I'm really confused by all this ERTC amendment stuff... My CPA told me the reduction should only be for the refundable portion, not the nonrefundable part. But now I'm reading conflicting advice here. Does anyone have an actual IRS reference that clarifies this?

I went through this exact same situation with my S-Corp last year and can confirm what others have said - you need to reduce wage expenses by the FULL ERTC amount (both refundable and nonrefundable portions), excluding any interest received. The key thing to remember is that the ERTC is essentially the government reimbursing you for wages you paid, so you can't also deduct those same wages as a business expense. It would be double-dipping. For your $87k in 2020 and $112k in 2021 refunds, make sure you separate out any interest portion before calculating the wage expense reduction. The interest is taxable income but doesn't affect the wage deduction adjustment. One heads up - this will create a significant increase in your pass-through income, which means additional personal tax liability when you amend your 1040s. With amounts that large, you might want to consider making estimated payments to avoid underpayment penalties. The amendment process can take several months, so plan accordingly for the cash flow impact.

My accountant always tells me to focus on the "ordinary and necessary" test for business expenses rather than just the timing. If this conference is ordinary and necessary for your business type, the IRS is less likely to question it regardless of when you deduct it. Just make sure you have good documentation showing how it relates to your business - things like the conference agenda, notes you took, business cards you collected, etc. This has saved me multiple times during reviews.

This is exactly the kind of timing question that trips up so many small business owners! The key thing to remember is that for most small businesses using cash accounting, you generally deduct expenses in the year you both pay for them AND receive the economic benefit. Since your conference is in September 2025 and you're not paying until then, that's clearly a 2025 deduction. Even if you had prepaid in 2024, the IRS could still argue the economic performance doesn't occur until you actually attend the conference. One thing I'd add to the great advice already given - consider keeping a simple spreadsheet of planned business expenses like this so you can do better tax planning for next year. Knowing you'll have that conference deduction in 2025 might influence other timing decisions you make with income and expenses. Also, don't forget that if you travel for the conference, those travel expenses (flights, hotels, 50% of meals) are also deductible business expenses for the same tax year as the conference itself.

Hey Yara! Going through a divorce and dealing with tax codes solo is tough - been there myself. Just to add to what others have shared, make sure you're also watching for any 570 codes that might have appeared before the 826. Sometimes there are identity verification holds or other issues that can delay things even with the interest code showing. Also, since this is your first tax season post-divorce, double-check that your filing status and any dependent claims are correct - those can sometimes trigger additional review periods. The 826 is definitely good news though, and the interest rate this year isn't too shabby! Hang in there, sounds like you're on the right track.

I've been dealing with transcript codes for years as a tax preparer, and I want to echo what others have said - code 826 is indeed a positive sign! It means the IRS is paying you interest on your delayed refund. However, I'd add one important detail that hasn't been mentioned: the interest calculation starts from either April 15th (the original filing deadline) or the date you filed if you filed after the deadline. So if you filed early in February but are just seeing this code now, you're looking at a decent amount of interest. Also, @Yara, since you mentioned this is your first post-divorce filing, just double-check that you didn't accidentally claim any dependents that your ex-spouse also claimed - that's one of the most common causes for extended processing delays I see with newly divorced clients. The 826 code suggests you're past any major holds though, so that's encouraging!

Another option is to just estimate the Dec 31 value of your Traditional IRA. If you converted most/all of it, just put $0 or whatever small amount was left. If the actual 5498 shows a different amount when you get it in May, you can always file an amended return if the difference is significant. In my experience though, for most conversions, the difference won't materially affect your tax situation enough to warrant an amendment.

Pro tip: Call your brokerage and ask for the Dec 31 value over the phone. They can tell you even if the 5498 hasn't been issued yet. I did this with Vanguard last year for exactly the same situation and they gave me the info in 2 minutes!

One thing to keep in mind with HYSAs - the interest rates tend to fluctuate a lot more than regular savings. I started the year getting 3.75% but now I'm up to 4.25%. This means your projected interest might end up being higher than you initially calculated, which could slightly impact your tax planning.

Don't forget that HYSA interest is taxed at your ordinary income tax rate, not the lower capital gains rates. This surprises some people who are new to these accounts.