Don't forget the depriciation recapture issue if you own your home! If you take the home office deduction using 8829 and then sell your house, you might have to pay back some of those deductions. Doesn't apply to renters tho.

Great thread! I've been wrestling with this same issue for my consulting business. One thing I'd add is to keep really detailed records throughout the year - don't wait until tax time to figure this out. I use a simple spreadsheet to track my home expenses monthly (rent, utilities, insurance, etc.) and calculate what percentage relates to my office space. Also, if you're just starting out and your home office setup isn't perfectly exclusive (like the OP's bedroom situation), you might want to stick with the simplified method for your first year while you figure out a more dedicated space. It's better to take a smaller, defensible deduction than risk an audit over the exclusive use requirement. You can always switch to the actual expense method with Form 8829 in future years once you have a proper setup. The key is consistency - whatever method you choose, use it for the entire tax year and document everything!

Don't forget you'll need to file Form 8606 with your taxes to report the non-deductible Traditional IRA contribution and the conversion! This is super important for tracking your basis and avoiding double taxation. I messed this up the first time I did a backdoor Roth and had a nightmare sorting it out later.

Great question! You're absolutely right that the backdoor Roth can help you get that remaining $2800 into a Roth account. The process is exactly as you described - contribute the $2800 to a Traditional IRA (as a non-deductible contribution since you're over the income limits for deductible contributions), then convert it to Roth. A few key points to keep in mind: 1. **Timing flexibility**: Yes, you can make both your direct Roth contribution ($4200) and your Traditional IRA contribution ($2800) up until the tax filing deadline in April 2026 for the 2025 tax year. The conversion itself can happen anytime and will be reported in the year you actually do it. 2. **Pro-rata rule**: If you have any existing pre-tax money in Traditional, SEP, or SIMPLE IRAs, this will complicate things. The IRS will treat part of your conversion as taxable based on the ratio of pre-tax to after-tax money across all your Traditional IRA accounts. 3. **Documentation**: Make sure to file Form 8606 to properly report the non-deductible Traditional IRA contribution and track your basis. This prevents you from being taxed twice on the same money. The backdoor Roth has become a widely accepted strategy, even though it technically wasn't explicitly designed by Congress. Many people in your situation use this exact approach to maximize their Roth contributions despite the income limits.

Watch out with amended returns and negative AGI situations! I tried to DIY this myself last year and ended up getting a notice from the IRS because I incorrectly tried to carry forward my entire negative AGI (which included FEIE). The IRS ended up disallowing my claimed carryforward and assessing additional tax plus interest. Make sure you're only carrying forward components that actually qualify - like business losses, not just the negative AGI that resulted from exclusions like FEIE.

Just to add another perspective here - I went through something very similar with my 2021 and 2022 returns. Had a negative AGI in 2021 due to a combination of FEIE and some business losses from freelance work that dried up during COVID. The key thing I learned (after initially getting it wrong) is that you really need to break down what specifically created that negative AGI. In my case, about $18k of the negative was from legitimate business losses that could be carried forward as an NOL, but the rest was from the FEIE which doesn't create a carryover opportunity. I ended up having to file Form 1045 to properly calculate the NOL portion and then amended my following year's return to claim it correctly. The business loss carryforward definitely helped offset some of my 2022 income, but it was way less than I initially thought I could carry forward. If you're dealing with multiple components creating the negative AGI like I was, I'd strongly recommend getting professional help or at least double-checking your work before filing the amendments. The IRS doesn't mess around with incorrectly claimed carryforwards.

Based on everyone's experiences here, I want to add one more approach that worked for me just last week. I called the IRS Installment Agreement line at 800-829-0922. I know it sounds completely unrelated, but when the automated system asks if you're calling about a payment plan, select "no" and then choose "speak to a representative about other tax matters." I got through in only 14 minutes on a Friday at 11 AM! The agent explained that this line has lower call volume because most people don't know they can get general tax help there. She was able to answer my questions about foreign income reporting and even helped clarify some Schedule K-1 issues I was having. For @Fatima Al-Farsi's situation with investment properties and foreign income, this might be another good option to try alongside the Identity Protection line that's been working so well for others. The agent I spoke with seemed particularly knowledgeable about complex income scenarios. Also want to echo what others have said about being organized - I had my previous return pulled up on my computer and all my questions written down, which made the call so much more productive. The agent actually complimented me on being prepared and said it's rare that callers come ready with specific questions and documentation. Don't lose hope - there are definitely ways to get through if you try these alternative numbers!

I've been lurking on this thread all week and finally decided to jump in because I just had success using a combination of strategies you all shared! After getting disconnected from the main line four times over two weeks, I tried the Identity Protection line (800-908-4490) that @Chloe Harris and @Liam Sullivan tested. Called yesterday at 2:45 PM and got through in just 16 minutes! The agent was fantastic and spent over 40 minutes walking me through my foreign investment account reporting requirements. What really made the difference was following @Felix Grigori's advice about leading with the international tax aspect. As soon as I mentioned foreign accounts, the agent's whole demeanor changed - she became much more engaged and thorough. She helped me understand not just Form 8938 but also FBAR requirements that I had no idea about. One thing I learned that might help others: if you have foreign investments OR foreign income, mention it immediately when the agent picks up. Don't bury it in the middle of other questions. These agents seem to have specialized training for international issues and will give you much better service. @Fatima Al-Farsi - for your investment property sales combined with foreign income, I'd definitely recommend the Identity Protection line approach. Have your foreign income documentation ready first, then pivot to the domestic property questions once you've established the complexity of your situation. This community has been incredible - thank you all for sharing real strategies that actually work!

Just be really careful about the timing of any HSA withdrawals if you go that route! I learned the hard way that excess contributions need to be withdrawn by the tax filing deadline (including extensions) to avoid the 6% excise tax penalty that applies each year the excess remains in the account. Also, since you mentioned you've already contributed $8,300 for the full year, make sure your payroll department stops any ongoing HSA contributions immediately while you sort this out. You don't want to keep adding to the problem while you're trying to fix it. One more thing - document everything! Keep records of when your wife's FSA started, any communications with HR about potential changes, and if you do need to make HSA withdrawals, keep all the paperwork from your HSA provider. You'll need this documentation for your tax return.

I'm dealing with a very similar situation right now! My spouse and I both work and we accidentally ended up with overlapping HSA and FSA coverage when she changed jobs mid-year. From my research and talking to our benefits administrators, here's what I've learned: the key is acting quickly. The IRS does allow month-by-month eligibility determination for HSAs, so you should be able to keep your contributions for January through June when you were HSA-eligible. A few practical tips based on what I'm going through: 1. Contact your wife's HR immediately - even if they say no initially, explain it's a compliance issue that could result in tax penalties. Some HR departments are more flexible when they understand the tax implications. 2. If you do need to withdraw excess HSA contributions, your HSA administrator should be able to help calculate both the excess amount and any earnings that need to be removed. 3. Keep detailed records of everything - dates when coverage started, contribution amounts by month, and any communications with employers. The limited-purpose FSA conversion really is your best option if possible, since it would let you keep your full HSA contribution and avoid the hassle of calculating prorated amounts. Good luck getting this sorted out!