You're absolutely not alone in feeling frustrated by this! The IRS tracking system is honestly pretty outdated - they get all the raw data but don't provide the calculations we actually need as taxpayers. For your situation with the lost documents, Gabriel's suggestion about requesting old tax returns is spot on. But here's another tip that might help: if you had the same financial institution for your IRA over those 8 years, try calling them first. Many brokerages can provide historical contribution summaries going back several years, which might be faster than waiting for IRS transcripts. Also, if you used tax software like TurboTax or H&R Block in previous years, they often store your old returns online. You might be able to log into your old account and download your Form 8606 from previous years to reconstruct your basis. The whole system definitely needs modernizing - other countries handle this much more efficiently by calculating taxes for their citizens instead of making everyone figure it out themselves!

This is such a helpful thread! I've been dealing with the same confusion about Form 5498 and non-deductible IRA contributions. What really clicked for me after reading everyone's responses is that the Form 5498 serves multiple purposes - it's not just about what I need to report on my current tax return, but also creates a paper trail for the IRS to track things like RMDs and conversions down the road. @Eli Wang - your original question really resonated with me because I had the exact same confusion about why the fair market value gets reported if we don't use it directly. Now I understand it's more about the IRS having complete records of account growth over time. One thing I'd add for anyone in a similar situation: make sure you're filing Form 8606 every single year you make non-deductible contributions, even if your tax software doesn't explicitly prompt you for it. I almost missed this one year because I was using a different tax program that didn't walk me through IRA basis tracking as clearly. That form is crucial for maintaining your basis records with the IRS, and it's what will protect you from double taxation when you eventually withdraw those contributions.

Great thread everyone! As someone who also got tripped up by MAGI calculations, I wanted to add one more consideration that might be relevant. If you have any employer stock purchase plans (ESPP) or receive restricted stock units (RSUs), these can also impact your MAGI calculation. The discount from ESPP or the value of vested RSUs gets included in your W-2 income, which then flows into your MAGI. I mention this because a lot of people forget about these when they're trying to estimate whether they'll hit the Roth IRA phase-out limits. If you get RSUs that vest throughout the year, it can push your income higher than expected and potentially disqualify you from direct Roth contributions. The good news is that if you realize mid-year you're going to be over the limit, you can either recharacterize your Roth contribution to traditional, or do the backdoor Roth strategy that others mentioned. Just make sure to track all your income sources when planning your IRA strategy!

This has been such an informative thread! I'm in a similar situation as the original poster and had no idea there were different MAGI calculations for different purposes. One thing I wanted to add that might help others - if you're using tax software like TurboTax or H&R Block, they usually calculate your MAGI automatically for IRA contribution purposes, but they don't always make it clear which version they're showing you. I learned this when I was trying to figure out my ACA premium tax credit eligibility and the MAGI number in my tax software didn't match what I needed. Also, for those mentioning the backdoor Roth strategy - my CPA warned me that if you do this, make sure your IRA custodian can handle the conversion process smoothly. Some brokers make it really easy with online forms, while others require paperwork and phone calls. Fidelity and Vanguard both have pretty streamlined processes from what I've experienced. The strategic 401k contribution adjustment to stay under the Roth limit is brilliant advice. I wish I had known about that earlier - I ended up having to do a backdoor Roth when I could have just shifted more money to my traditional 401k instead!

Does anyone know if bonuses are treated differently for Social Security tax purposes? I'm getting a $40k bonus in December and I'll have already earned about $155k in regular salary by then.

Great question about the 2025 Social Security tax maximum! Just to add some additional context to what others have shared - the $168,600 wage base limit is set by the Social Security Administration and applies to all earned income, including salary, wages, bonuses, and self-employment income. One thing that catches people off guard is that if you have multiple jobs throughout the year, each employer withholds Social Security tax independently without knowing about your other income sources. This can result in overpayment, but as others mentioned, you can claim the excess as a refund when filing your return. Also worth noting: if you're self-employed in addition to having W-2 income, the limit applies to your combined earnings. So if your W-2 wages already reach the $168,600 threshold, you won't owe Social Security tax on your self-employment income (though you'll still owe Medicare tax). The annual adjustments to this limit have been pretty substantial lately - it jumped from $147,000 in 2022 to $168,600 in 2025, so it's definitely worth keeping track of if you're in that income range!

One thing nobody mentioned yet - KEEP YOUR OLD PHONE as a backup for your business! My tax person told me this creates a stronger case for the new phone being primarily for business use. If you're still using your personal phone for most personal stuff and the new one mostly for eBay, it's easier to justify a higher business use percentage.

Great discussion everyone! As someone who's been through this exact situation with my online business, I wanted to add a few practical tips that helped me: 1. **Screen time reports are your friend** - Both iPhone and Android have built-in screen time tracking that shows how much time you spend in each app. Screenshot these monthly and keep them in a folder labeled "Business Records [Year]". This creates concrete evidence of your business vs personal usage patterns. 2. **Document your business justification** - Write a simple one-page memo explaining WHY you need the phone upgrade for your business (bigger screen for barcode scanning, faster processor for inventory management, better camera for product photos, etc.). This shows the IRS that it's a legitimate business need, not just wanting a new toy. 3. **Consider your upgrade timing** - If possible, buy the phone early in the tax year so you can establish a full year of business usage patterns. This makes your deduction more defensible. 4. **Don't forget accessories** - Business-related phone accessories (cases, car mounts, portable chargers used for business) can also be deducted using the same business percentage. The key is being reasonable and consistent with your documentation. The IRS knows that business owners use their phones for both purposes - they just want to see that you're not claiming 100% business use when it's clearly mixed.

The 5500-EZ filing requirements are so confusing! I missed filing mine too and got hit with penalties. Does anyone know which tax software handles these forms properly? I use TurboTax for my regular taxes but they don't seem to support these specialized retirement plan forms.

I went through this exact same situation last year! The panic is real, but you're not alone in missing this filing requirement. Here's what I learned from my experience: First, yes you do need to file Form 5500-EZ for plan termination even though it's been 2 years. The IRS considers a rollover to an IRA as terminating the Solo 401k plan. Since your combined plan assets were around $270k, you definitely exceeded the $250k threshold that triggers the filing requirement. The good news is that the IRS has reasonable cause provisions for late filings, especially when you can demonstrate that the failure was due to circumstances beyond your control - like not being informed by your financial institutions about this requirement. When you file, include a detailed reasonable cause statement explaining exactly what happened: the TD Ameritrade acquisition, Schwab's inability to support Roth 401ks, and the fact that neither institution informed you of the 5500-EZ requirement. Document everything with dates and reference any correspondence you had with them. I also recommend checking if you qualify for the DOL's Delinquent Filer Voluntary Compliance Program (DFVCP), which often results in reduced penalties for good faith late filers. Don't wait any longer though - the penalties do continue to accrue, and voluntary compliance always looks better than being contacted by the IRS first.