Does anyone know if contributing to a SEP IRA instead would be a better option in this situation? My business income varies a lot year to year.

This is exactly the kind of situation where getting the calculation right is crucial! Based on what others have shared here, it sounds like your LLC income will likely count toward your MAGI regardless of distributions, but the specific tax treatment depends on your LLC structure. I'd strongly recommend getting a definitive answer before making any contributions to avoid penalties. The backdoor Roth strategy mentioned by Wesley could be a great backup plan if your total income does push you over the limit. One thing to consider - if your LLC income is significant enough to potentially disqualify you from direct Roth contributions, you might also want to explore whether maxing out a SEP-IRA could help reduce your MAGI enough to get back under the Roth income limits. Sometimes the deduction from business retirement contributions can create enough breathing room to qualify for both strategies. Make sure to document everything carefully whichever route you take. The IRS is pretty strict about retirement contribution limits, so having your calculations and reasoning well-documented will save you headaches later.

I went through something very similar when my mom passed away in 2020. Got a CP2000 notice about 18 months later for her 2019 return - turned out her former employer had issued a corrected 1099-R that we never received. Here's what I learned: The IRS doesn't automatically know you were the executor unless you've communicated with them in that capacity or filed certain forms. They're just sending notices to the last known address, which is why you received it. The key thing to understand is that as long as you distributed the estate assets in good faith without knowledge of this tax liability, you're generally protected from personal liability. The IRS can only collect from whatever assets remain in the estate - if there are none, they're out of luck. I'd strongly recommend responding to the CP2000 rather than ignoring it. Send them a letter explaining that your father is deceased (include a copy of the death certificate), that the estate has been closed and distributed, and that there are no remaining assets to satisfy the tax liability. This creates a paper trail showing you handled everything properly. In my case, after I sent this documentation, the IRS placed the account in "currently not collectible" status and I never heard from them again. The peace of mind was definitely worth taking the time to respond properly.

I'm going through something similar right now with my grandmother's estate. Got a CP2000 notice about 8 months after she passed for a missing 1099-B from some stock sales. The amount they're claiming is around $4,300. What's been helpful for me is understanding that this is actually pretty common - the IRS systems don't automatically know when someone passes away, so these notices can keep generating for months or even years after death. The key thing I learned from my estate attorney is that your personal liability as executor is very limited as long as you acted in good faith. Since you mentioned the estate was already settled without probate, that suggests it was a smaller estate that qualified for simplified procedures. In most states, if you distributed assets to beneficiaries without knowing about this tax debt, you're protected under "good faith executor" provisions. I'd definitely recommend responding to the notice rather than ignoring it, even though it's stressful. Include a copy of the death certificate and a simple letter explaining that the estate has been closed and distributed. Most of the time, the IRS will just close these cases when they realize there are no assets left to collect from. The peace of mind from handling it properly is worth the effort, and it protects you from any potential complications down the road.

Just a heads up - I do similar advantage play and got audited last year. The biggest issue wasn't the gambling itself but that I wasn't filing quarterly estimated tax payments. Since there's no withholding on gambling winnings (unlike a regular job), the IRS expects you to make quarterly payments if you're going to owe a significant amount. If you're making $40K profit, you definitely need to be making estimated tax payments throughout the year. Otherwise, you'll get hit with underpayment penalties on top of the taxes you owe.

This is a really complex situation and I appreciate everyone sharing their experiences. As someone who's dealt with similar tax issues, I want to emphasize a few key points: First, the distinction between hobby gambling and professional gambling is crucial for your tax strategy. If the IRS considers you a professional gambler (based on factors like regularity, time invested, expertise, and profit motive), you'd report your income on Schedule C and could deduct business expenses like travel, equipment, and even home office costs. However, you'd also pay self-employment tax. Second, for advantage play specifically, the IRS has been paying more attention to this activity recently. The systematic nature of bonus hunting and arbitrage betting can actually work in your favor for establishing professional status, but it also means you need bulletproof documentation. Third, regarding the services mentioned here - while they might be helpful, make sure any tax professional you work with understands the specific nuances of advantage play. Not all CPAs are familiar with how promotional offers, cashback, and arbitrage betting should be categorized. Finally, consider setting aside 25-30% of your profits for taxes from the start. Gambling income is taxed as ordinary income, so depending on your bracket, you could be looking at a significant tax bill. The quarterly payment advice mentioned earlier is spot-on - don't wait until next April to deal with this. Good luck with your tax planning!

Has anyone considered the 24-credit rule? IRS also says a student is full-time if they're enrolled in enough credits to complete a typical 4-year degree program in 4 years. That's usually 24 credits in a year. So even if you don't meet the 5-month rule, you might still qualify as full-time if you took enough credits during those 4 months.

Don't stress too much about this! I had a very similar situation my freshman year. The key thing to understand is that the IRS looks at whether you were enrolled as a full-time student according to your school's standards for at least 5 months during the tax year. Since you mentioned you were taking 15 credit hours, your school definitely considered you full-time. The question is just whether you can get to 5 months of enrollment. Here's what often helps students in your situation: 1. Check if your school counts orientation week (even if it was just a few days in late August) as part of the enrollment period 2. See if finals week or any post-semester activities in January count toward enrollment 3. If you're continuing in spring semester, that would definitely put you over the 5-month requirement for the tax year I'd recommend getting an official enrollment verification letter from your registrar that shows the exact dates of your enrollment period. You might be surprised to find that your "4-month" semester actually spans 5 calendar months when you include all the official academic activities. Your parents should still be able to claim you as a dependent as long as you meet the other dependency requirements. The timing of your semester shouldn't affect that!

Quick heads up - something nobody mentioned yet is that if you go the Solo 401k route, once your account balance hits $250,000, you'll need to file Form 5500-SF annually. Not a huge deal but something to be aware of for future planning.

One thing I'd add that might be helpful - if your consulting income varies significantly year to year (like yours does between $55k-$105k), you might want to consider making quarterly estimated tax payments that include your retirement contributions. This helps with cash flow management and ensures you're not scrambling at year-end. Also, since you're already with Vanguard, their Solo 401(k) has really low fees and good investment options. When you call them, ask about their "Individual 401(k)" - that's what they call their Solo 401(k) product. They'll walk you through the whole process and can even help you figure out the optimal contribution strategy based on your projected income. One last tip: keep detailed records of all your business expenses from the consulting work. The more legitimate business expenses you can deduct, the higher your net profit will be, which means you can potentially contribute more to the retirement account (since it's based on that 25% of net self-employment income calculation).