Just wanted to add some specific FreeTaxUSA navigation tips for your backdoor Roth situation: 1. Go to the Deductions & Credits menu 2. Select "Retirement/IRA" 3. When asked about Traditional IRA contributions, select "Yes" 4. Enter the $16,000 contribution amount 5. Indicate it was a non-deductible contribution 6. Later in the section, it will ask about conversions to a Roth 7. Enter the conversion amount and date The software should then generate Form 8606 correctly. HOWEVER - for the excess contribution (anything over $6,000), you'll need to also report that. Look for the section about "Excess Contributions" and follow those prompts too. I did this exact process last year and it worked perfectly. The key is making sure to indicate the contribution was non-deductible.

Your friend is in the middle of what's called a "backdoor Roth IRA" which is completely legal but needs specific reporting. The issue isn't just that the previous accountant missed it - the $16,000 amount is a red flag. The IRA contribution limit for 2022 was only $6,000 (or $7,000 for those 50+). Unless your friend was contributing for both 2021 and 2022 in that single transaction (which would be unusual timing in April), he's looking at an excess contribution situation.

Word of warning - I tried the annualized method last year and messed up the calculations. Turned out I was using my gross income instead of my net business income after expenses. Double-check that you're using the correct income figures when you do your calculations!

Great question about the annualized income method! You're absolutely correct that you can pay $0 for Q1 if you had zero income during that period. This is one of the main advantages of using Schedule AI - it aligns your payments with when you actually earn money. A few key points to keep in mind: 1. You'll need to recalculate your required payment each quarter based on your cumulative income for the year so far. So if Q2 goes well, make sure your June 15th payment covers the appropriate amount. 2. Keep detailed records of your income by date - you'll need this when completing Schedule AI with your tax return. 3. Consider setting aside a percentage of each payment you receive for taxes, even if you're not making quarterly payments yet. This helps avoid cash flow issues when payments do become due. 4. If your income becomes more predictable later in the year, you can always switch back to regular equal installments for the remaining quarters. The annualized method is definitely the way to go for irregular income situations like yours. Just stay on top of the calculations each quarter!

I've been through this SBTPG nightmare three years running. Last year they held my refund for 7 days after receiving it from the IRS. The year before that, it was 5 days. This year I wised up and just paid my preparation fees upfront. My refund came direct from IRS to my bank account in 13 days total. No more SBTPG for me ever again!

I'm going through the exact same thing right now! SBTPG told me they received my refund on 2/20 and won't release it until 2/26. It's so frustrating because I can see on my IRS transcript that they already sent the money, but now I'm stuck waiting another 6 days. At least we both have concrete dates - I was reading about people who don't even know when their funds will be released. Still doesn't make the wait any easier when you're expecting that money for bills and expenses.

The job offer itself has tons of red flags beyond just asking for your IP-PIN: 1. Only 3 days of emails before job offer? No video interview? 2. Suspiciously high pay ($32/hr plus $45 overtime) for a job with flexible hours 3. Promising equipment before even properly verifying your identity 4. Vague job description with no clear responsibilities 5. No company website or online presence This follows the exact pattern of work-from-home scams I've seen before. They hook you with great pay and flexibility, then try to steal your identity or run check fraud schemes. Some will even send fake checks for "equipment purchases" then ask you to send money back, only for their check to bounce later.

This is absolutely a scam - do not provide your IP-PIN under any circumstances! As someone who works in tax preparation, I can tell you that legitimate employers NEVER need your IP-PIN during the hiring process. They only need your SSN and information from your W-4 for payroll setup. The IP-PIN is specifically designed to protect you from tax identity theft, and the IRS explicitly states it should only be shared with your tax preparer when filing your return. What these scammers are doing is collecting enough personal information to file fraudulent tax returns and steal refunds. Beyond the IP-PIN request, there are multiple red flags here: no legitimate company information, unrealistic pay for minimal vetting, vague job responsibilities, and the rushed timeline. This follows the classic pattern of employment scams targeting desperate job seekers. Please report this to the FTC at ReportFraud.ftc.gov and forward the emails to phishing@irs.gov. Then block all communication with them. Your instincts were right to be suspicious - trust that feeling and keep looking for legitimate opportunities through verified job boards and company websites.

I'm dealing with this exact same situation right now! I care for my disabled mother through our state's Medicaid waiver program and received a 1099-NEC for $18,000. Like you, I've been pulling my hair out trying to get tax software to recognize that this income should be exempt under Notice 2014-7. After reading through all these responses, I think I'm going to try the taxr.ai approach first since it seems specifically designed for this situation. If that doesn't work out, I'll consider the Claimyr service to get direct IRS help. One question for everyone - do the payments have to be made directly by the state Medicaid office to qualify, or can they go through a third-party agency? My payments come from a company called "Home Care Solutions" that contracts with our state's Medicaid program. I'm hoping this still qualifies under the notice since it's ultimately Medicaid funding for family care. Thanks to everyone who shared their experiences - this thread has been incredibly helpful for understanding my options!

I've been following this discussion with great interest as someone who works with families navigating Medicaid waiver programs. Just wanted to add a few important clarifications that might help others in similar situations: First, Notice 2014-7 specifically applies to payments for "difficulty of care" - meaning care provided to individuals with physical, mental, or emotional handicaps. The payments must be made under a state Medicaid waiver program, and the care must be provided in the individual's home or the caregiver's home. Second, it's crucial to understand that ONLY the portion of payments that represents difficulty of care compensation is excludable. If your payments include room and board or other services, those portions may still be taxable. Most state programs will provide documentation breaking this down if requested. Third, for those worried about audits - the IRS is actually quite familiar with Notice 2014-7 exclusions now, especially as more states have expanded their waiver programs. The key is proper documentation and clear labeling on your return. Finally, I'd recommend contacting your state's Medicaid office directly to request a letter confirming your payments qualify under Notice 2014-7. Having this official documentation can save you headaches later and provides additional protection if there are any questions about your exclusion. Hope this helps clarify some of the technical aspects for everyone dealing with this situation!