Looking at your numbers, I think I see what might be happening here. You mentioned that your total cost basis is $758,175 for three rental properties, but when FreeTaxUSA calculated $6,070 in prior year depreciation, it sounds like it might only be calculating for one property or treating them differently than TurboTax did. Here's what I'd recommend checking: 1. **Verify you entered all three properties separately** in FreeTaxUSA. Each property should have its own depreciation schedule, not combined into one entry. 2. **Check your 2021 Form 4562 carefully** - look at Part III (MACRS Depreciation) to see if the $21,239 includes any bonus depreciation or Section 179 expensing that you might have overlooked. 3. **Review the property classifications** - make sure FreeTaxUSA has them classified the same way as your 2021 return (residential vs. commercial affects the depreciation period significantly). The math suggests there's definitely something different about how the depreciation is being calculated between the two software programs. If you're still unsure after checking these items, I'd strongly recommend pulling up your actual 2021 Form 4562 and comparing it line-by-line with what FreeTaxUSA is generating to identify exactly where the discrepancy occurs. Don't panic - this is fixable once you identify the root cause!

I've been through this exact situation! The key issue is likely that you need to match the exact depreciation method and asset breakdown from your 2021 return. Here's what I'd suggest doing step-by-step: 1. **Pull out your 2021 Form 4562** and look at Part III (MACRS Depreciation). This will show you exactly how TurboTax broke down your depreciation. 2. **Check if TurboTax separated components** - Many tax software programs will automatically separate things like appliances, carpeting, blinds, and other personal property from the building structure. These get depreciated over 5-7 years instead of 27.5 years, which can create much higher first-year depreciation. 3. **Look for bonus depreciation** - If you elected bonus depreciation on any components in 2021, that could easily explain the $15,000+ difference you're seeing. 4. **Verify the property count** - Make sure you're entering all three properties as separate assets in FreeTaxUSA, not combining them. The $6,070 FreeTaxUSA calculated sounds like it's only doing basic building depreciation for one property. If your 2021 return shows $21,239, there's definitely additional depreciation components or methods that aren't being replicated. Don't stress - this is a common issue when switching tax software. The important thing is maintaining consistency with your prior year filings. Once you identify what TurboTax did differently, you can replicate it in FreeTaxUSA.

One thing to consider that hasn't been mentioned much is the depreciation savings. If you're currently driving your 2021 Honda Civic for personal use, you're putting wear and tear on your own asset. With a company car, all that depreciation hits their books instead of yours. I'd also ask your employer about their policy for different types of personal use. Some companies are more restrictive about things like out-of-state trips or using the car for ride-sharing/delivery services. And definitely find out if they have any mileage tracking requirements - some employers want detailed logs of business vs personal use, which can be a hassle. The maintenance aspect is huge too. If the company covers oil changes, tire replacements, repairs, etc., that's real money saved even after the tax hit. I'd estimate what you typically spend annually on your Honda's maintenance and factor that into your decision.

Great question about company car policies! Travel restrictions vary widely by employer. Some companies have no geographic limits as long as you're using it for approved personal use, while others restrict travel to certain states or within a specific radius from your home base. The key things to ask HR about: 1) Geographic restrictions (if any), 2) Whether you need pre-approval for long trips, 3) Who's responsible if something happens out of state, and 4) Whether their insurance coverage changes based on location. Most companies I've seen allow road trips as long as you're not using the car for business purposes like Uber or moving services. But definitely get this in writing - the last thing you want is to be stranded somewhere because you violated a policy you didn't know about. Also worth noting that longer trips will increase your personal use percentage, which affects your taxable benefit calculation. So factor that into your overall cost analysis when deciding if the company car makes financial sense for your situation.

Just wanted to share my experience with this exact situation! I had multiple Roth IRA contributions throughout 2023 and then got hit with a surprise year-end bonus that pushed me over the income limit. The key thing I learned is that you absolutely need to act quickly - the deadline is firm. My broker (Schwab) was actually really helpful once I got to the right department. They have a specialized team that handles excess contribution returns and they did all the earnings calculations for me using the method described above. One thing that wasn't immediately clear to me: when you withdraw the excess contribution plus earnings, the contribution amount comes back to you tax-free (since it was post-tax money), but the earnings portion gets added to your taxable income for the year you receive the distribution. So make sure you're prepared for that tax hit! Also, if you're close to income limits in the future, definitely consider the backdoor Roth strategy mentioned by others. It's a bit more paperwork but saves you from this whole headache.

I went through this same situation last year with Fidelity! You're absolutely right that the calculation can be confusing, especially with multiple contributions. Here's what I learned from my experience: Fidelity does have a specific form called "Return of Excess Contribution" that you can find in their forms library online. When you call, ask specifically for the "retirement account excess contribution department" - they'll transfer you to specialists who handle this all the time and actually know the calculation methods. Regarding your question about tracking each contribution separately - you don't need to! The IRS allows you to use the account value immediately before your first contribution for the tax year as your starting point, then your current balance as the ending point. The formula you mentioned is correct. One important thing I discovered: if you're doing this for 2024 contributions, you have until your 2024 tax filing deadline (including extensions) to fix it without penalty. But don't wait - the earnings calculation keeps changing as your account value fluctuates. Also, just to echo what others said about the tax implications - the contribution itself comes back tax-free, but any earnings on the excess contribution will be taxable income in the year you receive the distribution. Fidelity will send you a 1099-R showing the earnings portion.

Has anyone used the IRS worksheet for calculating taxable amounts of IRA distributions? I'm looking at Publication 590-B but its kinda confusing me with all the different worksheets.

Great question! This is definitely one of those situations that can trip up new preparers. When box 2a is blank, you're essentially doing detective work to figure out the taxable portion. For your code 7 distribution ($42,350 or $89,700 - not sure which is which), this is a normal distribution. It's fully taxable UNLESS your client made after-tax (non-deductible) contributions to the plan. You'll need to ask if they ever filed Form 8606 in previous years or made contributions that weren't deducted on their tax return. For the code 3 distribution, that's typically for disability payments. These are usually fully taxable, but you should verify the nature of the disability and how the plan was funded. The rollover mention is crucial - if your client rolled over one of these distributions to another qualified account within 60 days, that portion wouldn't be taxable. You'll need documentation of the rollover (like a statement from the receiving institution). My advice: Get a detailed conversation with your client about their contribution history, any rollovers completed, and copies of previous years' returns if they have them. Also check if there are any boxes checked for "Taxable amount not determined" or "Total distribution" on the 1099-Rs - these give you additional clues about how to handle the calculations.

Pro tip: Skip TurboTax entirely and use FreeTaxUSA. Federal filing is actually free for almost all tax situations (not just the super basic ones), and state filing is only $15. I've been using it for 5 years after TurboTax tried to charge me $120 halfway through my "free" filing. TurboTax, H&R Block, and TaxAct all pull the same bait and switch tactics. They spend millions on advertising their "free" versions knowing full well most people won't qualify once they're deep into the process.

I filed with TurboTax for 7 years and got hit with these "surprise" fees every single time. This year I switched to Cash App Taxes (used to be Credit Karma Tax) and filed completely free - federal AND state, with investment income and everything. took me like 45 minutes total.