Just a tip - if you already filed without including the 1099-R or without the proper penalty, you'll need to file an amended return. The IRS will definitely catch this since they get a copy of the 1099-R too, and you'll end up with penalties and interest if you don't fix it yourself.

Brianna, I feel your pain! Code J distributions can be stressful to deal with. Just to add to what others have said - make sure you keep good records of why you took the distribution and when. Even though moving expenses don't qualify for the penalty exception, having documentation helps if the IRS ever asks questions. One thing that might help for future reference - if you change jobs again and need cash, consider taking a loan from your 401k instead of a distribution. Loans don't trigger taxes or penalties as long as you pay them back on schedule. Obviously too late for this situation, but worth knowing for the future! Also, when you're calculating your taxes, don't forget that the $8,500 gets added to your regular income, so it might bump you into a higher tax bracket for the year. The penalty is definitely painful, but at least now you know what to expect when filing.

This is such a helpful thread! I've been in similar situations and really appreciate everyone sharing their experiences. One thing I learned recently is that you can actually check the status of a GoFundMe campaign before donating by looking at how it's set up. If you see "Beneficiary: [Organization Name]" instead of an individual's name, there's a good chance it might be tax deductible. Also, for those considering the church route - many churches have established benevolence funds specifically for situations like this. You could approach your church leadership about setting up a fund for community members facing medical or other hardships. That way your donations would be deductible, and the church could help people in your community (though as others mentioned, you can't earmark funds for specific individuals). Another option is looking into local community foundations - they often have emergency assistance programs and are definitely qualified organizations for tax purposes.

Great question about community foundations @Amelia Dietrich! The easiest way to find local community foundations is through the Council on Foundations website - they have a "Find a Community Foundation" tool where you can search by zip code or city. Most major metropolitan areas have at least one, and many smaller communities do too. You can also try searching "[your city/county name] community foundation" on Google. Many of them have emergency assistance or hardship funds that are exactly what you're looking for - they help local residents with medical bills, housing emergencies, disaster relief, etc. Another tip: if you call 211 (the United Way helpline), they can often connect you with local foundations and other assistance programs in your area. They're like a one-stop resource for finding help and ways to give locally. The nice thing about community foundations is they often have faster response times than larger national charities, and your donations really do stay in your local community. Plus they usually have established relationships with local hospitals, service providers, etc., so they might be able to help your neighbors more effectively than you could individually.

Has anyone considered the W-2 wage limitation for QBI? Since OP is in the 24% bracket with joint income, they might face QBI limitations if they don't have sufficient W-2 wages. The deduction could be limited to 50% of W-2 wages paid by the business. Also for 2023, did you take any money out of the business? If so, the IRS might reclassify those as constructive dividends which wouldn't qualify for QBI. The cleanest solution might be filing an amended S-corp return showing reasonable compensation.

You're in a tricky spot, but it's not insurmountable. Since you didn't run payroll in 2023, you'll need to address this compliance issue head-on with your accountant. The IRS expects S-corp owner-employees to receive reasonable compensation through W-2 wages before taking distributions. Without proper payroll, you risk having all $71.5k treated as wages subject to employment taxes, which would eliminate the S-corp tax advantages. For QBI, the deduction applies to the business income AFTER reasonable compensation is paid. So if you can establish that $49k salary retroactively (through amended returns or other corrective measures your CPA recommends), the remaining income could potentially qualify for QBI. One silver lining: since your combined income keeps you in the 24% bracket, you're below the taxable income thresholds where QBI gets limited by W-2 wages or depreciable property. This means if you can properly separate salary from business income, you should get the full 20% QBI deduction on the qualifying portion. Document everything about your reasonable compensation analysis - industry standards, time spent, responsibilities, etc. This will be crucial for your accountant to determine the best path forward, whether that's amended returns, late payroll filings, or other compliance solutions.

