Great point about account types! Just to add some clarity for anyone reading - if this is a Roth IRA, the rules are different too. With Roth accounts, you can withdraw your original contributions (basis) at any time tax-free, but earnings withdrawals before age 59½ may be subject to taxes and penalties. For taxable accounts like the original poster seems to be describing, the proportional method mentioned earlier is typically the default, but as others have noted, you might have options like specific identification that could be more tax-efficient depending on your situation. Keep detailed records of all your transactions including dates, amounts, and any reinvested dividends - this will make basis calculations much easier whether you do them manually or use software to help.

One thing I'd add that hasn't been mentioned yet - if you're dealing with partial withdrawals regularly, it might be worth considering tax-loss harvesting strategies alongside your basis calculations. When you're withdrawing from investments that have gains, you could potentially sell other investments at a loss to offset some of the taxable gains. Also, timing can matter. If you've held the investment for less than a year, you'll pay short-term capital gains rates (taxed as ordinary income), but if you've held it for more than a year, you'll get the more favorable long-term capital gains rates. In your example with the $160 taxable gain using the proportional method, this rate difference could be significant depending on your income bracket. Just make sure you don't run into wash sale rules if you're planning to repurchase similar investments within 30 days of selling at a loss.

These codes appear in different scenarios with very different outcomes. I've seen 570/971 combinations that resolved in a week with no action needed, while others required extensive documentation and took months. The broader context matters - if you claimed refundable credits like EIC or CTC, you're more likely to need verification. If you've had identity theft issues in the past, that could trigger additional scrutiny. Compared to previous filing seasons, the IRS is implementing stricter verification protocols this year to combat fraud, so these codes are appearing more frequently than in 2022-2023.

I'm dealing with the same codes right now and the uncertainty is really stressful! What helped me was creating a simple tracking spreadsheet with the date each code appeared, what I found online about them, and any actions I took. For code 570, I learned it doesn't always mean there's a problem - sometimes it's just their standard review process, especially if you filed early or claimed certain credits. The key is checking if you get any correspondence (that's what the 971 indicates). I set up informed delivery with USPS so I'd know immediately if the IRS sent something. In the meantime, I'm trying not to refresh my transcript daily since that just increases my anxiety. Has anyone here had experience with how long these typically take to resolve when no additional documentation is needed?

Just to clarify - are you seeing these codes on your 2024 Account Transcript (not Return Transcript)? I filed on January 29th, 2025, and just got these same codes yesterday with the March 10th date. My understanding is that the date shown (March 10th) is when the action was taken internally, not necessarily when we'll receive any notice or resolution.

I'm in the exact same situation! Filed January 31st and got both 570 and 971 codes with March 10th date. Been 41 days for me too. This is my first time seeing these codes together and honestly been losing sleep over it. Reading through everyone's experiences here is actually really reassuring - sounds like most people eventually get their refunds processed, just with delays. I'm working from home too and was really counting on this money for some overdue bills. Going to check my transcript daily and watch for that notice in the mail. Thanks for starting this thread, it's helpful to know we're not alone in this!

Double check it's not an advance payment on your 2025 tax refund. With two jobs, you might be having too much tax withheld if you didn't adjust your TD1 forms properly. The CRA sometimes makes adjustments mid-year if they detect significant overwithholding. Happened to a friend of mine last year!

I'd recommend checking your CRA My Account first - that's your best bet for getting a definitive answer without waiting on hold. Look under "Benefits and Credits" to see if there are any recent payments listed with explanations. The timing of starting your second job is likely relevant. When employers submit your employment information to CRA, it can trigger automatic benefit calculations. Since you mentioned it's labeled "fed-prov/terr Canada," it's almost certainly a legitimate government benefit - either GST/HST credit, Canada Workers Benefit, or a provincial supplement you qualify for. Keep the money separate until you confirm what it is, but don't stress too much. These surprise deposits are usually benefits you're actually entitled to receive based on your tax filing and current income situation.

Just pay what they're asking and move on. I had almost the exact same thing happen and wasted MONTHS going back and forth trying to get it fixed. In the end, I still had to pay the amount they calculated using the state wages. The tax authority doesn't care about your W-2 errors - they want their money based on what they consider the correct amount.

I completely agree with Keisha - don't just pay without investigating further. A 23% discrepancy is substantial and could indicate a serious error that might affect you in future years too. Here's what I'd recommend as your next steps: 1. **Gather all 2023 pay stubs** and add up the gross wages to see what the actual total should be 2. **Contact your local tax authority** directly and ask them to explain their calculation - they should be able to tell you exactly how they arrived at the higher amount 3. **Request a detailed explanation** from your wife's former employer about how they calculated local vs. state wages If there is indeed an error on the W-2, you'll want to get it corrected properly rather than paying incorrect taxes. The local tax authority's notice suggests they're confused too ("unable to determine from the Form W-2 the reason"), which indicates this isn't a standard situation. Don't let an unresponsive employer or tax preparer discourage you from getting to the bottom of this. A difference this large is worth the effort to resolve correctly.