Has anyone used a Backdoor Roth IRA in this situation? My income is too high for regular Roth contributions, but my financial advisor mentioned this strategy with my severance.

Another option to consider is opening a Solo 401(k) if you do any freelance or consulting work while receiving severance. Even small amounts of self-employment income can qualify you, and the contribution limits are much higher than IRAs - up to $70,000 for 2025 if you're under 50. I was in a similar situation and started doing some freelance work on the side. The Solo 401(k) allowed me to shelter a significant portion of both my freelance income AND make additional contributions beyond what I could with just an IRA. You can contribute both as the employee (up to $23,500) and as the employer (up to 25% of net self-employment income). Just make sure to set it up before December 31st if you want to make contributions for this tax year. The paperwork is pretty straightforward and many brokerages offer them with minimal fees.

lol the irs is such a clown show these days. theyre so backed up they probably wont even look at ur return til 2027 🤡

Just went through something similar last year. The IRS did request documentation for my child care credit during correspondence audit. Even without original receipts, I was able to piece together proof using bank statements, credit card records, and a signed statement from my daycare provider confirming the amounts and dates. Also had to provide Form W-10 info for the provider. It was stressful but manageable if you can show a clear payment trail. The key is being proactive about gathering alternative documentation now.

HR manager here - I see this issue come up frequently and wanted to add some practical advice. The tax professional who answered earlier is absolutely correct about option #2 being right, but here's what I recommend for actually getting it resolved: 1. Request a meeting with both your benefits administrator AND someone from payroll - they often work in separate systems that don't communicate well 2. Bring documentation: your marriage certificate, the date you submitted your qualifying life event paperwork, and print-outs showing your spouse is now listed as "spouse" rather than "domestic partner" in your benefits system 3. Ask them to show you exactly where in their payroll system the imputed income calculation is still being applied - sometimes it's a manual override that someone forgot to remove 4. If they push back, ask them to cite the specific regulation they're using for their "option #3" - most of the time they can't because they're just following outdated internal procedures I've seen this resolved dozens of times, and it's usually a simple system configuration issue rather than a complex tax law interpretation. The key is getting the right people in the room who actually understand how both systems work together.

This is such a common issue and I'm glad to see so many helpful responses! I went through this exact same situation when I got married in 2022, and it was incredibly frustrating dealing with our corporate HR department. What finally worked for me was documenting everything in writing. I sent an email to both HR and payroll with: - Copy of our marriage certificate - Screenshots of my benefits portal showing spouse status - Paycheck stubs showing continued imputed income after marriage date - A clear request for correction with specific dollar amounts I also referenced IRS Publication 15-B and included the exact language about how marriage changes the tax treatment of health benefits immediately, not at year-end. Having everything in one email thread made it much harder for them to ignore or claim they didn't understand the issue. The key was being persistent but professional - I followed up every week until it was resolved. It took about 6 weeks total, but they eventually corrected all the payroll records and issued a refund for the excess withholding. Don't let HR brush you off on this - you're absolutely right that the imputed income should stop on your marriage date, and you deserve to have the overpayment corrected!

This thread has been incredibly helpful! I'm dealing with the exact same issue right now. My return has been rejected 4 times for name/SSN mismatch and I was starting to think I was losing my mind. I'm going to try a few of the suggestions here - first checking if my W-2 has any subtle differences from my SS card (never would have thought of that!), and then maybe trying the all caps format that Omar mentioned. One thing I wanted to add - I called my tax software company (H&R Block) and they said this is happening A LOT more this year than usual. The rep told me they've had tons of calls about this specific rejection code. She suggested that if nothing else works, I might need to print and mail my return instead of e-filing, which would bypass the electronic name matching entirely. Really hoping I don't have to resort to paper filing since I need my refund ASAP, but at least it's good to know there's a backup option if all else fails!

I've been following this thread and wanted to share what finally worked for me after dealing with the same rejection nightmare for weeks! After trying everything mentioned here (checking W-2 vs SS card, all caps, waiting 48 hours, etc.), I discovered the issue was actually with how my tax software was handling a suffix in my name. My legal name is "Michael Johnson Jr." but my W-2 just had "Michael Johnson" - the software was automatically adding the "Jr." from my profile but my employer didn't include it. The key was to enter my name EXACTLY as it appears on my W-2, even if that's different from my SS card. The IRS matches against what your employer reported, not necessarily what's on your SS card. Once I removed the "Jr." from my filing (matching my W-2 exactly), it went through immediately. So definitely compare ALL your tax documents (W-2s, 1099s, etc.) character by character against what you're entering in your tax software. Sometimes the mismatch isn't with the IRS records directly, but with how your employer reported your information vs. how you're filing. Hope this helps someone avoid the stress I went through!

When I started my first "real" job after college, I accidentally marked exempt on my W4 too. It's an easy mistake to make! The way I handled it was to immediately fix my W4 with HR and then have extra withholding taken out for the rest of the year to try to catch up. If you can afford it, you could increase your withholding for the remainder of 2025 to offset some of what you'll owe. On your W4, there's a line that lets you specify additional withholding from each paycheck. This won't solve the whole problem, but it might reduce the amount you need to pay when you file.

Is anyone going to mention that the employer is partially at fault here? I work in HR and we're supposed to verify that people claiming exempt actually qualified for exempt status the previous year. Like if you had a tax liability last year, you technically can't claim exempt this year. There are specific requirements for claiming exempt status.