Has anyone actually withdrawn their excess HSA contribution? I called my HSA provider (HealthEquity) about this and they made it sound super complicated. They said I needed to request a "distribution of excess contributions" and that I'd get a special tax form for it. But then I'd need to sort out how much earnings those excess contributions had made?? How do you even calculate that? The whole thing sounds like a headache.

I went through this exact situation two years ago and wanted to share what I learned. First, definitely get that $125 distribution error fixed on your amendment - the IRS can be picky about HSA reporting accuracy. For the $550 excess, I'd strongly recommend calling your HSA provider ASAP to request a return of excess contributions rather than carrying it forward. Even though you've already filed, you likely still have time if you're within the extended deadline (October 15th). Here's why this approach is better: when you carry forward an excess contribution, you'll pay the 6% excise tax ($33) this year, and if you mess up the math on reducing next year's contributions (which is easy to do), you could end up paying the penalty multiple years. I made that mistake and ended up owing penalties for three years before I figured out how to properly "use up" the excess. The return of excess contributions route means you pay tax on any earnings, file one amendment to fix everything, and you're done. Much cleaner. Your HSA provider should be able to calculate the earnings portion automatically - you don't have to figure that out yourself.

Don't forget about potential foreign exchange implications! If you're sending USD to a foreign sub that operates in another currency, you'll need to account for forex gains/losses on those intercompany loans. This can get messy depending on the functional currency of each entity and how often exchange rates fluctuate.

One thing I haven't seen mentioned yet is the importance of considering your state tax implications as well. Many states have their own rules around intercompany transactions and transfer pricing that don't always align with federal treatment. For example, some states require separate accounting for intercompany interest income/expense, and others have specific addback requirements that could affect your state tax liability. California and New York are particularly aggressive in this area. Also, since you mentioned this is your first time dealing with international tax at scale, I'd strongly recommend getting a transfer pricing study done by a qualified professional if your transaction volumes are significant. The IRS has been increasingly focused on intercompany pricing audits, especially for tech companies with IP development across multiple jurisdictions. Having proper documentation upfront is much cheaper than trying to reconstruct it during an audit.

Make sure u also consider what happens with state taxes! Some states follow federal MFS rules but others dont. We almost messed this up cuz our state (Oregon) had different rules for MFS filers selling a home than the federal govt does.

I went through this exact situation last year and want to share what I learned. The key thing is to make sure you're splitting based on actual ownership, not just convenience. Since you mentioned the deed has both your names and you're in Florida (non-community property state), you'll each report 50% of the sale. One thing that caught me off guard was tracking down all the documentation for basis adjustments. Keep receipts for any major improvements you made - new roof, HVAC system, kitchen remodel, etc. These increase your basis and reduce your taxable gain. I found old receipts in my files that saved us about $15,000 in reportable gain. Also, don't forget about selling expenses like realtor commissions, title insurance, and closing costs - these reduce your proceeds and lower your gain. Each of you can deduct 50% of these costs on your respective returns. The $250,000 exclusion per person when filing separately is usually more than enough for most people, but make sure you both meet the 2-out-of-5-years residency test independently. Good luck!

Does anyone know if the 10-year rule applies in this situation or if you can stretch the distributions? I inherited my dad's IRA in 2022 also and my financial advisor is telling me I HAVE to empty it in 10 years, but I'm seeing conflicting info online.

The complexity of your situation actually highlights why many people struggle with inherited IRA rules. Since your father was 75+ when he passed in January 2022, he was definitely required to be taking RMDs, which means you'll need to continue taking annual distributions while also emptying the account within 10 years. The good news is that the IRS has been relatively lenient with inherited IRA penalties during 2022-2023 while they finalized regulations. Your court documentation showing when you actually gained control of the assets will be crucial evidence if any penalties are assessed. Here's what I'd recommend: First, contact the IRA custodian immediately to get a complete distribution history for your father's account - you need to know if he missed any RMDs before his death. Second, calculate your 2024 RMD based on the account balance as of December 31, 2023, and take it before year-end. Third, document everything related to your legal battle for control of the estate. The fact that you couldn't access the funds until 2024 due to legal proceedings should provide reasonable cause for any missed distributions. Just make sure you're current going forward and keep all your court documentation.

is it possible that the IRS notice is about something besides the extra withholding? sometimes they send W-4s for other reasons too like if your allowances are way off from what they think you should claim. did the notice mention anything specific?

I've been through this exact situation! Got a similar notice when I increased my withholding by about $40 per paycheck. The IRS notice can be scary at first, but it's really just their way of confirming you made the change intentionally. What you did is totally normal and smart - having extra withholding helps ensure you don't owe money at tax time. The IRS automated system flagged the change because it was different from your previous withholding pattern, not because you did anything wrong. Make sure to read the notice carefully for response instructions. Usually they just want you to confirm that you authorized the W-4 change. You can typically respond by phone or mail. Don't stress about it - this is more of a security check than anything punitive. Keep doing the extra withholding if it works for your financial planning!