Don't beat yourself up too much about forgetting - you're definitely not the first person this has happened to! The good news is that since you're pretty sure you're owed a refund, you won't face any penalties for filing late. Just to add to what others have said: when you do mail in your 2021 return, make sure to use certified mail with a return receipt so you have proof the IRS received it. Keep copies of everything for your records too. One more thing - double-check that you actually didn't file anything for 2021. Sometimes people file and then forget, or maybe you filed an extension? You can request a tax transcript from the IRS website to see if they have any record of a 2021 filing under your SSN. Better to check now than accidentally file a duplicate return! Good luck getting your refund - hopefully it's a nice little windfall when it finally arrives!

I'm in a very similar situation - found my 2021 documents in a box last month and realized I never filed! Reading through all these responses has been super helpful. A few things I learned from my research that might help you too: First, definitely check if you already filed using the IRS transcript tool like TommyKapitz mentioned - I was paranoid I had filed and forgotten, but turns out I really hadn't. Second, if you're going the paper route, make sure you're using the correct 2021 forms from the IRS website, not current year forms. The tax tables and some rules were different back then. One thing I haven't seen mentioned yet - if you moved since 2021, make sure your current address is updated with the IRS before you file. You can do this online or by phone. Otherwise your refund check might get sent to your old address and you'll have even more delays. Also, don't forget to include any 1099s you might have received in 2021 - interest, dividends, freelance work, etc. It's easy to focus on just the W-2 and miss other income sources from that long ago. Hope this helps, and good luck with your refund! At least we're not alone in this mistake.

This is such a valuable discussion! I work in HR and constantly get questions about state tax differences from our remote employees. One thing I'd add that hasn't been mentioned yet is that some states have reciprocity agreements that can complicate the picture. For example, if you live in Pennsylvania but work in New Jersey (even remotely for a NJ-based company), you might not owe NJ income tax thanks to their reciprocity agreement. But the specialty payroll taxes like disability insurance don't always follow the same rules. Also, I wanted to highlight something for anyone considering Washington state - while they don't have state income tax, their long-term care tax (WA Cares) is pretty unique. You can opt out if you have private long-term care insurance, but you have to do it during specific enrollment periods and provide proof of coverage. Once you opt out, you can never opt back in, even if you lose your private coverage later. For the original poster's table, you might want to add a column for "Special Considerations" to capture things like opt-out provisions, reciprocity agreements, and wage caps. These details can significantly impact someone's actual tax burden beyond just the basic rates. Has anyone dealt with the complexities of changing state residency mid-year while working remotely? The apportionment rules can get pretty complicated depending on where your employer is based versus where you're physically working.

This has been such an enlightening thread! I'm a tax attorney who specializes in multi-state issues, and I wanted to add a few important clarifications and additional states to help complete your comprehensive list. **Additional State Payroll Taxes to Consider:** **Connecticut**: 0.5% Paid Family and Medical Leave (employee portion) **Rhode Island**: 1.2% Temporary Disability Insurance + 1.1% Temporary Caregiver Insurance **New York**: ~0.5% for Disability Benefits Law + Paid Family Leave combined **Massachusetts**: 0.68% Paid Family and Medical Leave (increased for 2025) **Critical Points Often Overlooked:** 1. **Multi-state workers**: If you work remotely for an out-of-state employer, you generally pay taxes based on where you physically perform the work, NOT where your employer is located. However, some states have "convenience rules" (like NY) that can override this. 2. **Partial year residents**: When you move mid-year, most states prorate based on the actual days of residency/work location, but the calculation methods vary significantly. 3. **Reciprocity limitations**: As Lucas mentioned, reciprocity agreements typically only apply to income taxes. Disability, family leave, and unemployment taxes usually follow the work location state regardless of reciprocity. For your table format, I'd strongly recommend separating this into two tables: one for income tax ranges and another for mandatory payroll programs with specific rates. The mixing of progressive income taxes with flat-rate specialty taxes makes comparison difficult. Also worth noting: several states are currently debating paid family leave legislation for 2025-2026 implementation, including Michigan, Ohio, and Iowa. The landscape is definitely shifting rapidly!