Quick question for anyone who's dealt with this - how long did the correction process take with the SSA? I have a similar issue but I'm worried about delaying my refund too long if I wait for the correction.

This exact same thing happened to me two years ago! The frustrating part is that everything looks correct on your end, but there's some tiny discrepancy in the SSA database that you can't see until you dig deeper. One tip that might save others some time - before calling SSA, try logging into your my Social Security account online first (if you can get past the ID.me nightmare). Your Social Security Statement will show exactly what birthdate they have on file. That way when you do call, you can immediately tell the rep "I see you have [wrong date] but it should be [correct date]" instead of going through the whole discovery process. Also, for anyone facing this close to the filing deadline - don't panic about using the "wrong" birthdate temporarily just to get your return accepted. The IRS doesn't care if your birthdate is factually wrong, they just care that it matches what SSA has. You can always fix the underlying SSA record later and your taxes will be fine. The whole system is frustrating but you're definitely not alone in dealing with this!

Just a quick note - watch out for guaranteed payments vs special allocations. If you're paying one partner more because they're doing more work, that should typically be structured as a guaranteed payment (reported on line 4 of their K-1), not as a special allocation. Special allocations are more appropriate when you're dividing the overall profit pie differently, not compensating someone for services. Getting this wrong can mess up both the partnership's and individual partners' tax situations.

One thing I haven't seen mentioned yet is the importance of maintaining consistent capital account adjustments throughout the year when you have special allocations. The IRS pays close attention to whether your capital accounts properly reflect the economic arrangements. For your situation with the 37.5-32.5-30 profit split, make sure your capital accounts are adjusted by these same percentages when you book the income. If you're using the "economic effect" safe harbor under Reg. 1.704-1(b)(2)(ii)(b), your capital accounts must increase and decrease in accordance with the allocations. Also, consider how this special allocation affects future years. If this is a one-time arrangement, document that clearly. If it might continue, think about whether you want to amend your operating agreement permanently or handle it year-by-year. The documentation requirements are different for each approach. One last tip: keep detailed records of the business justification for the special allocation. "Member C brought in major clients" is good, but specific dollar amounts of revenue generated, dates, and how this impacted the partnership's profitability will strengthen your position if questioned.

22 Has anyone used Form 5329 to report and pay the 6% excise tax on excess contributions? I'm wondering if it's better to just pay the penalty for a year rather than going through the hassle of removal if the amount is relatively small.

I went through almost this exact situation two years ago! For the 2022 contribution, you're unfortunately stuck with the return of excess contributions route since the recharacterization deadline has passed. The 6% excise tax will apply for each year it stayed in there, but getting it out now prevents future penalties. For 2023, if you're still within the deadline (including extensions), definitely go with the recharacterization to Traditional IRA followed by the backdoor Roth conversion. Just make sure you understand the pro-rata rule implications if you have other traditional IRA balances. One tip that helped me - when dealing with your custodian, be very specific about what you're requesting. Say "I need to remove excess contributions and earnings for tax year 2022" rather than just asking about "fixing" contributions. The customer service reps are usually better equipped to help when you use the exact terminology. Also, don't be afraid to ask for a supervisor if the first person you talk to seems unsure about the process.

I work as a tax preparer and see this fairly often. The good news is that "Error Department" doesn't mean you made a mistake - it's just their internal processing queue for returns that need human review. With the Child Tax Credit claim you mentioned, they're probably just verifying your kids' information against their records. A few tips while you wait: - Keep checking "Where's My Refund" tool weekly - Don't file an amended return unless they specifically ask for one - If you get a CP05 notice, that's normal - it just confirms your return is under review The wait is frustrating, but most returns in ERD do eventually process without any action needed from you. Hang in there!

I had my return sent to the Error Department two years ago and it was nerve-wracking! In my case, it was because I had moved during the tax year and there was a mismatch between the address on my return and what they had on file from my previous year's return. The waiting is definitely the hardest part. What helped me was setting up alerts on the IRS app so I'd get notified of any status changes instead of obsessively checking every day. Also, make sure your phone number and address are current with the IRS in case they need to reach you. Since you mentioned needing the refund for car repairs, you might want to look into other temporary funding options while you wait. Some auto repair shops offer payment plans, or you could check if your bank offers a small personal loan if the repairs are urgent. The refund will come eventually, but having a backup plan might give you some peace of mind in the meantime.

Don't forget that if you're due a refund from any of the years you didn't file, you only have 3 years from the original due date to claim it. After that, the money is gone forever. But if you OWE money, there's no time limit for the IRS to collect! Not fair but that's how it works.

I went through this exact same situation about two years ago - four years of unfiled returns with gig work income mixed in. The anxiety was eating me alive until I finally bit the bullet and dealt with it. Here's what I learned: The IRS actually wants to work with you more than you think. I ended up qualifying for First Time Penalty Abatement which wiped out a huge chunk of the penalties. The key is being proactive about fixing it rather than continuing to avoid it. For your income level and situation, you'll likely owe some back taxes but it won't be catastrophic. The failure-to-file penalties are the killer (5% per month up to 25%), but once you get those abated, you're mostly looking at the actual tax owed plus interest. My biggest regret was waiting so long to address it. Every month you wait, more interest accrues. I'd definitely recommend getting professional help - an Enrolled Agent was worth every penny for me. They knew exactly which forms to file and how to minimize the damage. You've got this! It's scary but totally manageable once you start the process.