This is a complex situation but definitely not unfixable. I've helped several clients through similar partnership/payroll reclassification issues. Here's what you need to prioritize: 1. **Immediate assessment**: Gather all your payroll records, LLC operating agreement, and any state/federal filings to confirm your tax status and the scope of corrections needed. 2. **Consider penalty relief**: Look into First Time Penalty Abatement if you qualify, or Reasonable Cause relief for the late 1065 filings. The IRS is sometimes more lenient when businesses proactively correct mistakes. 3. **Sequential filing strategy**: File the 1065s in chronological order starting with the earliest year. This helps establish the pattern of corrections and makes it easier for the IRS to process. 4. **Partner's individual impact**: The partner who was paid through payroll will likely owe additional self-employment taxes, but they may also be eligible for some credits they missed as a partner (like the Section 199A deduction if applicable). 5. **Professional help**: Given the 4-year scope and multiple return types involved, seriously consider hiring a tax professional experienced in partnership corrections. The cost will likely be offset by avoiding bigger mistakes and potentially reducing penalties. The key is being proactive and systematic about the correction process. The IRS generally works with taxpayers who voluntarily come forward to fix mistakes.

One thing I haven't seen mentioned yet is the importance of documenting your correction process thoroughly. Keep detailed records of every amended return filed, every payment made, and all correspondence with the IRS. This documentation becomes crucial if there are any disputes later or if the IRS has questions about your corrections. Also, consider requesting penalty abatement letters for each tax year once you've filed the corrections and made payments. The IRS sometimes grants relief for reasonable cause, especially when businesses proactively correct mistakes. Your cooperation in fixing this voluntarily could work in your favor. For the partner who was incorrectly paid through payroll, make sure they understand they'll need to file amended individual returns (1040X) for each affected year. The timing matters here - generally you have 3 years from the original due date to amend and claim refunds, so depending on when those original returns were filed, some years might be getting close to that deadline. Finally, once this is all corrected, establish proper ongoing procedures to prevent this from happening again. Set up quarterly partnership meetings to review tax obligations and consider working with a bookkeeper or accountant who understands partnership taxation.

One thing to keep in mind is that the IRS has specific rules about when you can use a child's SSN that was issued after the tax year ended. Since your son got his SSN in November 2024, you should be able to use it for amending your 2022 and 2023 returns. The IRS generally allows this as long as the child was a U.S. citizen or resident alien during the tax year in question. Also, don't forget about the Earned Income Tax Credit (EITC) if you qualify! With a qualifying child and Head of Household status, you might be eligible for this credit too, which could add even more to your refund. The EITC amounts were pretty substantial in 2022 and 2023 for taxpayers with children. I'd recommend using the IRS's Interactive Tax Assistant tool on their website to double-check all the credits you might qualify for before filing your amendments. It's free and can help ensure you're not missing anything.

I went through a very similar situation when my daughter finally got her SSN after being born abroad. The good news is that you don't need to include special documentation about when your son received his SSN with your amended returns. The IRS system handles this automatically - they understand that SSNs issued after the tax year can be used for amendments as long as the child qualified as your dependent during those years. Just make sure when you file Form 1040-X for each year that you clearly enter your son's SSN in the dependent section and check the box indicating you're adding a dependent. The IRS will cross-reference this with Social Security Administration records. One tip: when you calculate the EITC, use the IRS EITC Assistant tool online first to get an estimate of what you might qualify for. With Head of Household status and one qualifying child, you could be looking at substantial credits for both years. Also consider if you paid for childcare - you might qualify for the Child and Dependent Care Credit too, which would go on Form 2441. The whole process took about 6 months for my amendments to be processed, but the refunds were definitely worth the wait. Just be patient and keep copies of everything you submit!

As someone new to this community, I really appreciate all the helpful advice shared here! I'm in a similar boat - just switched jobs and my spouse started freelancing, so figuring out our withholding has been a nightmare with the IRS calculator. Reading through everyone's experiences, it sounds like the consensus is to aim for "good enough" rather than perfect precision. That's honestly such a relief to hear! I was spending hours trying to account for every possible scenario and driving myself crazy in the process. The suggestions about alternative tools like taxr.ai and FreeTaxUSA's calculator are really helpful. Sometimes you just need a different interface to make the same math more understandable. And the tip about the safe harbor rule for avoiding underpayment penalties is something I definitely need to look into more. Thanks everyone for sharing your real-world strategies. It's reassuring to know that even tax professionals recommend the "set it and forget it" approach rather than constantly adjusting. I think I'll update our W4s once to account for our major changes and then try to resist the urge to tinker with them every month!

