This is a fascinating legal paradox that highlights the complexity of tax law. The Fifth Amendment protects against self-incrimination, but the Supreme Court ruled in United States v. Sullivan (1927) that this doesn't exempt illegal income from taxation. The practical reality is that the IRS operates under strict confidentiality rules (IRC Section 6103), so they generally can't share your tax information with law enforcement without proper legal process. However, unexplained wealth discrepancies are what typically trigger investigations in the first place. If someone hypothetically had $135k in unreported income, the bigger risk isn't necessarily how you categorize it, but whether your reported lifestyle matches your claimed income sources. The IRS has become very sophisticated at detecting these mismatches through data analytics. The "illegal activities" checkbox exists primarily for legal compliance with Supreme Court rulings, not as a trap. But you're right that it creates an impossible situation - report honestly and potentially incriminate yourself, or misrepresent and risk fraud charges if discovered later. For anyone in genuinely complex income reporting situations, consulting a tax attorney who can provide privileged advice is usually the safest approach.

The confidentiality protections are indeed strong but not absolute. Under IRC Section 6103, tax return information is generally protected from disclosure, but there are specific exceptions. Law enforcement can access tax information through court orders, grand jury subpoenas, or under certain criminal investigation provisions. The key distinction is that the IRS won't proactively share information about reported illegal income, but if you're already under investigation for other reasons, your tax returns can become evidence. The bigger practical issue is that reporting illegal income on your return creates a paper trail that could be discovered during any future legal proceedings. What's particularly tricky is that even if you report the income correctly, you still need to handle the documentation and record-keeping requirements. The IRS expects you to maintain records supporting your income claims, which creates additional complications for income from illegal sources. The reality is that most people in these situations try to find ways to legitimize the income through legal business activities rather than directly reporting illegal income. But that approach has its own risks if the underlying documentation doesn't support the claimed business activity.

I've been following this thread and wanted to share my experience from a few years ago when I had a similar issue with TaxAct. The software crashed right before I was about to submit, and I was panicking about whether I was somehow locked into using them. The key thing to remember is that until your return is actually accepted by the IRS (you'll get an official acceptance confirmation), you haven't filed anything. Software-level rejections or crashes don't count as filing attempts in the IRS system. I ended up calling the IRS Taxpayer Assistance Line directly (yes, it took forever to get through) and they confirmed there was no record of any filing attempt. Switched to a different platform and filed successfully. One thing I'd add to the great advice already given here - when you do switch to new software, make sure to check that your state return (if applicable) also gets filed correctly. Sometimes people focus so much on getting the federal return right that they forget about state filing requirements.

I went through almost the exact same situation with H&R Block two years ago! Their software had some kind of glitch with the employer import feature and kept rejecting my return before it even got to the IRS. I was so frustrated because everything on my end was correct. The good news is that you're absolutely free to switch to any other tax software. Since H&R Block rejected your return at their level and never transmitted it to the IRS, there's no record of any filing attempt in the government system. You won't need to file an amended return because nothing was ever actually filed. I ended up switching to TurboTax and had no issues at all. My advice would be to start completely fresh with whatever new software you choose and maybe avoid using any import features this time around - just enter everything manually to avoid any potential glitches. It takes a bit longer but gives you peace of mind that everything is entered correctly. You've got plenty of time before the filing deadline, so don't stress too much about the H&R Block mess-up. These software glitches happen more often than you'd think, and you're definitely not stuck with them!

This thread has been absolutely incredible - so much detailed and practical advice! As someone who's been lurking in this community for a while but just starting to get serious about retirement planning, I wanted to add one perspective that might be helpful. I'm in a similar situation to @Serene Snow (early 30s, government employee, just figuring out retirement accounts), and what really helped me was thinking about it in terms of "hedging my bets" rather than trying to find the single "perfect" strategy. The 457(b) is great if tax rates go down or stay the same by retirement. The Roth IRA is great if tax rates go up or if I end up in a higher bracket than expected. Since none of us have a crystal ball, having both covers more scenarios. One thing I'd add that I learned from my own research: don't underestimate the value of simplicity when you're starting out. It's better to pick a reasonable strategy and stick with it for years than to constantly second-guess yourself and make frequent changes. The consistency of saving regularly matters way more than optimizing every single detail. @Serene Snow - after all this amazing advice, I'd love to hear what you're leaning toward! Have you been able to check with your HR about employer matching? Even if there isn't any, the "do both" approach seems to have strong support here, and starting with whatever amount feels sustainable is the key. You're asking all the right questions at exactly the right age!

