This thread has been such a lifesaver! I got an EIN about 8 months ago for a freelance design business I was planning to start, but then I landed a full-time job that I love and never pursued the business idea. I've been carrying this low-level anxiety about that unused EIN ever since. Reading through everyone's real experiences here is so much more helpful than the generic advice you find elsewhere online. The fact that multiple people have confirmed with actual IRS agents that unused EINs don't create filing obligations when there's zero activity is really reassuring. I'm definitely going to follow the approach that @Danielle Mays, @Tyler Lefleur, @Dmitry Sokolov and others have taken - filing a zero return even though it's not technically required. The peace of mind argument is so compelling, and hearing that the IRS processed these returns normally without any questions makes me feel confident it's the right move. Thanks everyone for sharing your actual experiences rather than just speculation. This community is incredibly helpful for navigating these confusing situations!

I've been following this thread closely as someone who went through the exact same situation about 6 months ago. Got an EIN for a tech startup idea that never materialized - no business activity whatsoever, just like @Yuki Ito described. After reading all these helpful experiences, I wanted to add one more perspective: I initially tried to just "ignore" the unused EIN and move on, but the uncertainty kept bothering me. Finally decided to take the advice several people mentioned here about filing a zero return for peace of mind. The process was incredibly straightforward. Since I had applied for the EIN as a sole proprietorship, I just filed a Schedule C with my personal tax return showing $0 income and $0 expenses, with a note that the business was inactive. The IRS processed it normally, and now I have that official record that eliminates any future questions. What convinced me was realizing that the small time investment (maybe an hour total) was so much better than months of wondering "what if I should have done something." Now I can focus on other things without that nagging worry in the back of my mind. Sometimes the peace of mind is worth way more than whether something is technically "required" or not!

As someone new to this community who's been struggling with the exact same W4 confusion, this entire thread has been incredibly helpful! My spouse and I have been married for about a year and both work W2 jobs (I make around $52K, they make $48K), and we've been doing the basic "married filing jointly" setup without really understanding the implications. Reading through everyone's experiences, I'm realizing we've probably been lucky so far - we typically get a small refund of $200-400, but after seeing how many people got hit with huge tax bills, I'm wondering if we should proactively check the Step 2c box to make sure we don't run into problems later if our income changes. The explanation about how each employer calculates withholding based on individual income rather than combined household income is such a lightbulb moment! It never occurred to me that payroll systems don't know about the other spouse's income when calculating withholding. Since we have exactly two jobs between us, it sounds like we should both check the 2c box on our W4s. Even though we're not currently underwithholding, it seems like this would give us more accurate withholding and peace of mind. Has anyone else made this change preemptively, or is it usually only necessary when you're already owing money at tax time? Thanks to everyone for sharing such detailed experiences - this community is amazing for navigating these confusing tax situations!

As a newcomer to this community, I've been following this thread closely because my spouse and I are facing the exact same W4 dilemma! We both work W2 jobs (I make about $47K, spouse makes $53K) and have been married filing jointly for two years now. Reading through everyone's experiences has been so enlightening - especially the explanation about how each employer treats your individual income as the total household income for withholding purposes. We've been getting small refunds of around $300-500 each year, but after seeing how many couples got blindsided by huge tax bills when circumstances changed, I'm realizing we should probably be more proactive. The Step 2c checkbox sounds like exactly what we need since we have precisely two jobs between us. Even though we're not currently underwithholding, it seems like using 2c would make our withholding more accurate and give us better protection against future surprises if our income levels change. This community has been incredibly helpful for understanding these confusing tax forms! It's amazing how many of us were dealing with the same confusion about the redesigned W4. Based on all the advice shared here, I think we're going to update both our W4s to check the 2c box rather than waiting for a problem to develop. Thank you to everyone who shared their experiences - it's so valuable to learn from others who've navigated these same challenges!

Just to add a small clarification that might help - there's also a separate ordering rule for Roth IRA withdrawals that determines what comes out first: 1) Regular contributions come out first (always tax and penalty free) 2) Conversion contributions come out next (might be subject to penalties if within 5 years of conversion and under 59½) 3) Earnings come out last (subject to tax and possibly penalties if you don't meet requirements) Since you're over 59½ and if your first Roth contribution was indeed in 2019, then starting in 2024, everything comes out tax and penalty free including earnings. This assumes 2019 was truly your first-ever Roth IRA.

