That's really smart advice about getting documentation from the original attorney! I hadn't thought about requesting a different agent either - that could definitely help if the current one isn't familiar with grantor trust regulations. I'm wondering though, if we do end up needing to get an attorney's opinion on the trust document, would that opinion letter also help clarify what needs to happen going forward now that my mother-in-law has passed? It seems like there might be two separate issues here - whether an EIN was required during the audit period (2022) and whether we need one now for future filings.

This is exactly the kind of clear, structured approach I needed! Your timeline idea makes perfect sense - separating the 2022 audit period (when mother-in-law was alive) from the current post-death requirements. I'm definitely going to document everything in writing like you suggested. It sounds like having that paper trail could be crucial if we need to escalate to a supervisor or if there are any disputes later about what was discussed. One quick question - when you requested to speak with the supervisor in your situation, did you have to provide specific reasons for the request, or could you simply ask for escalation because you disagreed with the agent's interpretation of the grantor trust rules?

You can absolutely request to speak with a supervisor without having to provide elaborate justification. In my case, I simply told the agent that I disagreed with their interpretation of the grantor trust requirements for the audit period and would like to discuss the matter with their supervisor who might have more experience with these types of trust tax issues. The agent was actually quite professional about it and scheduled a call with the supervisor for the following week. The supervisor was much more knowledgeable about the timing distinctions and quickly understood that the 2022 audit period had different requirements than the current post-death situation. I think the key is to be respectful but firm - something like "I'd like to request a supervisor review of this EIN requirement since I believe there may be a misunderstanding about the applicable regulations for the tax year under audit." Having your documentation ready (trust documents, relevant tax code citations, timeline) will make the conversation much more productive when you do get to speak with the supervisor.

This is really helpful, thanks! Did you notice any difference in how they handled business deductions compared to your CPA? I'm especially curious about things like equipment depreciation and business travel expenses - my current accountant seems to be overly conservative with those.

This is exactly the kind of real-world experience I was looking for! The idea of interviewing preparers at different locations is brilliant - I never would have thought to do that. Did you find that the more experienced preparers were harder to get appointments with, or were they generally available? Also, when you say "appropriately aggressive" with deductions, can you give an example of something your new preparer claimed that your CPA wouldn't touch? I'm trying to get a sense of whether I'm potentially leaving money on the table with my overly cautious current accountant.

That's rough! Do you think it would have been better to roll your SEP IRA into a 401k first, then do the backdoor Roth? I've heard that can help avoid the pro-rata issue.

Yes, rolling your SEP IRA into a 401(k) first would have completely avoided the pro-rata issue! Since 401(k)s aren't included in the pro-rata calculation, you could have then done a clean backdoor Roth conversion with just your non-deductible traditional IRA contributions. This is actually a common strategy called "reverse rollover" - moving your pre-tax IRA money into an employer plan to clear the way for future backdoor Roths. Not all 401(k) plans accept rollovers from IRAs though, so you'd need to check with your plan administrator first. For anyone reading this who has significant pre-tax IRA balances and wants to do backdoor Roths going forward, definitely look into this option before doing your conversions!

Great questions! For the December 31st balance rule, it's based on the year you actually do the conversion. So if you convert in January 2025, you'd use your December 31, 2024 balances for the pro-rata calculation. The timing within the year doesn't matter - whether you convert in January or December, you use that year's ending balances. And yes, you absolutely need to file Form 8606 for any year you make non-deductible contributions, even if you don't convert! This form tracks your "basis" (the after-tax money you've contributed) which is crucial for future conversions. Missing these forms can cause major headaches because the IRS won't know about your non-deductible contributions when you eventually convert. If you missed filing Form 8606 in past years, you should file amended returns to include them. There might be penalties, but it's better to fix it now than deal with bigger problems later when the IRS assumes all your conversions are fully taxable.

I used H&R Block software for this exact situation last year. The software itself didn't have specific guidance for ITIN-to-SSN amendments, but it did let me file the 1040-X. I had to manually write in the explanation about the ITIN rejection and new SSN in Part III. The tricky part was that the software didn't prompt me to include the supporting documents (SSN card copy, rejection notice, etc.), so I had to remember to print and mail those separately. Honestly, for something this specific, I'd consider paying a tax pro who specializes in international student taxes - it's worth the peace of mind.

This is incredibly helpful! I'm actually in a very similar situation right now - got my ITIN rejected and just received my SSN last week. Quick question about the cover letter you mentioned - did you keep it brief or include detailed explanations about your visa status and timeline? I'm worried about providing too much information versus not enough context for the IRS processor. Also, did you face any issues with state taxes during this process? I filed state returns in two different states last year and I'm not sure if I need to amend those as well or if the SSN change only affects federal returns.

That's a good point I hadn't considered. Is it too late to negotiate my rate if I've already agreed to a certain amount? Has anyone successfully gone back to renegotiate after realizing the tax implications?

It's never too late to renegotiate, especially if you can frame it in terms of the value you provide. I wouldn't directly say "I didn't realize taxes would be so high" as that might seem unprofessional. Instead, approach it as "Based on the work I've been doing and the value I'm providing, I'd like to discuss adjusting my rate to $X." The best time to have this conversation is after you've proven your worth but before starting a new project phase. Alternatively, you could ask for additional responsibilities to justify the higher rate. Most clients expect contractors to increase their rates periodically, especially if you're doing good work. Just be professional and confident when you ask - the worst they can say is no.

I've heard about the S-Corp approach but isn't there a lot of extra paperwork and fees involved? Like you have to run payroll, file separate tax returns, pay state fees, etc. Is it really worth it for someone making under $100k?

You're right about the extra paperwork and costs. Generally, the S-Corp election becomes worth it when you're making around $60k+ in net profit, but it varies by state. The break-even point depends on your state's corporate fees, payroll processing costs, and additional accounting expenses. The main costs include: quarterly payroll taxes, annual corporate tax return (usually $500-1500 if you hire someone), state annual fees (varies widely by state), and potentially payroll software. But if you're saving $6500 like @d69e71ffdcaf mentioned, those costs are easily justified. One tip: you don't have to decide immediately. You can make the S-Corp election retroactively for the current tax year up until March 15th of the following year. So you could see how much you make this year and then decide if it makes sense.