This is a great question and I've seen many organizations struggle with this exact issue. The key thing to understand is that the IRS looks at the direct recipient of the donation, not the ultimate destination, when determining tax deductibility. Since you're a 501(c)(7), donations made directly to your organization are not tax-deductible to the donor, even if you plan to pass 100% of the funds to a qualifying 501(c)(3). The donor's tax deduction is based on who they're writing the check to, not where the money eventually goes. Here are the cleanest approaches I've seen work: **Option 1: Direct donations with your club as organizer** Have donors make checks payable directly to the 501(c)(3) charity. Your club collects and forwards these donations. This maintains tax deductibility since the charity is the direct recipient. **Option 2: Charity-sponsored event** Work with the 501(c)(3) to officially sponsor your event. They handle all payment processing and issue tax receipts directly to donors. Your club focuses on event logistics and promotion. Regarding event expenses - if you use Option 1, you cannot use any of those donated funds for expenses since they belong to the charity. You'd need to cover event costs through separate fundraising (ticket sales, sponsorships, etc.) or have the charity reimburse you for approved expenses. I'd recommend speaking directly with the 501(c)(3) you're supporting - they likely have experience with this type of partnership and may have established procedures that make everything much simpler.

I've dealt with this exact situation with our local veterans' association fundraiser last year. What really helped us was getting everything documented upfront with the 501(c)(3) we were supporting. We ended up going with the direct donation approach - donors made checks payable to the charity, but we collected them at our event and forwarded them in batches. The charity provided us with donation forms that included their tax ID number and official letterhead, which made donors feel confident about the tax deductibility. One thing I'd strongly recommend is setting up a meeting with the charity's treasurer or development director before your event. They can walk you through their preferred process and may even provide pre-printed donation envelopes or receipts. Most established charities have handled this type of partnership before. Also, make sure you're crystal clear with potential donors about the process. We had signs at our registration table explaining that checks should be made out to the charity (not our club) for tax deduction purposes. This eliminated confusion and actually increased our donation totals since corporate sponsors knew they'd get proper documentation. The key is transparency and proper documentation - when everything is set up correctly, it benefits everyone involved.

I'm dealing with this exact same nightmare right now! Filed February 12th and have had the 570 code for 6+ weeks. What's driving me crazy is that I called last week and the rep told me "everything looks normal, just wait 21 days" - but it's already been WAY longer than that! Based on what everyone's sharing here, it sounds like I need to stop accepting those generic responses and really push to get transferred to someone who can see the actual details. The lost verification letter issue is seriously concerning - I've been checking my mailbox religiously but haven't received anything from the IRS. Going to try the Tuesday morning strategy and specifically ask about any notices they might have sent. It's ridiculous that we have to become tax code detectives just to get basic information about our own refunds! Thank you everyone for sharing your experiences - this thread is more helpful than three different IRS phone calls I've made.

This thread is incredibly valuable - thank you all for sharing such detailed experiences! I'm also stuck with a 570 code since mid-February filing (going on 6 weeks now). What strikes me most is how consistent the pattern is: generic responses from Level 1 reps, lost verification letters, and the need to really push for specific information. I've called twice and gotten the standard "still processing" response both times. Based on everyone's advice here, I'm planning to call this Tuesday at 7am sharp and immediately request a Level 2 agent who can see detailed case notes. I'm also going to specifically ask about any notices they may have sent, since that seems to be where so many people find their answers. One question for those who've been successful - when you ask for a Level 2 agent, do you need to give a specific reason, or can you just request the transfer directly? The accountability gap here is frustrating, but this community support has been more helpful than any official IRS resource. Will report back with my results!

Has anyone used TurboTax or H&R Block's withholding calculators? Are they any good for figuring out how to fix withholding problems mid-year? My spouse is having a similar issue with under-withholding.

I went through this exact same nightmare last year! The new W-4 form is so confusing compared to the old one with allowances. Here's what worked for me: I immediately calculated roughly how much I should have been paying in federal taxes for those 3 months (you can use last year's tax return as a guide - just divide your total federal tax by 12 and multiply by 3). Then I filled out a new W-4 with that amount PLUS my normal withholding divided by the remaining pay periods and put it all in Step 4(c) as additional withholding. For example, if you normally should have $200 withheld per paycheck and you missed $600 over 3 months, and you have 9 months left in the year, you'd put $200 + ($600/18 paychecks) = about $233 extra per paycheck in Step 4(c). Don't panic - this is fixable! The key is acting quickly so you have more paychecks to spread the catch-up amount over. Also, make sure you keep all your paystubs to show the IRS you tried to fix it mid-year if there are any issues when you file.

Has anyone noticed that FreeTaxUSA sometimes has issues with the 8606 form? Last year I had to manually enter some stuff because it wasn't calculating my basis correctly after a conversion.

This is a really common mistake! At $95k income, you're definitely above the deduction threshold if you're covered by a workplace retirement plan. The correct approach is: 1. Don't take the Traditional IRA deduction - you're not eligible 2. File Form 8606 to report your $3,200 as a non-deductible contribution 3. Report the conversion to Roth on your return The reason your tax software is behaving this way is because you can't do both - either it's a deductible contribution (which you're not eligible for) OR it's a non-deductible contribution that requires Form 8606. Since you converted immediately, there shouldn't be any taxable gain on the conversion itself. You'll get a 1099-R next year showing the distribution, but since you're properly reporting the non-deductible basis on Form 8606 this year, the conversion won't be taxable. Think of it this way: you put in post-tax money ($3,200), so when you convert that same post-tax money to Roth, there's no additional tax owed. The 8606 is crucial because it tells the IRS "hey, I already paid taxes on this money.

One thing nobody's mentioned yet - in some states, forming an LLC (even as a DRE) means you'll have to pay additional taxes or fees that you wouldn't as a sole proprietor. In California, for example, there's a minimum $800 annual tax just for having an LLC, even if you make no profit! Definitely check your state's requirements before deciding. In some cases, the extra costs might outweigh the liability benefits, especially if you have a very small low-risk business.

For your jewelry business in Michigan, you're in luck! Michigan has relatively low LLC fees - just a $50 filing fee to create the LLC and no annual franchise tax like California has. Michigan also doesn't have that $800 minimum tax burden. However, you will need to file an Annual Statement with the state (around $25) to keep your LLC in good standing. Overall, Michigan is pretty LLC-friendly compared to states like California or New York. Since you're already doing Schedule C filing, the DRE route could work well for you - you'd get the liability protection without changing your federal tax situation, and Michigan's fees are reasonable. Just make sure to weigh the state filing costs against the potential liability protection benefits for your specific business situation.