Don't forget to check if you already paid taxes on the money that was rolled over! I messed this up once. If you made after-tax contributions to your previous retirement account and then rolled those over, you need to make sure you're not taxed on that money again. Form 8606 is your friend here. It tracks the non-deductible contributions you've made to traditional IRAs over time. If any of your rollover came from after-tax money, you'll need this form to avoid double taxation.

Form 8606 can be tricky, but it's manageable once you understand what it's tracking. The form essentially keeps a running total of your "basis" - the after-tax money you've contributed to traditional IRAs over the years that you shouldn't be taxed on again. If you're concerned about past years, you can file amended returns using Form 1040X if you discover you've been double-taxed on after-tax contributions. The IRS typically allows you to go back three years to claim refunds for overpaid taxes. For your current situation with the rollover, if any portion came from after-tax contributions (like from a 401k with after-tax money), you'll definitely need Form 8606. Your plan administrator should have provided documentation showing the pre-tax vs. after-tax portions of your rollover. If you can't find this information, contact them directly - they're required to track this for you. Most tax software will prompt you for Form 8606 if you indicate you have basis in traditional IRAs, but you might need to look for it in the "less common forms" or "additional forms" section.

Here's what worked for me after 3 years of verification: Step 1: Create an ID.me account before filing Step 2: Verify your identity proactively through ID.me Step 3: Link this to your IRS online account Step 4: File your taxes after completing this process Since doing this, I haven't had to go through the verification process again. It's like pre-verifying yourself before the IRS asks you to.

I've been dealing with this same issue! Got flagged for verification in 2023 and again this year. What's been frustrating is that nobody at the IRS can give you a straight answer about WHY you're being selected or what you can do to prevent it. From what I've gathered talking to other people in similar situations, it seems like once certain factors in your return trip their system (could be income changes, specific deductions, geographic location, etc.), you're more likely to get flagged again. But it's not necessarily permanent. One thing that helped me was keeping detailed records of the verification process itself - what documents they requested, how long it took, etc. That way if it happens again, I'm better prepared and know exactly what to expect. Still hoping this year will be my last time dealing with this headache though! 🤞

Just wanted to add something important that I learned the hard way - make sure to set aside some money for taxes throughout the summer, especially if you end up being classified as an independent contractor! When I worked as a camp counselor two years ago, I was so excited to get my paychecks that I spent everything right away. Then tax season came and I owed money because not enough was withheld (I was technically an employee but they didn't withhold much). It was a scramble to come up with the cash. My advice: put about 15-20% of each paycheck into a separate savings account just for taxes. If you end up getting a refund, great - you have extra money! If you owe, you're covered. This is especially important if you're getting tips too since those often aren't taxed upfront. Also, don't forget about FICA taxes (Social Security and Medicare) - these get taken out regardless of your income level if you're an employee, or you'll owe self-employment tax if you're a contractor. The math can get confusing but it's better to be prepared!

Great thread everyone! As someone who's helped a lot of young people with their first tax situations, I want to emphasize a few key points that can save you headaches: **The most important thing to do RIGHT NOW** is to ask your camp during orientation about your employment classification. Don't wait until you get your first paycheck to find out if you're an employee or contractor - this affects everything from how much tax is withheld to what forms you'll receive. **For your specific situation with $3,500 income**: You likely won't owe federal income tax, but you'll still owe FICA taxes (Social Security/Medicare) if you're an employee, or self-employment tax if you're a contractor. Many first-time workers get surprised by this. **Michigan specific tip**: Michigan requires filing if you had ANY state tax withheld, regardless of income amount. So even if your federal filing isn't required, you might still need to file state. **Documentation is everything**: Start a simple folder (physical or digital) right now for all your tax documents. Keep every paystub, any receipts for required work supplies, and notes about your employment classification. Future you will thank present you! The advice about setting aside 15-20% for taxes is spot on. Even if you think you won't owe anything, it's better to be prepared. And definitely keep track of any cash tips - they're taxable income even if nobody tells you that upfront. You're asking the right questions early, which puts you way ahead of most people! Don't stress too much - first-time filing is always intimidating but you've got this.

Has anyone successfully negotiated with their employer to reduce the Annual Lease Value used in these calculations? My company is using the maximum value in the IRS range for our vehicle class, and I think they could justifiably use a lower value.

This is exactly the kind of situation where having proper documentation becomes crucial. I went through something similar when I first got a company car and the deductions seemed way off. A few things to double-check beyond what others have mentioned: 1. Make sure your employer is using the correct "first made available" date for determining the fair market value. If you got the car 6 months ago, they should be using the FMV from when you first received it, not when the company originally purchased/leased it. 2. Verify that they're calculating your personal use percentage correctly. Some companies incorrectly include weekends and holidays when the car just sits in your driveway as "personal use days" rather than basing it purely on actual mileage. 3. Ask for a detailed breakdown of how they calculated both the ALV and your personal use percentage. You're entitled to understand exactly how they arrived at these numbers. The $10,250 ALV does seem high for a basic mid-size sedan unless it's a newer model with higher-end features. I'd definitely recommend looking up your specific vehicle on KBB or Edmunds to get the fair market value, then cross-reference that with the IRS ALV tables to see if they're in the right ballpark. Don't be afraid to push back if the numbers don't add up - most payroll departments will work with you if you can show them specific documentation that their calculations might be off.

Have you considered ProSeries Professional? I switched from TurboTax to ProSeries for my personal return because of similar issues with investment reporting. It's designed for professionals but isn't overly complicated once you get used to the interface. The K1 input screens are much more comprehensive and it handles the flow-through calculations automatically. It's not cheap (about $500 for the basic package) but worth it for complex returns.

Former tax professional here. Consider going with ATX Professional. It's less expensive than most pro options (around $350) but handles K1s beautifully. I used it for years in my practice and it's particularly good with investment partnerships. The learning curve isn't too steep if you're already tax-savvy enough to spot CPA errors.