Looking at all these codes is like trying to read The Matrix tbh

Honestly dealing with IRS codes feels like learning a whole new language. I've been trying to figure out what's going on with my transcript for weeks and it's so confusing. At least now I know there's an updated resource to check out - thanks for sharing this!

Just want to add that I had the exact same issue two years ago with my son's last name (typed "Johnsn" instead of "Johnson"). My return was accepted and processed without any issues or delays. As long as the SSN is correct and the first four letters match, you should be fine. The IRS systems are designed to handle minor typos like this. I never had to file an amendment or anything.

I completely understand your stress about this! I went through something very similar last year when I accidentally typed my daughter's middle initial as "M" instead of "N" on our return. I was convinced it would cause major problems. After doing a lot of research and eventually speaking with a tax professional, I learned that the IRS's matching system is actually quite forgiving for these types of minor errors. Since "Davus" and "Davis" both start with "Davi," you should be in the clear. The fact that your return was already accepted is a really good sign - that initial acceptance includes the name matching process. I never had to file an amendment for my error, and our refund came through on schedule. The IRS deals with thousands of these minor typos every tax season, so their systems are built to handle them. Try not to stress too much about it - based on everything I've learned and experienced, you're very likely going to be just fine!

Thanks for all the helpful info everyone! Just to clarify my understanding - so I can withdraw up to $10,000 TOTAL across both my Roth and traditional IRAs using the first-time homebuyer exemption, not $10k from each account. And with my Roth IRA, I can also take out all my contributions penalty-free anytime regardless of the exemption, which gives me more flexibility. One follow-up question - does the order matter? Like should I exhaust my Roth contributions first before using the $10k exemption on earnings? Or would it be smarter to use the exemption on my traditional IRA since those withdrawals would be taxable anyway? I'm trying to minimize my overall tax burden while maximizing what I can access for the down payment.

Just wanted to add a practical tip from my recent home buying experience - if you're planning to use IRA funds for your down payment, make sure to coordinate the timing with your lender and closing date. I made the mistake of withdrawing the money too early and had to keep it in a savings account for 6 weeks, which actually complicated my mortgage application because lenders want to see "seasoned" funds. The 120-day rule gives you flexibility, but ideally you want to time the withdrawal so the funds hit your account close to when you'll need them for closing. Also keep detailed records of the withdrawal and home purchase - I saved copies of my IRA distribution form, the closing disclosure, and purchase contract just in case the IRS ever asks for documentation of the first-time homebuyer exemption. Good luck with your home purchase! The market is definitely challenging right now, but every bit of penalty-free access to your retirement funds helps with that down payment.

This is exactly the kind of high-level S-corp planning that requires professional guidance. At $2.7M, you're in territory where small mistakes can be very expensive. One key point that hasn't been fully emphasized: the tax treatment is the same whether you take distributions or leave money in the S-corp - you'll pay personal income tax on all $2.7M regardless. The only real tax savings comes from the salary vs. distribution split, where distributions avoid payroll taxes. For your situation, I'd suggest getting a formal reasonable compensation study done before making any decisions. The IRS scrutinizes high-income S-corp owners much more closely, and having proper documentation of your salary determination could save you significant audit costs down the road. Also consider timing - if this is a one-time windfall vs. ongoing income, that affects what salary level would be considered reasonable. A business owner making $2.7M consistently would likely need a higher salary than someone who had an exceptional year due to a large contract or sale. The 37% federal rate is just income tax - you'll need to add payroll taxes on the salary portion, but those are capped for Social Security. Most of your income would only face Medicare taxes (2.9% combined) plus the 0.9% additional Medicare tax on high earners.

Great question about compensation studies and timing strategies! Formal reasonable compensation studies typically run anywhere from $2,500 to $8,000 depending on complexity and the firm doing the analysis. At your income level, this is definitely worthwhile insurance - I've seen audit settlements that cost 10-20x that amount. Regarding timing strategies, the pass-through nature does limit some options, but there are still planning opportunities. You can't defer the tax on S-corp income to future years since it all passes through in the year earned. However, you can time when you actually distribute the cash (separate from the tax obligation), and you might have some control over when certain income is recognized depending on your accounting method. For salary timing, you do have some flexibility - you could potentially adjust your salary up or down during the year based on how profits are tracking, as long as you end up with a reasonable annual amount. Some businesses pay higher salaries early in profitable years, then reduce them if profits don't materialize as expected. The key is having documentation for whatever approach you take. At $2.7M, you're absolutely in the zone where the IRS pays attention, so every decision should be defensible with clear business reasoning and market data.

What tax software are people using for situations like this? I'm using TurboTax and can't figure out how to explain the 1099-NEC discrepancy anywhere.

I went through something very similar last year! My 1099-NEC had the wrong amount in Box 1 ($3,200 instead of $4,850) and also had Box 7 marked incorrectly. Here's what I learned: 1. Definitely try to get a corrected form first - send a written request to the company with your actual payment records attached. Give them about 2-3 weeks to respond. 2. If they don't issue a correction before you need to file, go ahead and report your actual income ($7,340) on Schedule C. The IRS wants you to report all income you actually received, regardless of what the 1099 says. 3. Keep detailed records of EVERYTHING - your invoices, contracts, payment confirmations, bank deposits, and your request for correction. Also document any communication with the company about the error. 4. Consider attaching a brief statement to your return explaining the discrepancy. Something like "1099-NEC received shows $5,875 in Box 1, but actual payments received were $7,340 as documented in attached records." The Box 2 marking is definitely wrong for graphic design work - that's only for direct sales of consumer products. Don't worry too much about it affecting your filing, just make sure your Schedule C clearly shows your business as graphic design services. You're being responsible by catching this early. Most people don't even notice these errors!