Thanks for asking this! I had the same confusion last year. To add to what others said - the key thing is that ALL your credits (766, 768, etc.) get combined into your total refund amount. You won't get separate checks or deposits. The IRS just uses these different codes to categorize where each part of your refund is coming from for their internal tracking. So if you see $2000 in 766 credits and $800 in 768 credits, your total refund would be $2800 (assuming no other adjustments). Hope that helps clarify!

Just wanted to add that if you're seeing both 766 and 768, you're probably getting a decent refund! The 766 covers things like child tax credit, additional child tax credit, and other refundable credits, while 768 is specifically for earned income credit. I've noticed that when both show up on transcripts, it usually means you qualified for multiple credits which is awesome. Just keep checking for that 846 code with a date - that's when you'll know exactly when to expect your deposit!

This is exactly why divorce and taxes get so complicated! Your friends' accountant is being smart about timing. Here's the key issue: while married filing jointly, they can exclude up to $500k in capital gains from their primary residence. But once divorced, they each get their own $250k exclusion. The tricky part is the "use test" - both spouses need to have used the home as their primary residence for 2 of the last 5 years before the sale. If one moves out during divorce proceedings and they sell while still married, they might lose the full $500k exclusion if the moved-out spouse doesn't meet the use test. By waiting until after divorce and having proper language in the divorce decree (as others mentioned), they can ensure both qualify for their individual $250k exclusions. With $450k in gains, this covers them completely. Also consider: if their income drops after divorce (filing separately vs jointly), they might have better options for using those rental property losses. The passive activity loss rules at higher income levels can be brutal.

Another angle to consider - if they're selling multiple properties in the same year, they might want to look into a 1031 exchange for the rental properties instead of taking the losses all at once. Even though they're divorcing, they could potentially defer the capital gains on the rentals by exchanging into new investment properties. This could simplify the tax planning around the primary residence sale since they wouldn't be trying to coordinate the rental losses with the home sale timing. Plus, if one spouse wants to stay in real estate investing post-divorce, the 1031 could set them up better for the future. Of course, 1031 exchanges have their own complexity and strict timing requirements, but it might be worth discussing with their accountant as an alternative strategy. The key would be making sure the exchange is completed before the divorce is finalized so they can act as a unified entity for the exchange process.

This whole Mega Backdoor thing seems way too complicated. Wouldn't it be simpler to just max out your 401k and Roth IRA, then put the rest in a taxable account? I'm always suspicious of these "backdoor" strategies - feels like asking for an audit flag.

This is a great question that I struggled with too! The good news is that for Mega Backdoor Roth conversions of after-tax contributions, you can withdraw your original contribution amounts at any time without the 10% early withdrawal penalty. The penalty only applies to earnings on those contributions if withdrawn before age 59½. Here's why this works: Since you already paid taxes on the after-tax contributions going into your 401k, converting them to Roth doesn't create a taxable event. The IRS treats these converted contributions as "basis" that you can access penalty-free. However, make sure your 401k plan allows in-service distributions or in-plan Roth conversions - not all employers offer this flexibility. Also keep detailed records of your conversions and their dates, as you'll need this for tax reporting. Given your strong financial foundation (maxed HSA, 8-month emergency fund, low debt), the Mega Backdoor Roth strategy makes a lot of sense. The tax-free growth potential over time significantly outweighs keeping excess funds in a taxable account, especially since you maintain access to the contribution portion if needed.

these cycle codes are so confusing tbh. wish the irs would make this easier for regular ppl to understand

I'm on cycle 20250701 too! Just checked this morning and still nothing new. Good to know about the Thursday/Friday updates though - I've been checking randomly throughout the week like an idiot 😅 Hopefully we both see some movement this Friday!

I'm so sorry for your loss - losing a sibling is incredibly difficult, and having to handle their professional affairs during such a painful time adds another layer of stress. As someone who has worked in estate planning, I'd echo what others have said about transparency being the best approach. While your sister-in-law's feelings are completely understandable, clients who discover the truth later often feel more hurt by not being told directly than they would by receiving honest but gentle notification initially. One practical consideration that hasn't been mentioned yet: check if your brother had any client retainer funds or trust accounts that need to be handled according to your state's rules. These often have specific requirements for notification and transfer that are separate from the general practice transition. Also, if he had any ongoing monthly or quarterly services (bookkeeping, payroll, etc.), those clients will need more immediate attention to avoid service interruptions. You might want to prioritize notifying these clients first or having the new CPA reach out to them directly to ensure continuity. The suggestion about contacting your local CPA society is excellent - they often have volunteers who specialize in practice transitions and can walk you through state-specific requirements. Many also have grief counseling resources that might help your sister-in-law process this transition. Take care of yourselves - this is a marathon, not a sprint, and it's okay to ask for help from professionals who deal with these situations regularly.

I'm so deeply sorry for your loss. Losing a family member is devastating, and having to navigate the complexities of their professional practice during grief makes it even more challenging. I want to gently suggest that while your sister-in-law's emotional needs are completely valid and understandable, being transparent with clients about your brother's passing will likely serve everyone better in the long run. Many of his clients probably viewed him not just as their accountant, but as a trusted advisor they had personal relationships with. They deserve to know what happened, and they may actually want the opportunity to express their condolences and share positive memories. From a practical standpoint, you could phrase the notification simply and respectfully: "It is with heavy hearts that we inform you of [Brother's name]'s unexpected passing. To ensure your continued service, his practice is transitioning to [New CPA/Firm], who will uphold the same professional standards and personalized attention you've received." For accessing client information, check his computer for tax software like Drake, Lacerte, or ProSeries - these typically have client list export functions. If you can't access the systems, contact the software companies directly as they have protocols for these situations. Beyond the state board, notify the IRS (CAF system), his professional liability insurance, AICPA membership, and any local CPA societies. Consider reaching out to your local CPA society chapter for guidance - they often have volunteers who specialize in practice transitions. Take care of yourselves during this difficult time. Professional guidance from an attorney familiar with CPA practice transitions might also be valuable to ensure you're handling everything properly.