Welcome to the community! I'm also relatively new here and have been struggling with the exact same W4 calculator issues. It's so validating to read through this thread and realize I'm not the only one finding the new system unnecessarily complicated. Like many of you, I really miss the simplicity of just picking a number between 0-9. The current calculator feels like it's designed by people who have never actually had to use it in real life - all those confusing questions and scenarios that may or may not apply to your situation. I'm definitely going to try some of the alternatives mentioned here, especially taxr.ai since multiple people have had good experiences with it. The idea of getting clear W4 instructions without having to navigate that maze of IRS questions sounds amazing. The "good enough" philosophy that's emerged in this discussion is exactly what I needed to hear. I've been stressing myself out trying to account for every possible income change when really I should just aim to get in the ballpark and adjust at tax time if needed. Thanks everyone for sharing your experiences - it's made me feel much less alone in this struggle!

I've been dealing with Fidelity 1099-Rs for several years now, and this thread is absolutely spot-on with the advice. Just wanted to add one small detail that might help future filers: when you're looking at your 1099-R form, you'll notice that the payer information is actually formatted in multiple lines on the document, but tax software typically wants just the primary entity name in a single field. The key is recognizing that "FIDELITY INVESTMENTS" is the registered business entity that has the relationship with the IRS, while "INSTITUTIONAL OPERATIONS CO." is just their internal processing division. Think of it like how you might receive a statement from "Bank of America" even though it's processed by "Bank of America Consumer Operations" - for tax purposes, you'd use the main bank name. I've filed using "FIDELITY INVESTMENTS" with FreeTaxUSA for the past four years without any issues. The EIN matching system works exactly as everyone has described here. Don't let the complex formatting on the physical form intimidate you - the IRS systems are designed to work with standardized entity names, not every operational detail. Great discussion everyone - this should definitely help anyone facing this same confusion in future tax seasons!

I've been lurking in this community for a while and just had to jump in to thank everyone for this incredibly thorough discussion! As someone who just received my first ever 1099-R from Fidelity (early retirement distribution), I was completely lost about the payer name issue until I found this thread. The consensus is crystal clear: use "FIDELITY INVESTMENTS" as the payer name, make sure the EIN from Box 12 is entered correctly, and don't worry about all the subsidiary department information. What really helped me understand this was the explanation about how the IRS matching system works - it's designed around EINs and primary entity names, not every operational detail that appears on the forms. I just finished entering my information in FreeTaxUSA using this approach, and the software accepted it without any validation errors. The auto-populate feature someone mentioned actually worked perfectly - after I entered the EIN, it suggested "FIDELITY INVESTMENTS" as the payer name, which gave me extra confidence I was doing it right. This thread should be pinned as a reference guide! The combination of professional tax preparer insights, former IRS perspective, and multiple real-world success stories makes it an incredibly valuable resource for anyone dealing with retirement distributions. Thanks to this community for turning what seemed like a scary tax question into a completely manageable part of my filing process.

This is incredibly encouraging news! I've been working in estate administration for about 5 years now, and the processing delays have been one of the most stressful aspects of the job. Having to constantly explain to grieving families why they can't access or distribute assets for 2+ years has been heartbreaking. The 18-month processing times you're seeing align with what we've experienced recently as well. We had two 706 returns come back within 15 and 17 months respectively, which was shocking after years of much longer waits. It's such a relief to be able to give clients more realistic expectations again. I'm particularly interested in your mention of the 706-NA processing in 11 months - that's remarkable! Non-resident estate returns used to be even slower than domestic ones in my experience. One thing I've been wondering about is whether this improvement extends to more complex estates with business valuations or significant charitable deductions. Have you seen faster processing across all types of estates, or mainly the more straightforward ones? I have a complex estate with a family business interest that we filed 8 months ago, and I'm cautiously hopeful it might move faster than the 30+ months we used to expect for these cases.

This is fantastic news to hear! As someone who recently started handling estate administration, the improved processing times give me so much more confidence in setting realistic expectations with clients. I've been using a combination of the tools mentioned here - both taxr.ai for ensuring complete submissions and Claimyr when I absolutely need to reach the IRS directly. The taxr.ai system has been invaluable for catching potential issues before filing, and I actually used Claimyr last month to get clarification on a complex valuation question that could have delayed processing for months. What really strikes me about this thread is how much the client experience has improved. Being able to tell families that their 706 will likely be processed in 14-20 months instead of 30+ months makes such a difference during an already difficult time. The beneficiary communication features in these newer tools have also been game-changers for managing expectations and reducing those anxious phone calls we all know too well. I'm cautiously optimistic that these improvements represent a real systemic change at the IRS rather than just a temporary backlog clearance. The combination of better IRS processing and these new professional tools is making estate administration much more manageable for both practitioners and families.