As someone who's been working in government HR for over a decade, I wanted to add a few practical points that might help with your decision: First, definitely check with your county's benefits office about employer matching - while it's less common with 457(b) plans, some local governments do offer it, especially if they're trying to compete for talent. Even a small match like 25-50 cents per dollar up to 3% would be significant free money. Second, I'd recommend looking at your county's pension plan too. If you have a decent pension coming (which many county employees do), that changes the retirement savings equation. You might not need as much from your personal retirement accounts, which could tip the balance toward the Roth IRA for tax diversification and flexibility. One thing that hasn't been mentioned - many government 457(b) plans have limited investment options and higher fees compared to what you can get with a Roth IRA at a place like Vanguard or Fidelity. Check your plan's expense ratios - if they're above 0.5-1%, that could eat into your returns significantly over 30+ years. My suggestion: Keep contributing to the 457(b) at least until you confirm there's no match, then seriously consider splitting future increases between maxing your 457(b) and opening a Roth IRA. At 32, even $200/month to a Roth could grow to over $500,000 by retirement if invested in low-cost index funds. The tax diversification alone makes this strategy worth considering!

The IRS has a "Safe Harbor" provision (Section 530) that some small religious schools try to use as a loophole, but it doesn't apply in situations like yours. They have to meet very specific requirements including consistent treatment of all similar workers and a "reasonable basis" for classification. With you working set hours, teaching assigned curriculum, and using their facilities, there's no reasonable basis for contractor status. The school is definitely in the wrong here. If they don't fix this after you bring it up, file Form 8919 "Uncollected Social Security and Medicare Tax on Wages" with your tax return to pay only your half of these taxes instead of the full self-employment tax. Check code G in box 9: "I received a Form 1099 but I am a statutory employee.

I'm dealing with something very similar at my tutoring center! They've been giving me 1099s even though I work set hours, use their curriculum, and teach in their facility. After reading through all these responses, I'm definitely going to try the taxr.ai suggestion first to get documentation, then have a conversation with my employer. The Form 8919 option is really helpful to know about - I had no idea you could pay just the employee portion of Social Security and Medicare taxes when you're misclassified. At $21k salary, that self-employment tax difference is probably costing you around $1,600 extra per year, which is huge when you're already struggling financially. One thing I'd add - document everything about your work relationship (your schedule, any employee handbook, emails about duties, etc.) before you approach the school. Having that paper trail will be crucial whether you end up filing IRS forms or just need to convince your administration to fix the classification. Good luck with this! It's frustrating that schools think they can get away with this just because teachers are often desperate for work and don't know their rights.

Just to add another perspective on timing - if you're still working at age 73+ and participating in your current employer's 401(k), you might be able to delay RMDs from that specific 401(k) until you actually retire (assuming you don't own 5% or more of the company). This is called the "still working exception." However, this only applies to your current employer's plan - you'd still need to take RMDs from IRAs and previous employers' 401(k)s. If you have old 401(k)s sitting around, you might want to consider rolling them into IRAs for easier management, but be aware this would subject them to the normal RMD rules without the still-working exception. This won't help with your 2024 RMD situation since that's from an IRA, but it's something to keep in mind for future planning if you're still employed.

One important detail to clarify about the tax year reporting - while your March 2025 withdrawal will be reported on your 2025 tax return, make sure you understand how this affects your quarterly estimated tax payments if you make them. Since you'll have potentially two RMDs worth of income in 2025 (your delayed 2024 RMD plus your regular 2025 RMD), you may need to adjust your estimated payments to avoid underpayment penalties. The IRS expects you to pay taxes throughout the year, not just when you file your return. If you decide to take your 2024 RMD in December 2024 instead, you could spread this tax burden more evenly and potentially avoid having to make large estimated tax payments in 2025. Just something to factor into your planning beyond just which tax return the income appears on.