I've been dealing with this exact issue and found that the key is understanding that IRS requirements vary based on what specific action you're taking. For document collection from clients, text authentication combined with encryption can be sufficient under Publication 4557's "reasonable safeguards" standard. However, if you're using the platform to verify taxpayer identity for e-filing purposes, that falls under the more stringent Publication 1345 requirements. What helped me was creating a compliance matrix that maps different activities (document collection, identity verification, e-filing authorization) to their specific IRS requirements. This way I know exactly which authentication method to use for each situation. I'd recommend documenting your processes clearly so you can demonstrate compliance if ever questioned. The bottom line is that Encyro's text authentication might be compliant for some uses but not others - it depends on your specific workflow and client interaction model.

I've been following this discussion with great interest as I'm in a similar situation with my tax practice. What's becoming clear to me is that there's a significant gap between what document sharing platforms claim about compliance and what the actual IRS requirements specify. From my research into Publication 4557 and 1345, it seems like the real issue isn't whether text authentication is "good enough" - it's about having a documented security framework that addresses the specific risks in your practice. I've started requiring platforms to provide detailed compliance documentation that maps their security features to specific IRS publication requirements. One thing that's helped me is reaching out to other tax professionals in my local NATP chapter to see what they're using and how they're documenting their compliance decisions. It's reassuring to know I'm not the only one struggling to navigate these requirements, and the collective knowledge has been invaluable for making informed decisions about which platforms truly meet our professional obligations.

Just wanted to add some clarification on the MAGI calculation since I see some confusion in the comments. You're absolutely right that traditional IRA contributions don't reduce MAGI for determining deductibility - that would indeed be circular. However, it's worth noting that if you WERE eligible for the deduction (i.e., if your income was lower), THEN the traditional IRA contribution would reduce your MAGI for other tax purposes like determining eligibility for other credits or benefits. In your case at $93k post-401k, you're unfortunately well above the threshold. But here's a potential strategy: if you can increase your 401k contribution by even more (up to the $23,000 limit for 2025), that could potentially get your MAGI low enough to qualify for at least a partial traditional IRA deduction. For example, if you could contribute an additional $7k+ to your 401k, that would bring your MAGI down to around $86k or below, potentially making you eligible for the traditional IRA deduction. Of course, this only works if you have the cash flow to support the higher 401k contributions.

Great discussion here! Just to add one more perspective - I was in almost the exact same situation last year. Making around $105k, maxing out my 401k, and thinking I could squeeze out a traditional IRA deduction. What I learned the hard way is that once you're covered by a workplace plan, those income limits are pretty strict. At $93k MAGI after your 401k contributions, you're definitely above the $86k cutoff for any deduction. I ended up going the backdoor Roth route that several people mentioned. The process was actually simpler than I expected - contributed $6k to a traditional IRA (non-deductible), then immediately converted it to Roth. No taxes on the conversion since there were no earnings, and now that money grows tax-free. One thing to watch out for - make sure you don't have any other traditional IRA balances with pre-tax money, or you'll run into the pro-rata rule complications. If you do, consider rolling those into your current employer's 401k first if they allow it. The backdoor Roth has been a game changer for getting more money into tax-advantaged accounts at our income level. Definitely worth exploring!

I'm dealing with this exact same problem right now after switching jobs in September! The timing couldn't be worse - I've already maxed out my Social Security contributions at my previous employer, but my new company's payroll system has no visibility into that. After reading through all these suggestions, I think the most practical approach is definitely the W-4 adjustment strategy that several people mentioned. I calculated that I'll be overwithholding about $2,800 in OASDI taxes between now and year-end, so I'm planning to adjust my federal income tax withholding to reduce it by roughly that amount. At least that way I'm not giving the government a completely interest-free loan while waiting for tax season. One thing I wanted to add that I haven't seen mentioned - if you're using direct deposit, consider having the amount you expect to get back automatically transferred to a high-yield savings account each pay period. That way you're at least earning some interest on money that's rightfully yours while waiting for the tax system to catch up. Has anyone had success getting their employer to make mid-year adjustments to base salary to compensate for this? I know it's a long shot, but for companies that really want to retain talent, it seems like the kind of thing they might consider, especially since they're overpaying their matching portion too.

