Great question! Yes, you can absolutely convert the entire $14,500 from your Traditional IRA to Roth IRA in 2025. There are no annual limits on conversion amounts - only on contributions. Since you mentioned your Traditional IRA contributions are non-deductible (after-tax), you'll have minimal tax consequences. You'll only owe taxes on any earnings that accumulate between contribution and conversion. Given that you're doing this as part of a backdoor Roth strategy with minimal growth, your tax hit should be very small. A few tips from my experience: - Convert soon after contributing to minimize taxable earnings - Keep detailed records and file Form 8606 for each year you make non-deductible contributions - Consider doing the 2025 contribution and conversion early in January to maximize your Roth growth time This is a perfectly legitimate strategy that many people use to get around the Roth IRA income limits. Just make sure you don't have any other Traditional IRA balances (like old 401k rollovers) that could trigger the pro-rata rule and complicate your taxes.

You're absolutely right that there's no limit on conversion amounts! I did exactly what you're describing last year - converted about $13,000 from my Traditional IRA to Roth in one go after making contributions for both 2023 and 2024. One thing I learned the hard way: make sure you understand how your brokerage handles the conversion process. Some require you to call them, others let you do it online. I assumed I could just transfer money between accounts, but it needs to be processed as an official "conversion" for tax reporting purposes. Also, keep really good records of your contribution dates and amounts. When tax time comes, you'll need to report the non-deductible contributions on Form 8606, and having clear documentation makes everything much smoother. I created a simple spreadsheet tracking contribution dates, amounts, and conversion dates - saved me a lot of headaches come April! The backdoor Roth is such a great strategy for high earners who can't contribute directly to Roth IRAs. You're on the right track!

Based on my experience as a fee basis official for a federal agency, I want to emphasize the importance of getting your classification sorted out ASAP. The distinction between employee and independent contractor has huge implications beyond just withholding. If you're truly a fee basis official who's an employee, you should have access to workers' compensation, unemployment benefits, and potentially other employment protections. Independent contractors don't get these benefits. One thing that helped me was looking at the actual IRS factors for worker classification: Do they control HOW you do your work or just WHAT work you do? Do you use their equipment/office space? Are you integrated into their regular operations? These factors matter more than just the payment structure. Also, don't forget about potential deductions if you are classified as an independent contractor - home office, professional development, equipment, etc. Keep detailed records of all work-related expenses from day one, regardless of your classification, because you might need them later. The quarterly estimated tax payments are crucial if you're 1099 - missing them can result in penalties even if you pay everything at year-end. Set aside money immediately from each payment you receive.

As someone who recently went through a similar classification challenge with my municipal position, I'd strongly recommend getting everything in writing from your HR department about your status. Don't just accept verbal explanations - ask for documentation that clearly states whether you're classified as an employee or independent contractor. One thing that really helped me was requesting to see the actual job description and any internal memos about how positions like yours are supposed to be handled. Sometimes there's a disconnect between what HR tells you verbally and what their official policies actually say. Also, keep detailed records of everything - your work schedule, supervision level, equipment provided, training requirements, etc. This documentation could be crucial if you ever need to challenge your classification with the IRS or Department of Labor. From a practical standpoint, if you're not having taxes withheld, I'd recommend opening a separate savings account immediately and transferring 25-30% of each payment into it for taxes. Even if you later find out you're misclassified as a contractor, you'll have the money set aside and won't be scrambling at tax time. The uncertainty is stressful, but getting proper documentation and keeping good records will protect you either way the classification goes.

4 Has anyone dealt with the failure-to-file penalty for Form 1065 specifically? I'm in a similar situation but with a multi-member LLC, and we're getting hit with $2,100 per partner per month for late filing! It's absolutely crushing us.

I've been through this exact nightmare with my LLC! Here's what I learned that might help: First, don't panic - you have options. The IRS penalty system is harsh but there are legitimate ways to get relief. Since you're a single-member LLC filing Schedule C, you're likely dealing with failure-to-file and failure-to-pay penalties on your personal return. Your current accountant sounds unreliable if they've consistently filed late despite claiming to file extensions. Extensions only give you time to file, not to pay - so if you owed taxes, you'd still get hit with penalties even with valid extensions. Here's my action plan that worked: 1) Get your IRS transcripts immediately to see what was actually filed and when 2) Fire your current accountant - they're clearly not handling your situation properly 3) Look into First Time Penalty Abatement for at least one tax year 4) Document everything about your previous accountant retiring and the chaos that caused 5) Consider "reasonable cause" arguments for the other years The key is being proactive. I waited too long hoping my accountant would fix things, and it just got worse. You might be surprised how much penalty relief is available if you approach it systematically. Don't let the intimidating notices paralyze you - there's definitely a path forward here.

I completely understand your concern about this situation, Jamal. Your instincts are absolutely right - what your neighbor is suggesting is tax evasion, plain and simple. Here's the bottom line: You're required to report ALL income, regardless of how you're paid. At $300 per job doing 2-3 jobs monthly, you're looking at roughly $1,800-$2,700 per year. This definitely needs to be reported on your tax return. Your neighbor also has obligations - if he's paying you as an independent contractor and it totals $600+ per year, he should issue you a 1099-NEC. If not, you still need to report it as "other income" on your return. My advice: Start tracking all payments from now on, set aside about 25-30% for taxes (income tax plus self-employment tax), and consider making quarterly estimated payments to avoid a big bill next April. You might also be able to deduct work-related expenses like tools or mileage. Don't let your neighbor's casual attitude toward taxes put you at risk. The "everyone does it" mentality doesn't protect you from penalties, interest, or potential criminal charges. Better to handle this properly from the start than deal with IRS problems later.

Just want to echo what others have said - your gut feeling is absolutely correct. This is tax evasion, not a "tax headache avoidance strategy." I work in tax preparation and see people in similar situations all the time. The "everyone does it" line is classic - it's what people tell themselves to justify risky behavior. But the reality is that unreported income catches up with you eventually, often when you least expect it. A few practical points for your situation: - Keep detailed records of all payments (dates, amounts, work performed) - You'll likely need to file Schedule C for this self-employment income - Don't forget about self-employment tax (15.3%) in addition to regular income tax - Consider quarterly estimated payments if this continues The peace of mind from doing things correctly is worth way more than the temporary "savings" from hiding income. Plus, as a legitimate business expense, your neighbor can actually deduct what he pays you - so there's really no good reason for him to want to hide these payments other than avoiding his own tax obligations. Better to have an honest conversation with him about proper documentation, or find a different side gig if he's unwilling to do things legally.

Something nobody's mentioned yet - if your husband's getting this stipend without any tax docs, his employer might be misclassifying this payment to avoid payroll taxes. That could cause bigger problems down the road. If he's truly an employee (W-2), ALL compensation should be reported on his W-2, including stipends. The only exception would be properly documented reimbursements under an accountable plan.

I handle payroll for a small company and we've had this exact issue. If the stipend is a true reimbursement under an accountable plan it should NOT be on his W-2. But there are strict rules - he must submit expense reports/mileage logs to his employer, have a business purpose for each expense, and return any excess money not used for business expenses. If those requirements aren't met, it's just taxable income that should be included on his W-2.