understanding that IDme verification and IRS authorization are two separate steps. Even with a verified IDme account, you still need to complete the IRS-specific authorization flow. Here's what worked for me as an international filer: 1) Make sure you're using the direct IRS.gov link, not any bookmarked pages, 2) When you log into IDme, look for the consent screen that specifically mentions sharing your verified information with the IRS - this is crucial and easy to miss, 3) Ensure your IDme profile address matches exactly what's on your most recent tax return (international addresses can be tricky with formatting), and 4) Try using a fresh browser session or incognito mode to avoid any cached authentication issues. The Canadian IP address shouldn't be a problem, but the address formatting and authorization consent are the most common culprits for the verification loop. If you're still stuck after trying these steps, IDme customer support can check if there's a technical issue with your account's IRS connection status.