Has anyone successfully gotten the penalty waived by filing Form 5329 with the "reasonable cause" explanation? I'm in a similar situation (inherited in 2019, didn't take RMDs for 2021-2023) and wondering if it actually works or if the IRS just denies these requests.

I'm dealing with a very similar situation right now! Inherited my grandmother's IRA in 2021 and just discovered I've been missing RMDs. Reading through everyone's experiences here has been incredibly helpful. One thing I wanted to add - when I called my IRA custodian (Fidelity), they were actually pretty helpful in calculating what my missed RMDs should have been for each year. They have worksheets and can walk you through the calculations based on your account balance and the IRS life expectancy tables. Also, something to keep in mind - if you're taking multiple years of RMDs all at once in 2024, you might want to consider spreading the withdrawals across a few months rather than taking it all in one lump sum. It won't change the tax implications, but it might help with managing the cash flow and any potential investment timing issues. The penalty waiver route seems to be working for people, especially given all the confusion around the SECURE Act changes. I'm planning to file Form 5329 for each missed year once I take my distributions.

I'm in exactly the same situation! Filed on 01/28 and my federal refund was deposited within two weeks, but my NJ state return has been stuck on "processing" for over a month now. As someone who's also relatively new to the US tax system (been here about 4 years), this whole federal vs state processing speed difference is completely baffling to me. In my home country, all tax matters were handled by one central agency, so this fragmented system where each state operates independently is still confusing. The NJ Division of Taxation website is absolutely useless - it's like they designed it to tell you as little as possible. I've been refreshing that page daily hoping for some miracle update, but it's been the same generic "processing" status for weeks. It's especially frustrating when you're counting on that refund for expenses and you have no idea if it'll come next week or next month. At least knowing others are experiencing the same delays makes me feel less like I did something wrong with my filing!

I'm dealing with the exact same issue! Filed my NJ return on 01/30 and got my federal refund in about 10 days, but my state return is still stuck in processing purgatory. As someone who's been in the US for about 2 years, I'm still wrapping my head around how the federal government can be so efficient while individual states seem to be operating with systems from the dark ages. What's really frustrating is that there's no way to get any meaningful information - the NJ website just says "processing" like it's some kind of magical incantation that's supposed to make us feel better. I've been checking religiously every day hoping for some sign of life, but it's like watching grass grow in winter. The financial stress of not knowing when (or if) that refund is coming is real, especially when you're still getting established in a new country. At least seeing all these comments makes me realize it's not something I did wrong - it's just NJ being NJ!

I've been following this thread as someone who just passed all three parts of the EA exam, and I wanted to add my perspective on study materials since there's been such great discussion here. The consensus about needing actual textbooks is absolutely correct - practice questions alone will not teach you the material. I made that mistake initially too and wasted months spinning my wheels. Here's my take on the resources mentioned: **Gleim** - Excellent comprehensive coverage, worth every penny. Their explanations are detailed and they structure the material logically. If you can only afford one premium resource, make it this. **Passkey** - Great alternative to Gleim, especially if you like more practical examples. Their Individual Tax textbook is particularly strong. **IRS Publications** - Essential but use them as reference, not primary learning materials. They're authoritative but not written for learning from scratch. One resource I haven't seen mentioned is **Becker EA Review** - their textbooks are really well-organized and they explain complex concepts clearly. Might be worth looking into as an alternative to Gleim if cost is a factor. The key insight that transformed my studying: treat the EA exam like you're learning to be a tax professional, not just passing a test. When you approach it that way, you naturally want to understand the underlying concepts rather than memorize answers. You're absolutely on the right track wanting to understand the tax code properly. That's exactly the mindset that will make you a successful EA!

As someone who struggled with the exact same issue as you, I can tell you that you're definitely not alone in feeling frustrated with the practice-question-only approach. I made the same mistake with a different provider and felt like I was just memorizing random answers without any real understanding. What finally clicked for me was realizing that the EA exam tests your ability to apply tax principles to various situations, which means you need to understand the underlying concepts first. Here's what worked for me: **Study Materials I recommend:** - **Gleim EA Review** - Yes, it's expensive, but their textbooks actually teach you WHY tax rules exist, not just what they are - **IRS Publication 17** - Use this as your reference guide alongside any textbook - **Publication 334** for business taxation concepts **My game-changing study approach:** 1. Read one chapter completely in your textbook before touching any practice questions 2. Take notes and create your own examples to make sure you understand 3. Reference the relevant IRS publications to see the official language 4. THEN do practice questions on that topic 5. When you get something wrong, go back to the textbook to understand why The breakthrough moment for me was when I stopped trying to memorize answers and started asking myself "What tax principle is this question testing?" Once I understood the principles, the specific applications became much clearer. Don't give up - wanting to actually understand the material rather than just pass the test is exactly the right mindset. You're going to be a great EA because you care about doing it right!

You might consider implementing a quarterly dividend strategy alongside a reasonable base salary. This is what I do - I pay myself a consistent reasonable base that covers my actual work (based on market rates for my position), then distribute profits as needed through distributions. Remember that while S-Corp distributions aren't subject to self-employment tax, they ARE subject to income tax. And the IRS is very clear that you can't take distributions without a reasonable salary first.

The uncertainty you're facing is totally understandable - that's a massive potential revenue jump! Here's what I'd recommend based on going through something similar: Start with a conservative approach for Q1. Set your salary based on a blend of last year's performance plus modest growth expectations - maybe bump from $65k to around $75-80k to start. This keeps your fixed commitment manageable while acknowledging some growth. Then implement quarterly reviews. As you hit Q2 and Q3, if the revenue is materializing as projected, you can either: 1. Increase your base salary mid-year (requires payroll adjustments) 2. Pay yourself W-2 bonuses quarterly to catch up 3. Take the excess as distributions (though remember you need that reasonable salary first) The IRS doesn't expect you to predict the future perfectly, but they do expect you to make reasonable adjustments as circumstances change. Document everything - why you set the initial salary, what factors you considered for increases, and how you determined what's "reasonable" for your role and industry. Most importantly, focus on what you'd need to pay someone else to do your job, not on percentages of profit. Your duties might not change much even if revenue quadruples, so your salary shouldn't necessarily scale directly with profits.

Slighy off-topic but don't forget capital gains reporting for your crypto! Even if T1135 doesn't apply, you still need to track every single transaction for calculating capital gains/losses. CRA expects you to report: - Fair market value of crypto at time of purchase - Fair market value when sold/traded - Calculate gain/loss on each transaction - Apply 50% inclusion rate for capital gains I use Koinly to track all this stuff and it saves me tons of headaches at tax time.

Great question and excellent discussion here! I just want to reinforce what others have said about the T1135 requirements for crypto. The key distinction is WHERE your crypto is held, not what type of asset it is. Since your hardware wallet is physically located in Canada (in your home safe), the Bitcoin stored on it is considered Canadian property for tax purposes, regardless of the fact that Bitcoin itself is decentralized and not tied to any specific country. The $250K+ threshold for T1135 only applies to "specified foreign property" - and crypto on a hardware wallet in Canada doesn't qualify as foreign property. You're absolutely right to be cautious about CRA compliance, but in your situation, T1135 filing isn't required. However, do keep detailed records of your transactions and holdings as others have mentioned. The crypto tax landscape is still evolving, and good documentation will protect you if rules change or if you're ever audited. Also remember that while T1135 may not apply, you'll still need to report any capital gains when you eventually sell or trade your Bitcoin. Stay compliant and keep that hardware wallet secure!