Just want to add a quick note about timing for anyone else who might be in a similar situation. The fact that you received your 1099-R already is actually great timing - some brokerages are notoriously slow getting these forms out, and you definitely want to have it in hand before your tax appointment. One thing that might give you extra peace of mind: you can always ask your tax preparer to show you exactly where the 1099-R information appears on your return and how it's being treated. A good tax pro should be able to walk you through the forms and show you that while the transaction is reported, it's not adding to your taxable income. This way you can see for yourself that it's not affecting your refund. Don't stress too much about this - Code N recharacterizations are pretty routine for tax preparers, especially during tax season. Your situation is more common than you might think!

@Tyler, you're absolutely right to not be too worried about this! I went through the exact same situation two years ago - accidentally funded the wrong IRA type and had to do a recharacterization. The Code N on your 1099-R is actually the best code you could have gotten for this situation. One thing that really helped me understand what was happening was learning that the IRS treats recharacterizations as if the money was never in the wrong account to begin with. So in your case, it's as if you originally contributed directly to the Roth IRA from day one. The 1099-R is just paperwork to document the movement, but it doesn't create any tax consequences. Your tax preparer will likely report this on Form 8606 if you're dealing with nondeductible Traditional IRA contributions, or it might just be a simple entry showing the recharacterization with no tax impact. Either way, your refund should be completely unaffected. The fact that you caught and fixed this mistake actually shows you're being responsible with your retirement planning!

I'm at week 11 with my amended return and finding this thread incredibly helpful! Filed in late July to correct some miscalculated state tax deductions that should result in about $2,100 back. Like everyone else here, I'm stuck with the perpetual "received" status on the IRS tool. What's giving me some peace of mind is seeing how many people are in similar situations with similar timelines. I was starting to wonder if my CPA made an error or if something was flagged, but clearly this is just the new reality for amended returns in 2025. I'm definitely taking the documentation advice to heart - just started a tracking spreadsheet with weekly status checks and screenshots. It's frustrating that we have to create our own paper trails, but better to be prepared given these processing times. The interest on delayed refunds mentioned by @Ravi Choudhury is news to me - at least there's some small compensation for this ridiculous wait! Based on everyone's shared experiences, it looks like I've got another 7-11 weeks to go before seeing any movement. Thanks for creating this supportive community around what's obviously a widespread problem!

I'm at week 9 with my amended return and this thread is such a relief to find! Filed in early August to claim some overlooked dependent care expenses that should get me about $1,400 back. The "Where's My Amended Return" tool has been showing "received" since I filed, with zero movement. What's been driving me crazy is that I keep second-guessing whether I did something wrong or if there's an issue with my paperwork. But reading everyone's experiences here makes it clear this is just the brutal reality of IRS processing times right now. It's honestly insane that in 2025 we're dealing with 20+ week processing times for basic corrections. I'm definitely going to start the documentation approach everyone's mentioned - taking weekly screenshots and keeping a log. It shouldn't be necessary, but clearly we need to protect ourselves given how broken this system is. Based on all the timelines shared here, it looks like I'm in for another 9-13 weeks of waiting. At least knowing what to expect helps manage the anxiety! Thanks to everyone for sharing their experiences - it's reassuring to know we're all stuck in this together. Here's hoping the IRS gets their act together soon, though I'm not holding my breath.

Has anyone had their tax software miscalculate their blended rate? I'm wondering if OP's concern about verifying the calculation is because something looks off in their numbers.

I went through the exact same confusion last year! The difference between your 18.2% blended rate and 32% tax bracket is totally normal and actually shows the tax system is working as designed. Think of it this way: if you made $100k taxable income, you're NOT paying 32% on all $100k. You're paying 10% on the first ~$23k, 12% on the next chunk, 22% on the next chunk, and so on until only the final dollars get hit with that 32% rate. When you average it all out, you get that lower blended rate. To double-check your calculation, just take your total federal income tax (Form 1040, line 24) and divide by your taxable income (line 15). That should match the 18.2% your FreeTaxUSA is showing. As for owing money when you expected a refund - that's more about your withholding throughout the year versus your actual tax liability. The blended rate calculation itself is probably correct; you might have just had less tax withheld from your paychecks than what you actually owe.

This is a great discussion and I've learned a lot from everyone's experiences. I'm in a similar boat with 4 rental units and have been frustrated about not being able to use that income for retirement contributions. One question I haven't seen addressed: How do you handle the transition year when you're setting up this structure? I assume you can't retroactively convert rental income from earlier in the year to "earned" management income, so would you only be able to contribute to your Roth based on the management salary earned from the date you establish the LLC forward? Also, for those who've implemented this - do you find it's worth the extra complexity and costs (additional tax filings, separate business accounts, etc.) for the ability to make Roth contributions? I'm trying to weigh whether the long-term tax-free growth benefits outweigh the administrative hassle and additional self-employment taxes.

I've been following this discussion closely as someone in a very similar situation with rental properties. One additional consideration I wanted to mention is the importance of documenting your time spent on property management activities from the beginning. I started tracking my hours last year when I first learned about this strategy - tenant communications, property inspections, maintenance coordination, marketing vacant units, bookkeeping, etc. I was shocked to discover I was spending 8-12 hours per week on management tasks across my 4 properties. That level of documented work makes it much easier to justify a reasonable management salary. Also, for those worried about IRS scrutiny, I'd recommend keeping detailed records of what professional property management companies in your area charge. In my market, they typically charge 10-12% of gross rents plus additional fees for leasing and maintenance coordination. When you compare that to paying yourself a modest salary for the same work, it actually looks very reasonable and defensible. The documentation piece can't be overstated - time logs, service agreements between your entities, invoices, and separate business bank accounts are all crucial for making this structure bulletproof if the IRS ever asks questions.

Don't forget you can also deduct state and local taxes (SALT) up to $10,000 when itemizing! This includes state income tax or sales tax (you choose which one), plus property taxes. If you paid state income tax through withholding from your paycheck, that counts toward this potential deduction. Even if your medical expenses aren't enough by themselves to exceed the standard deduction, combining them with SALT deductions might push you over the edge. Check your W-2 box 17 to see how much state tax was withheld, and add any property taxes if you paid them.

One thing to consider - if youre close to making itemizing worth it, donating some stuff to charity before the end of the year could push u over the edge! I was in a similar spot last year and cleaned out my closet, got a receipt from Goodwill for like $350 in donated clothes and that was enough to make itemizing better than standard deduction for me.