This is a really helpful discussion! I wanted to add one more consideration that might be relevant for your planning. Even though you'll be able to withdraw everything tax and penalty-free once you meet both the age and 5-year requirements, it's worth thinking about the timing strategically. Since Roth IRAs don't have required minimum distributions (RMDs) like traditional IRAs do, you might want to consider leaving the money invested longer if you don't immediately need it. The tax-free growth can continue indefinitely, and it's one of the best tax-advantaged accounts you can pass to heirs. Also, if you're planning any large withdrawals, consider spreading them across multiple tax years to avoid bumping yourself into higher tax brackets with other income - though this is more relevant if you have traditional IRA distributions or other taxable income in the same years. The flexibility of having penalty-free access is great peace of mind, but the longer you can let that money grow tax-free, the better!

This is such a timely discussion for me! I'm a newer agent (2 years in) but had a breakout year and am projected to hit around $400k this year. I've been putting off the S Corp decision but clearly need to stop procrastinating. One question I haven't seen addressed - does the IRS look at this differently for newer agents vs established ones? I'm worried that since I don't have a long track record, they might scrutinize my salary determination more closely. Like, can I justify the same salary percentage as someone who's been in the business for 10+ years? Also, for those who made the switch mid-year, how did you handle the transition? Did you have to do a partial year S Corp election or wait until the following tax year?

Great question about newer agents! The IRS doesn't explicitly treat newer vs. established agents differently for reasonable compensation, but your track record can definitely influence how you justify your salary determination. For a newer agent hitting $400k, you'd want to emphasize factors like: - Hours worked (newer agents often work longer hours) - Your direct involvement in all aspects of transactions - Market conditions that contributed to your success - Comparable salaries for employed agents with similar production levels The key is documentation. Since you don't have years of historical data, focus on current market comparables and your specific duties. Many newer high-producers actually justify higher salary percentages (50-60%) because they're doing ALL the work themselves. Regarding mid-year transitions: You can make an S Corp election mid-year, but it's complex. You'd need to file Form 2553 and potentially Form 8832. Many CPAs recommend waiting until January 1st to keep things cleaner, but if your projected savings are substantial, the mid-year election might be worth the extra complexity. Definitely run the numbers with a CPA who specializes in real estate to see if the partial-year savings justify the additional complications.

I'm going through this exact same situation right now! Got my regular refund back in March, then just received an unexpected check for $623 last Tuesday. I've been stressing about it all week wondering if it's legitimate or some kind of error that's going to cause me problems later. This thread has been incredibly reassuring - I had no idea these automatic adjustments were so common! Reading everyone's experiences makes me feel much less anxious about the whole thing. It sounds like the IRS systems are constantly making corrections and adjustments behind the scenes. I'm definitely going to check my IRS account transcript first thing tomorrow morning like everyone has recommended. The specific tips about looking for codes in the 290s and 300s, and knowing there's a code lookup tool, gives me a clear plan instead of just worrying about it. It's also really helpful to know about that Treasury Department check verification line (1-855-868-0151) that Brielle mentioned. Having multiple ways to verify the legitimacy of the check makes me feel much more confident about the whole situation. Thanks to everyone for sharing their experiences and practical advice! This community is amazing for helping navigate these confusing tax situations.

I just wanted to add my voice to everyone saying check your IRS transcript first - it really is the fastest way to get answers! I went through this same situation about 6 months ago and was terrified I'd somehow messed up my taxes or that the IRS would demand the money back later. Turned out they had automatically applied the Recovery Rebate Credit that I was eligible for but hadn't claimed on my original return. The transcript showed exactly what happened with a clear code explanation. One thing I'll add that I haven't seen mentioned - if you do end up needing to call the IRS for any reason, try calling right when they open at 7 AM. I had much better luck getting through during the first hour they're open versus trying later in the day. But honestly, the transcript check will probably give you everything you need without having to call at all. Don't stress too much about it - these automatic adjustments happen all the time and are usually good news!