I've been following this thread as someone who went through almost the exact same situation a couple years ago. The confusion between SEP-IRA employer contributions and personal IRA contributions is so common, and I made the same mistake of thinking they were the same account. One thing that really helped me was creating a simple spreadsheet to track everything once I figured out I had separate accounts. I track my SEP-IRA employer contributions (which are tax-deductible for my business and tax-deferred for me personally), and separately track my traditional IRA contributions and whether they were deductible or non-deductible each year based on my income. For what it's worth, I ended up switching to Roth IRA contributions once I realized my traditional IRA contributions weren't deductible anyway. The simplicity of knowing that money is completely tax-free in retirement was worth paying the taxes upfront. Plus, no Form 8606 to worry about every year. The key insight for me was understanding that just because both accounts have "IRA" in the name doesn't mean they follow the same rules. Your SEP-IRA is essentially a workplace retirement plan (even though you're both the employer and employee), which is why it affects the deductibility of your separate traditional IRA contributions.

This thread has been incredibly helpful! I've been dealing with a similar situation where I have both a SEP-IRA through my consulting business and was making separate contributions that I thought were going to the same account. After reading through all these responses, I realize I need to check whether my separate contributions are going to a traditional IRA or if I somehow set up a Roth IRA without realizing it. The tax software confusion makes a lot more sense now - I was probably hitting those income limits for traditional IRA deductibility due to having the SEP-IRA coverage. The point about Form 8606 is really important too. I'm wondering if I've been missing this form in previous years if my contributions weren't deductible. Sounds like I might need to look into amended returns to establish my basis properly. Has anyone here had to go back and file amended returns to add missing Form 8606s? I'm curious how complicated that process is and whether it's worth doing or if I should just make sure to do it correctly going forward.

I completely understand that panic feeling! 😰 The 570 code definitely looks scary when you first see it, but from everything I've learned in this community, it's usually just a temporary processing hold. The IRS puts these on returns when they need to verify something - could be matching your W-2 info, checking credits you claimed, or sometimes it's just random selection for review. Most people here report their 570s clearing up within 2-3 weeks without any action needed. Since you're dealing with caregiving responsibilities and really need that refund, I know the uncertainty is extra stressful. Keep checking for a 971 code - that would mean they're sending you a letter explaining what they're reviewing. Try to hang in there and give it at least a week before panicking too much. This community is great for support, so keep us updated! 🤞

I can totally relate to that sinking feeling when you see an unexpected code! 😅 I'm pretty new to understanding transcript codes myself, but from reading through this community, it sounds like the 570 is actually one of the less scary ones to get. The fact that so many people here have shared similar experiences where it resolved within a couple weeks is really reassuring. I know it's hard when you're depending on that refund, especially with caregiving responsibilities - the financial stress just makes everything worse. But it seems like you're in good hands with this community! Everyone's advice about watching for the 971 code and trying not to check obsessively (guilty as charged on that one!) sounds really solid. Fingers crossed it clears up quickly for you! 🤞 Keep us posted on what happens!

I had a similar experience last year! Those codes are actually a good sign - it means your return is being processed normally. The 150 code confirms they've accepted your return, and the 766/768 codes are your refundable credits. Since you mentioned PATH act, you're definitely right about the delay for EITC and Additional Child Tax Credit, but since we're already past February 15th, your refund should be released soon. I'd expect to see a direct deposit date (846 code) appear on your transcript within the next week or two. The IRS is usually pretty good about hitting their "by early March" timeline for PATH returns.

I'm in a similar situation with my transcript showing codes 150, 766, and 768 from when I filed in late January. It's so confusing trying to decode what all these numbers mean! From what I've gathered reading through everyone's responses, it sounds like these are actually positive signs that our returns are moving through the system. The PATH act delay has been frustrating but at least we're past the February 15th hold period now. Hoping we all see those 846 deposit codes show up soon! 🤞

If you're buying clothes that aren't your size and specifically for professional use, those ARE deductible! I'm a theatrical costume designer and face similar issues. The key difference is that you're not buying these as "clothing" but as "professional supplies" or "production costs" for creating your portfolio. Make sure you're categorizing them correctly on your Schedule C. Also, don't forget you can deduct: - Transportation costs to/from shoots - Equipment (steamer, styling kits, etc) - Software for managing your portfolio - Reference materials (fashion magazines, books) - Portion of your home used exclusively for inventory storage Get a good accountant who understands creative fields ASAP!

Great thread! As someone who's been through multiple IRS audits for my creative business, I want to emphasize the importance of the "business purpose" test. The IRS will look at whether your clothing purchases have a genuine business purpose beyond personal use. For fashion stylists, you're in luck because your profession inherently requires purchasing clothing as "raw materials" for your creative work - similar to how a painter buys paint or a photographer buys lighting equipment. The fact that these items happen to be clothing doesn't automatically disqualify them. Key documentation tips from my audit experience: - Keep a business journal noting the creative concept/theme for each shoot - Photo evidence showing the items being used professionally - Client emails or contracts referencing specific styling requirements - Inventory tracking showing items stored separately from personal wardrobe The IRS auditor actually commended my documentation approach because it clearly demonstrated business intent rather than personal shopping disguised as deductions. Don't let the general "clothing isn't deductible" rule scare you away from legitimate business expenses!

One thing that might help clarify the SEP IRA vs Solo 401k question - you can actually convert your existing SEP IRA to a Solo 401k if your Solo 401k plan allows for rollovers. This could be beneficial since you'd get the employee contribution option ($22,500) that you don't have with the SEP IRA. However, be careful about the timing if you've already made SEP IRA contributions for this tax year. You can't make employer contributions to both plans for the same tax year from the same business, even if you do a rollover partway through. Also worth noting - with your S Corp structure and $145k salary, your total contribution space to a Solo 401k would be around $58,750 ($22,500 employee + ~$36,250 employer at 25% of compensation). This might actually be less than the $66k you were planning for the SEP IRA, so run the numbers carefully before switching.

One additional consideration that hasn't been mentioned - if you're planning to hire employees in the future (beyond just your wife), a SEP IRA requires you to contribute equally for all eligible employees as a percentage of their compensation. With a Solo 401k, you lose eligibility once you have employees who aren't your spouse. Given your business growth trajectory ($850k-$1.2M revenue), you might want to think about whether you'll need to hire W-2 employees down the road. If so, you might want to consider other options like a traditional 401k plan that can accommodate employees, or carefully structure any future hires as contractors rather than employees. Also, make sure you're considering state tax implications. Some states don't follow federal rules exactly for retirement plan deductions, so the optimal choice might vary depending on where your S Corp is based. The timing issue others mentioned is crucial - if you're already late in 2023, the SEP IRA's flexibility to be established until your filing deadline might outweigh the Solo 401k's higher contribution potential, especially if you can't increase your salary before year-end.