Just wanted to share my recent experience with this exact situation. We missed an RMD from my wife's inherited IRA in 2023 and discovered it after already filing our return. I was really stressed about the potential $1,800 penalty. We filed the standalone Form 5329 with a reasonable cause letter explaining that we were confused by the new SECURE Act rules and thought we had until age 73 (like regular IRAs) rather than continuing the original owner's RMD schedule. We also mentioned that we immediately took the missed distribution once we realized the error and set up automatic distributions going forward. The IRS completely waived the penalty! The key things that seemed to help were: 1) We took action immediately after discovering the mistake, 2) We showed we put measures in place to prevent it happening again, and 3) We were honest about the confusion without making excuses. The whole process took about 6 months from filing the 5329 to getting the penalty waiver confirmation. Don't lose hope - the IRS really can be reasonable about first-time mistakes if you handle it properly!

I went through this exact same situation last year with my father's inherited IRA. You absolutely can file Form 5329 separately - no need to amend your 1040. Just make sure to check the box indicating it's a standalone filing and include both your husband's name and SSN since it's his inherited IRA. The reasonable cause letter is crucial and "we forgot" can actually work if you frame it right. Focus on how this was your first experience with inherited IRA RMDs, mention any confusion about the rules (especially with all the SECURE Act changes), and emphasize that you're taking immediate corrective action. I included language about setting up automatic distributions going forward to show we were preventing future occurrences. Most importantly, make sure your husband takes that missed $2,500 distribution BEFORE you file the 5329. The IRS is much more likely to waive the penalty when they see you've actually corrected the underlying problem, not just reported it. We ended up getting our full penalty waived using this approach. Good luck!

I went through this exact scenario two weeks ago! SBTPG showed "FUNDED" on a Wednesday afternoon, and I didn't see the deposit until Friday morning. What helped me stay sane was calling my bank's customer service line - they were able to see the incoming ACH transfer in their system even though it wasn't showing in my account yet. The rep told me exactly when it would post (around 5 AM the next business day). Also learned that some banks have different cut-off times for processing ACH transfers, so if SBTPG sent it after 2 PM, it might not process until the next business day. Hang in there - the "FUNDED" status is really reliable, it's just the banking system that moves at snail speed! 🐌

This is such a relief to read! I'm literally in the exact same situation right now - SBTPG has shown "FUNDED" since yesterday morning and I've been checking my account obsessively. The waiting is torture when you're already stressed about money! 😰 What really helps is seeing everyone confirm this is totally normal. I had no idea about the whole ACH transfer process and how banks can hold things for additional processing time. Based on all these responses, it sounds like I should definitely see it by tomorrow or the day after. Going to try calling my bank in the morning to see if they can spot the incoming transfer like some of you mentioned. Thanks Jessica for asking this question - knowing I'm not the only one going through the SBTPG waiting game makes me feel so much better! The "FUNDED" status really seems to be trustworthy, it's just the banking system being slow as usual.

Anyone know if this is different in Quebec? I have a similar situation but with Revenu Quebec and they seem to have different rules for everything...

I went through almost the exact same situation last year with my first bit of freelance income. Here's what I learned from my tax preparer: You absolutely need to report the $520 income on your T2125 - there's no minimum threshold for reporting self-employment earnings. The good news is that with such a small amount, you likely won't owe any income tax on it due to the basic personal exemption. For the expenses without receipts, I'd strongly recommend NOT claiming them. I made the mistake of estimating some expenses my first year and it caused headaches later when CRA requested documentation during a routine review. It's better to miss out on legitimate deductions than risk issues with unsupported claims. One thing that helped me going forward was setting up a simple system: I use a dedicated email folder for all business-related receipts and confirmations, plus I take photos of physical receipts immediately. Even something as basic as a spreadsheet tracking expenses by date and category makes tax time so much easier. Since this is your first time with self-employment income, consider keeping better records even for small gigs - you never know when that side work might grow into something bigger!

I've been through this exact situation myself about 2 years ago - was stuck on emergency tax for nearly 6 months due to a PAYE coding issue. The good news is that yes, you should absolutely see the refund automatically in your next paycheck once your correct tax code is applied. What happens is your employer's payroll system will do a "year to date" reconciliation, comparing what you've actually paid in tax since April 6th against what you should have paid with your correct code. The overpayment gets refunded to you automatically - no forms to fill out or additional steps needed. In my case, I got back just over £2,100 which made that paycheck look absolutely massive! Just be prepared for it to potentially affect your student loan repayments if you have them, since the system will see that one large paycheck amount. One tip: keep all your payslips from the emergency tax period just in case there are any discrepancies. In 99% of cases it works perfectly, but it's always good to have the documentation if you need to query anything with payroll or HMRC later. You should definitely see that refund by end of October - the relief will be incredible after months of those reduced paychecks!

I can confirm that yes, you should see the refund automatically in your next paycheck! I went through this exact situation about 18 months ago when I switched jobs and got stuck on emergency tax for nearly 4 months. It was painful watching so much of my salary disappear each month. Once HMRC sorted my tax code (took forever to get through to them!), my employer's payroll automatically calculated the year-to-date difference and I got back £1,340 in my next pay. The system compares what you've paid since April 6th against what you should have paid with your correct code, then refunds the difference. Just a heads up - that refund paycheck will look enormous compared to what you've been getting, which is both exciting and a bit jarring! Also double-check your payslip when it comes through to make sure the math looks right. In rare cases there can be calculation errors, but usually it's spot on. You've done the hard part getting through to HMRC and getting it sorted. Now you just need to wait for that sweet, sweet refund to hit your account. Should definitely be there by end of October!

Great question, Caden! For proactive learning about retirement account rules, I'd recommend starting with IRS Publication 590-A (Contributions to Individual Retirement Arrangements) and Publication 590-B (Distributions from Individual Retirement Arrangements). These are the official sources and get updated annually. The IRS website also has a pretty good "Retirement Plans" section that breaks down the rules in more digestible chunks. For ongoing updates, I follow a few tax professionals on social media who regularly post about rule changes - they often catch nuances that the general financial press misses. One thing I've learned is that retirement account rules are complex enough that it's worth building a relationship with a fee-only financial advisor or tax professional before you need them. Having someone you can call with questions before making major moves (like Dylan's situation) can save thousands in the long run. Also, whenever you're dealing with multiple accounts or unusual circumstances, always get a second opinion. Even financial professionals sometimes miss these edge cases - the one-rollover rule is a perfect example of something that trips up both advisors and account holders regularly. Dylan's experience is actually a valuable reminder that even well-intentioned moves can have unintended consequences when retirement account rules are involved!

Dylan, what a costly lesson! I went through something similar a few years back, though thankfully on a smaller scale. The one-rollover rule is genuinely one of the most misunderstood aspects of IRA management. One thing I learned from my tax professional that might help you moving forward - make sure you're crystal clear about which specific distribution you're treating as the qualifying 60-day rollover when you file. The IRS wants to see documentation that clearly identifies which transaction gets the rollover treatment versus which ones are being reported as taxable distributions. Also, don't beat yourself up too much about this. I've seen posts on various financial forums where even CPAs have made similar mistakes with client accounts. The interaction between multiple IRA accounts and the rollover rules is genuinely confusing, and the consequences are harsh relative to how easy the mistake is to make. Going forward, you might want to consider consolidating your IRAs at one custodian to simplify future management and reduce the chance of similar issues. Just make sure any future consolidation moves are done as direct trustee-to-trustee transfers rather than distributions to avoid rollover limitations entirely. Hope you can minimize the damage and that sharing your experience helps others avoid the same trap!