Watch out if you're using TurboTax to file! I had this exact situation last year and TurboTax incorrectly tried to make me pay taxes on the ENTIRE distribution, not just the earnings. Had to manually override it by entering the taxable amount exactly as shown on the 1099-R instead of letting TurboTax calculate it.

This is such a common source of confusion! I went through something similar last year and want to add a few practical tips that helped me: 1. Double-check your 1099-R box 2a (taxable amount) - it should only show the earnings portion, not your full contribution amount. If it shows the full amount, your brokerage may have made an error. 2. Keep detailed records of the timeline - the fact that you requested the return of excess contributions before your extended filing deadline (you filed in July 2023) is crucial for confirming this gets reported on your 2023 return. 3. If you're using tax software and it's giving you trouble with the PJ code, try entering it as "other retirement distributions" rather than letting it auto-categorize. This often bypasses the software's incorrect assumptions about Roth distributions. The key thing to remember is that since you corrected the excess contribution before filing your 2022 return, it's treated as if the contribution never happened for 2022 tax purposes. That's why everything gets reported in 2023 - the year the actual distribution occurred. Also worth noting: save all your documentation about this transaction. The IRS sometimes sends automated notices about retirement distributions, and having your paperwork organized will save you headaches if you need to respond to any correspondence.

I appreciate everyone sharing their experiences with similar situations - it's really helpful to see how others have handled missing 1099 forms! As someone who's been through tax season stress before, I'd echo what the tax professionals have said: for a $28 difference on a return with a $6.5k refund, waiting for your original return to process is definitely the way to go. The IRS can clearly see you're not trying to hide income when you're due such a large refund. One thing I'd add is to make sure you keep good documentation of when you discovered the error and your decision-making process. If you do get any correspondence from the IRS later (which is unlikely for such a small amount), having a paper trail showing you identified and planned to correct the mistake promptly will work in your favor. The automated processing for your e-filed return should get you your refund quickly, and then you can file the 1040-X without the time pressure. Sometimes the best approach is the simplest one - especially when multiple tax professionals are giving you the same advice!

I'm a newcomer here but dealing with something very similar! I just e-filed my return yesterday and realized this morning that I completely missed a 1099-MISC for some freelance work I did last year. The additional tax would only be about $19, but I'm panicking because it's my first time making a tax mistake like this. Reading through all these responses has been incredibly reassuring. It sounds like the consensus from both tax professionals and people with actual experience is pretty clear: wait for the original refund to process first, then file an amended return. What I found most helpful was learning that e-filed returns go through automated processing (2-3 weeks for refunds) while amendments require manual review (16+ weeks). For such small amounts, it makes total sense to get the original refund first rather than getting stuck in the slower amendment process. I'm also relieved to learn that the IRS document matching doesn't typically happen until late summer/fall, so there's plenty of time to self-correct. The point about voluntary compliance being viewed favorably by the IRS really takes the pressure off too. Thanks everyone for sharing your experiences - it's so helpful to see that this is a common situation with a straightforward solution rather than the catastrophe I was imagining in my head!

Wait, I'm still confused about Form 1065 Schedule K line 20 code AG. Is this something every partnership needs to fill out? We're a really small operation, just two partners with around $450k in annual revenue. Do we even need to worry about this section 448(c) stuff?

Great thread everyone! I just want to emphasize something important that might get overlooked - when calculating your gross receipts for code AG, make sure you're using the correct 3-year period. For your 2023 return, you need the average of 2020, 2021, and 2022 gross receipts, NOT including 2023. I made this mistake initially and included the current year in my calculation. The section 448(c) test specifically looks at the "3-taxable-year period ending with the taxable year that precedes such taxable year." So you're always looking backward, never including the current filing year. Also, keep good records of this calculation because you'll need to update it each year. The threshold can change annually (it was $26M for 2022, now $27M for 2023), and your 3-year average will shift as you drop the oldest year and add a new one to the calculation.

I went through this exact same process about 6 months ago and totally understand the anxiety! The good news is that it's really not as scary as it seems at first. I called the number on my 5747C letter and yes, the wait time was brutal - about 2.5 hours on hold - but once I got through, the actual verification was pretty straightforward. The agent asked me to confirm basic info like my address, filing status, and some line items from my current and prior year returns. They also asked about my employer and a few specific deductions I claimed. The whole conversation took maybe 20 minutes once I was connected. My refund was issued exactly 6 weeks after the call, which was actually faster than they initially told me to expect. Just make sure you have your tax documents handy when you call - both this year's and last year's returns. The IRS agent was actually pretty helpful and explained that my return was flagged because I had moved states and changed jobs, which created an unusual pattern in their system. Don't stress too much about it - it's really just a verification process to make sure you are who you say you are!

I got a 5747C letter about three weeks ago and finally made it through the verification process yesterday. I wanted to share what worked for me since I know how stressful this can be! I tried calling multiple times but kept getting disconnected or couldn't get through at all. Finally decided to schedule an in-person appointment at my local Taxpayer Assistance Center, which was honestly the best decision. The appointment was scheduled for about 10 days out, but the actual process was so much smoother than trying to call. The IRS representative was really professional and walked me through everything step by step. She explained that my letter was triggered because I had claimed the Earned Income Tax Credit for the first time this year after getting a new job. Apparently that's a common trigger for their fraud detection system. I brought my driver's license, Social Security card, current year tax return, last year's return, and all my W-2s. The whole appointment took about 25 minutes, and she was able to verify my identity on the spot. She told me to expect my refund within 6-9 weeks, but honestly just having it resolved felt like a huge weight off my shoulders. If you're struggling with the phone lines, I'd really recommend trying the in-person route if you have a Taxpayer Assistance Center nearby. Much less frustrating than sitting on hold for hours!

I'm going through the exact same thing right now! Got my DDD for 4/3 this morning too and have been refreshing SBTPG every few hours. Based on what everyone's saying here, it sounds like we should see an update within the next day or two. Really hoping it comes through soon since I've got some overdue bills that need attention. The waiting is honestly the worst part of this whole process - especially when you're counting on that money for essential expenses. Keep us posted on when yours updates!

I've been tracking SBTPG timing for the past three years and can share some patterns I've noticed. Generally, SBTPG updates to "funded" status within 24-48 hours after your transcript shows a DDD, but there are a few factors that can affect this: 1. Day of the week your DDD falls on - weekend DDDs often see SBTPG updates on the following Monday 2. Tax season volume - early April is peak time so there might be slight delays 3. Whether you have fees being deducted - sometimes this adds a few hours to processing For your 4/3 DDD, I'd expect SBTPG to show funded by Friday evening at the latest. Once it shows funded, most banks post the deposit within 24 hours, though some (like Chime, Capital One) do it almost immediately. The key thing to remember is that your DDD is when the IRS plans to send the money, not necessarily when SBTPG receives it. Hang in there - based on the timeline, you should have your funds by early next week!