I'm going through this exact same frustrating situation right now! I switched jobs in late August and I'm already seeing the OASDI overwithholding hit my paychecks. It's maddening that there's no mechanism for employers to communicate about this stuff. After reading through all these responses, I'm definitely going to try the W-4 adjustment strategy to reduce my federal income tax withholding. I've calculated that I'll be overwithholding about $2,100 in Social Security taxes by year-end, so reducing my federal withholding by a similar amount should help with the cash flow impact. One thing I'm curious about - has anyone tried submitting documentation to their payroll department showing they've already hit the OASDI limit at a previous employer? I know legally they still have to withhold, but I wonder if some companies might be willing to work with you on timing (like maybe processing your bonus payments in January instead of December to minimize the overwithholding period). Also, for anyone tracking this stuff, I'd recommend setting up a simple spreadsheet with your pay dates, gross pay amounts, and OASDI withholdings from both employers. It makes it much easier to see exactly when you hit the limit and calculate your expected refund. Plus you'll have all the documentation organized when tax season rolls around. The system definitely needs to be modernized to handle job changes better, but at least knowing there are some workarounds helps reduce the stress!

I've been following this thread with great interest since I'm dealing with a similar LLC sale situation. Based on what you've shared about it being an LLC taxed as partnership selling to a C-Corp, your accountant might be correct about the different tax treatment. The key issue is that when a partnership interest holder receives stock from a C-Corp buyer, it often doesn't qualify for the same favorable treatment as a straight asset sale. The stock portion might be viewed as a taxable exchange rather than a sale, which could result in ordinary income treatment depending on how it's structured. However, there are still ways to potentially optimize this. Look into whether the transaction can be structured as an installment sale for the stock portion, which might help spread the tax impact over time. Also, make sure your Section 1060 allocation clearly separates goodwill from any other intangible assets - sometimes what gets lumped together as "goodwill" actually includes other items that have different tax treatment. Have you considered getting a second opinion from a tax attorney who specializes in business transactions? The tax implications are significant enough that it might be worth the additional professional fees to explore all options before finalizing.

The LLC partnership structure definitely complicates things compared to a corporate sale. When you're selling partnership interests to a C-Corp buyer, the stock portion often can't benefit from the same favorable tax treatment as a straight asset sale. For installment sale treatment on the stock portion, you'd typically need the buyer to agree to certain payment terms or restrictions on the stock transfer. This isn't something you can just elect on your tax return - it has to be structured properly in the purchase agreement itself. Regarding Section 1060 allocation, you absolutely should separate different intangible assets. Customer relationships, non-compete agreements, trade names, and goodwill are all different asset classes with potentially different tax treatment. What many people lump together as "goodwill" often includes customer lists (Class VI) or covenant not to compete (ordinary income). True goodwill is the going concern value and reputation of the business that can't be attributed to any other specific asset. Getting this allocation right can make a significant difference in your tax outcome. I'd strongly recommend having a business appraiser help document the allocation if the amounts are substantial. Given the complexity of your LLC-to-C-Corp transaction, a second opinion from a tax attorney specializing in business sales might be worth the investment before you finalize everything.

I've had 3 partnerships with negative basis issues. Your basis includes your share of partnership liabilities, so check if: 1) Your share of liabilities decreased significantly 2) You took distributions when profits were minimal 3) The partnership claimed large depreciation deductions

This is exactly why partnership taxation can be so tricky for investors who aren't familiar with the rules. Your situation is unfortunately quite common, especially in real estate partnerships or businesses that distribute cash from refinancing. The key thing to understand is that your $160,000 capital account and your tax basis are completely different numbers. Your capital account shows your economic rights in the partnership, but your tax basis determines the tax consequences when you exit. If you received distributions over the years (especially from that refinancing you mentioned), those distributions reduced your tax basis even if the partnership was showing losses on paper. Once your basis hit zero, any additional distributions created negative basis. When you sell your partnership interest with negative basis, that negative amount becomes taxable gain - even though economically you're walking away with less than you invested. It's essentially the IRS collecting tax on those prior distributions that exceeded your basis. The good news is that if you can reconstruct your basis properly, you might find some adjustments that could reduce the gain. Make sure your CPA has accounted for all debt allocations, any Section 754 elections, and properly applied loss limitations from prior years.