Has anyone tried reporting this to FINRA? IRA custodians are typically regulated and might be more responsive if you file a complaint about the incorrect tax form. Just something to consider before tax day.

This is exactly the kind of frustrating situation that highlights how broken the system can be when custodians make errors and refuse to fix them. You're absolutely right that code 8 should only apply to the $55 excess contribution return, not the entire distribution amount. Since the custodian is refusing to cooperate, I'd recommend a multi-pronged approach: First, document everything - keep records of all your communications with them refusing to correct the form. Then report the 1099-R exactly as issued in your tax software, but make the necessary adjustments with a detailed explanation statement attached to your return. The contradiction between code 8 and the IRA/SEP/SIMPLE box being checked is a clear error on their part. Most tax software will let you override this with an explanation. Make sure to calculate the tax treatment correctly for each portion - the $55 excess contribution versus the regular distribution. If you want to put additional pressure on the custodian, consider filing a complaint with their regulator (FINRA if they're a broker-dealer, or the appropriate banking regulator if they're a bank). Sometimes external pressure makes them more willing to issue corrected forms.

As someone who used to do taxes professionally, I'd recommend comparing the actual forms that each software generates rather than just looking at the final numbers. You can usually preview your return before filing. Check these specific things: 1. Is your income categorized correctly on both (W-2 vs 1099)? 2. Are self-employment expenses being deducted properly? 3. Is the standard deduction being applied correctly? 4. Is self-employment tax being calculated only on 1099 income?

This is such a frustrating situation! I went through something similar two years ago and it turned out that the free versions of different tax software have varying levels of sophistication in handling mixed income sources. One thing that really helped me was creating a simple spreadsheet to track exactly what each software was doing with my numbers. I listed out all my income sources (W-2, each 1099, etc.) and then went through both programs to see how they were categorizing and calculating taxes on each piece. In my case, I discovered that one program was double-counting some of my expenses while the other wasn't counting legitimate business deductions at all. The difference in my final tax liability was over $900! My advice would be to not file either return until you're confident about which one is correct. The penalties for filing incorrectly can be steep, and it's worth taking the extra time to get it right. You might also want to consider upgrading to a paid version of one of the software programs - sometimes the additional features are worth the cost when you have multiple income sources like restaurant work plus gig economy income.

Something nobody's mentioned yet - if you have self-employment income (even from a side gig), you could open a Solo 401k and roll your pre-tax IRA money into that. Then you'd be able to do clean backdoor Roth conversions with your post-tax IRA contributions. I did this last year when I was consulting on the side, and it worked perfectly. The Solo 401k can often have better investment options than an employer 401k too, since you get to choose the provider. I went with Fidelity and have access to all their low-cost index funds with no admin fees.

Great breakdown of your situation! You're absolutely right about the pro-rata rule making backdoor Roth conversions less attractive with your current mix. A few additional thoughts: Since you're 42 with 20 years until retirement, you might consider doing small annual Roth conversions during years when your income is lower (job changes, sabbaticals, etc.). Even though you'd pay tax on 85% of each conversion, spreading it over multiple years could keep you in lower tax brackets. Another angle to consider: if you expect to be in a lower tax bracket in retirement, keeping the Traditional IRA as-is might actually be optimal. You'd continue tracking basis with Form 8606, and your future withdrawals would be partially tax-free based on the pro-rata rule you mentioned. For the earnings question - no, earnings on your post-tax contributions are not tax-free when withdrawn. Only your actual post-tax contribution amounts (your basis) come out tax-free. The IRS treats all earnings as taxable regardless of which contributions generated them. The 401k rollover strategy others mentioned is solid if your plan allows it, but make sure to factor in any differences in investment options and fees when deciding if it's worth it.

Just a tip: no matter which service you use, ALWAYS look at the actual tax forms they generate (Form 1040 and schedules) to see where the differences are. Comparison shop between services but understand WHY they're different. Most discrepancies come from credits like Education, Earned Income, Child Tax, or deductions like student loan interest. Tax software relies on answering interview questions correctly, and each one phrases questions differently which can lead to different answers.

I've seen this exact scenario play out so many times! The $860 difference you're experiencing is actually pretty typical when there are education credits involved. Jackson Hewitt tends to be more thorough with their education credit questions compared to TurboTax and H&R Block. Here's what likely happened: TurboTax and H&R Block probably asked about your education expenses, but their question flow might have led you to accidentally disqualify yourself. For example, they might have asked if you were enrolled "at least half-time" and if you answered incorrectly, it could have knocked out the entire credit even if you were eligible. Since the IRS has already accepted your return, you should be fine. "Acceptance" means the basic info matched their records. Just keep your 1098-T form and any tuition receipts as backup documentation. The American Opportunity Credit can be worth up to $2,500, so a difference of $860 between owing $650 and getting a $210 refund makes perfect mathematical sense. One thing to watch for next year: try to be extra careful with the education questions on whichever service you use. Those credits are worth thousands but easy to miss if you're not careful with the interview process!

Has anyone experienced a situation where their refund was split between different accounts? I'm wondering if perhaps your refund was partially directed to another account, similar to what happened with my spouse's return last year. The IRS accidentally split our refund based on some form we didn't even realize we had filled out.

I'm also waiting on my 2/26 DDD with Venmo and haven't received anything yet. From what I've researched, Venmo typically processes ACH deposits within 1-3 business days of the official deposit date, so we should see something by early next week if everything is on track. One thing I learned is that Venmo doesn't process deposits on weekends, so even though 2/26 was the DDD, the actual processing likely started on Monday 3/3. I'd give it until Wednesday 3/5 before getting worried. In the meantime, you might want to double-check that your routing and account numbers were entered correctly on your return - even a small typo can cause the deposit to bounce back to the IRS, which would delay everything significantly.