Submitted mine last Sunday and it got accepted within an hour but transcript didn't update till Wednesday

I filed through TurboTax last Friday evening and got my acceptance email around 11 PM the same night. The IRS definitely accepts returns 24/7, but like others mentioned, the real processing happens during business hours. My "Where's My Refund" tool didn't show any updates until Tuesday morning. So you'll probably get that acceptance notification pretty quickly, but don't stress if nothing else moves until the weekdays!

13 Just wanted to mention something that nobody's brought up yet - if you're doing major renovations on your home AND monetizing the content, you might need to look into how this affects your homeowner's insurance and potentially capital gains when you sell the house. Our tax advisor mentioned this could get complicated if the improvements significantly increase your home's value.

This is such a helpful thread! I'm in a similar situation - just started a home renovation YouTube channel and have been totally confused about the tax implications. One thing I've learned from my research is that the IRS looks at several factors to determine if something is a legitimate business vs. a hobby: profit motive, expertise in the area, time and effort spent, expectation of asset appreciation, success in similar activities, history of income/losses, and amount of occasional profits. For content creators specifically, I've read that even if you're not profitable initially, you can still deduct legitimate business expenses as long as you can demonstrate you're operating with a genuine intent to make a profit. The key is maintaining excellent records and being able to justify how each expense directly relates to your content creation business rather than personal home improvement. I'm planning to set up a separate business checking account, create detailed expense categories (production equipment, materials used solely for demonstrations, editing software, etc.), and keep video logs showing how each purchase was used in content creation. Has anyone found other specific documentation strategies that work well for this type of business?

Question for people who've dealt with this: Does tax software automatically handle these forms correctly or do we need to manually override things? I'm using H&R Block software and it seems confused by my recharacterization.

Based on your forms and the discussion here, it looks like you're on the right track but there's one key step missing to stop that $23 penalty cycle. Your Form 8606 entries look correct - you're properly reporting the $9,448 total conversion amount with full basis, so no additional taxable income. The two 1099-Rs make sense: $390 from your 2022 recharacterization done in 2023, and $9,058 from your regular 2023 backdoor conversion. The ongoing $23 penalty on Form 5329 is happening because the IRS still considers you to have an "unused" excess contribution of $390 from 2022. Recharacterization moved the money from Roth to traditional (then back to Roth via conversion), but didn't eliminate the excess contribution itself. To stop the penalty for 2024 and beyond, you need to "apply" that $390 excess to a future year's contribution. The easiest way is to contribute $390 less to your Roth IRA in 2024. So if the limit is $7,000 for 2024, only contribute $6,610. This effectively uses up your excess contribution and should eliminate the penalty going forward. On your 2024 Form 5329, you'll report the prior year excess of $390 on line 22, but then show it as "applied to current year" which should zero out the penalty calculation. The math all checks out otherwise - you've handled a complex situation pretty well!

The confusion around test batches vs. PATH Act holds is because the IRS doesn't clearly communicate about their internal processes. According to Internal Revenue Code § 6402(m) and the Protecting Americans from Tax Hikes Act of 2015, the IRS CANNOT issue refunds for returns claiming EITC or CTC before February 15th - this is federal law, not just IRS policy. What's frustrating is that being in a test batch doesn't exempt you from this requirement. It's absolutely infuriating that they don't just tell people directly "your return is fully processed and will be released on February 15th" instead of making us guess based on cryptic transcript codes. The IRS Taxpayer Advocate has repeatedly criticized this lack of transparency in their annual reports to Congress.

Thank you all for this incredibly detailed discussion! As someone who filed January 20th and is still showing just one bar on WMR, this thread has been more helpful than hours of searching the IRS website. I just checked my transcript following @Mia Green's instructions and I'm seeing code 150 with a cycle code of 20240205 - so looks like I might be in daily processing! No other codes yet though. @Grace Patel makes an excellent point about the lack of transparency. It's 2024 and we're still playing detective with transcript codes to figure out basic processing status. The IRS could easily add a simple status like "Processed - Awaiting PATH Act Release" to WMR instead of leaving everyone in the dark. Has anyone else noticed if there's a pattern between acceptance date and cycle codes? Trying to figure out if my January 20th filing puts me in a better position than someone who filed January 25th, or if it really doesn't matter once we're all waiting for February 15th anyway.

Has anyone mentioned Required Minimum Distributions (RMDs) yet? Depending on when the original account owner died and the relationship between them, your aunt might be required to withdraw a certain amount each year according to specific schedules. The SECURE Act changed a lot of these rules in 2020. For most non-spouse beneficiaries who inherited after 2019, there's now a 10-year rule requiring the account to be fully distributed within 10 years of the original owner's death.

This is a complex situation that really highlights how inherited retirement accounts can create unexpected tax burdens for people who are already struggling financially. A few additional considerations for your aunt: Since she's living on such limited income, she might qualify for the Earned Income Tax Credit or other low-income tax credits that could help offset some of the tax liability from the IRA withdrawal. Also, if she needs to make additional withdrawals for basic living expenses, she should consider timing them strategically - maybe spreading them across tax years to minimize the impact on her Social Security taxation. Given that this is a "2nd generation" inherited IRA, the distribution rules are likely quite specific and time-sensitive. The brokerage firm should provide her with a clear explanation of her required distribution schedule in writing. If they can't or won't, that's definitely a red flag that she needs to seek help elsewhere. One more thing - make sure she keeps all documentation related to this inheritance and any withdrawals. The stepped-up basis rules for inherited assets can be tricky, and having proper records will be crucial for accurate tax filing.