I think everyone's overlooking that the student loan forgiveness is only 2 years away. If I were in your shoes, I'd probly just focus on that short term goal. 2 years of missing Roth contributions isnt gonna destroy your retirement. Have you ran the actual numbers? $1100/month savings on student loans for 24 months = $26,400 saved. That's WAY more than 2 years of max Roth contributions ($6k x 2 = $12k). Just sayin, might be worth taking the hit on retirement contributions to get that sweet loan forgiveness.

This is such a common dilemma for married couples with student loans! I went through the exact same situation a few years ago. Here's what I learned from my research and experience: The $10k income limit for Roth IRA contributions when married filing separately is brutal, but there are definitely workarounds worth considering: 1. **Backdoor Roth IRA** - As mentioned by others, this is probably your best bet. You contribute to a traditional IRA (non-deductible) and immediately convert to Roth. No income limits on conversions. 2. **Maximize your employer 401k** - This isn't affected by filing status, and many plans now offer Roth 401k options too. 3. **HSA if available** - Triple tax advantage and can be used as retirement account after age 65. For the student loan piece - definitely run the numbers on the total savings vs. opportunity cost. But honestly, with only 2 years left until forgiveness and $1,100/month savings, that's probably the financially smart move short-term. One thing to consider: can you and your wife adjust withholdings or estimated payments to get closer to that $10k threshold for next year? Sometimes small tweaks to pre-tax contributions can help you stay under limits while still optimizing the overall strategy. The Solo 401k suggestion is brilliant if you have any 1099 income!

Just to add a data point - I did something similar last year and it took the IRS about 4 months to process both the 1040X and the 1065. Make sure your client understands the timeline and that they might get confusing notices in the meantime since the systems don't automatically connect the amendment to the new filing.

This is a complex situation that requires careful handling! A few additional considerations beyond what others have mentioned: 1. **EIN requirement**: The partnership will need its own EIN if it doesn't have one already. This should be obtained before filing the 1065. 2. **Partnership agreement**: Even though not required by law, having a written partnership agreement is crucial for determining profit/loss allocations, especially if it's not 50/50. Without one, the IRS assumes equal partnership interests. 3. **State filings**: Don't forget about state-level amendments! Most states will require their own partnership return and individual amendments. 4. **Self-employment tax**: Make sure you understand how SE tax changes. Partners in a partnership are still subject to SE tax on their distributive share, but the calculation method differs from Schedule C. 5. **Books and records**: The partnership needs to maintain separate books and records going forward, which is different from sole proprietorship record-keeping. I'd strongly recommend getting professional help for this conversion given the complexity and potential penalties involved. The IRS tends to scrutinize these types of corrections more closely.

I work at a CPA office and we see this all the time with class action settlements. Here's a simple explanation: 1. Box 10 on the 1099-MISC is for reporting attorney fees paid directly from your settlement 2. These fees are NOT taxable to you 3. You DO need to report the full 1099-MISC including Box 10 4. You then take an adjustment to exclude the Box 10 amount from your taxable income Most tax software struggles with this because it's an unusual situation. In FreeTaxUSA, as others have mentioned, look for the option that says you received the form but didn't engage in business activity. The most common mistake people make is either paying tax on the attorney fees (which you shouldn't) or not reporting the 1099-MISC at all (which will trigger a notice from the IRS).

I went through this exact same headache with FreeTaxUSA last year! The key is knowing that Box 10 attorney fees create a "phantom income" situation - the IRS sees the full 1099-MISC amount but you're only taxable on your portion. Here's what worked for me: When FreeTaxUSA forces you into the Schedule C section because of Box 10, don't panic. Enter the 1099-MISC normally, then look for the section about "miscellaneous adjustments" or "other deductions." You'll want to create a negative adjustment equal to the Box 10 amount with a description like "Attorney fees from settlement - not taxable to recipient per IRC Section 62(a)(20)." The W-2 you received is straightforward - that's your actual taxable settlement amount with proper withholdings. The 1099-MISC Box 3 plus Box 10 should equal your gross settlement before attorney fees were deducted. One tip: Print out everything and keep good records. The IRS computer matching system will see that 1099-MISC and you want clear documentation showing you handled the attorney fees correctly. This is one of those situations where being thorough upfront saves you from potential notices later.

Has anyone else noticed that Venmo's reporting isn't always accurate when it comes to separating tips from payment? I've had instances where a customer will add a note saying "includes $15 tip" but the transaction just shows as a single amount with no breakdown. How are you guys handling that for record keeping?

For tracking tips when customers don't use Venmo's built-in tip feature, I've found it helpful to create a simple spreadsheet where I log each job with the base service fee and any additional tip amount mentioned in their payment notes. This way I have my own breakdown even if Venmo just shows one lump sum. What's worked well for me is taking a screenshot of the Venmo transaction right after I receive it, especially if the customer mentions the tip amount in their note. Then I enter it into my records while it's fresh in my mind. Even though the IRS doesn't require you to separate tips from regular income for tax purposes, having that detail has been super useful for understanding my customer relationships and pricing. I also started sending customers a quick text after finishing their service with something like "Payment received - $65 service + $15 tip. Thank you!" This creates a text record for my files and lets the customer know I saw their generosity, which seems to encourage repeat tipping.

Has anyone tried running this scenario through different tax software? I know inheriting an IRA is complicated but most tax programs should be able to calculate your RMD correctly. I'm dealing with an inherited Roth IRA which apparently has different rules.

I went through this exact same situation when my grandmother passed in 2021 at age 78. The confusion you're experiencing is totally understandable because the SECURE Act created these hybrid rules that many financial advisors are still getting wrong. Here's what I learned after consulting with a CPA who specializes in retirement accounts: Since your uncle died in 2021 (post-SECURE Act) and was already taking RMDs, you're subject to BOTH rules simultaneously - you must take annual RMDs based on your life expectancy AND completely empty the account by December 31, 2031 (10 years after the year of death). The key thing your tax preparer got wrong is that you don't have to take exactly 1/10 each year. You take the higher of: (1) the annual RMD calculated using the Single Life Expectancy Table, or (2) whatever amount ensures the account will be fully distributed by the 10-year deadline. I'd recommend getting a second opinion from a CPA or Enrolled Agent who specifically deals with inherited retirement accounts. The penalty for getting this wrong is 50% of the amount you should have distributed, so it's worth paying for expert advice to get it right.