Does anyone know if HRBlock handles this Form 8606 issue better than FreeTaxUSA? I'm considering switching tax software because I keep having issues with where to enter non-deductible contributions.

I ran into this exact same issue last year! The key is that FreeTaxUSA separates current year contributions from the basis tracking questions, which is super confusing. Here's what you need to do: 1. Go to the **Deductions** section (not the retirement/IRA section where you'd expect) 2. Look for "Traditional and Roth IRA Contributions" or similar wording 3. Enter your $7000 contribution for 2024 4. When it asks if the contribution is deductible, select **"No"** or **"Non-deductible"** 5. Complete any follow-up questions about income limits, etc. Once you do this, FreeTaxUSA should automatically populate Form 8606 Line 1 with your $7000. The form should then show: - Line 1: $7000 (2024 non-deductible contribution) - Line 2: $6500 (prior year basis) - Line 3: $13500 (total basis) The software will then correctly calculate that only the $1400 in gains from your 1099-R is taxable, not your $13500 in contributions. This workflow has caught me off guard before because logically you'd think all IRA stuff would be in the retirement section, but FreeTaxUSA requires you to enter contributions as potential deductions first before it knows to treat them as non-deductible basis.

Pro tip from someone who's been self-employed for 20+ years: One way to avoid underpayment penalties is to adjust your W-4 withholding at any regular job you have. If you have multiple income sources and one is a W-2 job, you can increase your withholding there to cover taxes on your other income. The IRS treats withholding differently than estimated payments - withholding is considered to have been paid equally throughout the year EVEN IF it wasn't. So if you realize in December you're going to owe more, you can increase your withholding for your last few paychecks and it's treated as if you paid it evenly all year.

don't forget about the safe harbor rules that can help you avoid penalties: 1. If you pay 100% of last year's tax liability (or 110% if your AGI was over $150k), you're safe from penalties regardless of your current year income 2. If you pay 90% of current year tax liability in equal installments, you're good 3. If you owe less than $1,000 after subtracting withholdings and credits, no penalty these saved me when my income jumped from like $90k to $250k last year lol

Dealing with this exact issue was a nightmare for me last year. One thing nobody mentioned yet - make sure you have the CFC's "tested income" calculation done correctly. My accountant initially included income from active business that should have been excluded from GILTI.

As someone who's been through multiple CFC acquisitions, I want to emphasize something crucial that could save you significant money - make sure you get the purchase price allocation right in your acquisition documents. The way you allocate the purchase price between tangible assets, intangible assets, and goodwill can dramatically affect your future GILTI calculations. If you can allocate more of the purchase price to depreciable tangible property, you'll get a larger "qualified business asset investment" (QBAI) deduction against your GILTI inclusion in future years. This is especially important for December acquisitions since you'll be dealing with GILTI calculations immediately. Many buyers overlook this during the transaction and end up paying much more GILTI tax than necessary. The regulations under Section 951A allow for significant planning opportunities if you structure the acquisition properly from the start. Also, don't forget to make the high-tax election under Section 951A(c)(2)(A)(i)(III) if your CFC paid substantial foreign taxes. This can completely eliminate GILTI on high-taxed income, but you need to make the election with your return - it's not automatic.

I switched from a national chain ($800) to a local CPA ($500) for my S-Corp and got much better service. The national chains use a business model based on volume and standardized processes, while local CPAs can be more flexible with pricing for simple returns. Look for a small local firm that specializes in small businesses. Be upfront about your situation - tell them you have everything organized and just need the final tax prep. Many will offer tiered pricing based on complexity.

As a small business owner who's been through this exact situation, I can relate to your frustration with the pricing. What really opened my eyes was when I asked my tax preparer for a detailed breakdown of their process. Turns out they spend about 20 minutes on data entry but another 90 minutes on review, verification, and compliance checks I never considered. The real value isn't just in the data entry - it's in catching potential issues before they become IRS problems. Last year my preparer caught that I was misclassifying some expenses that could have triggered an audit. They also identified a depreciation error from two years back that saved me from having to amend multiple returns. That said, $750-$1200 does seem steep for a straightforward S-Corp. I'd recommend getting quotes from 2-3 local CPAs who specialize in small businesses. Many will give you a phone consultation to understand your situation and provide a more accurate quote. You might find someone who charges $400-600 for the same quality of work, especially if you emphasize how organized your records are. The key is finding someone who values efficiency and is willing to price accordingly when a client makes their job easier.

22 Has anyone tried just getting a wage and income transcript directly from the IRS? Sometimes they have your income info from other sources even if the W-2 wasn't properly filed.

This is unfortunately becoming more common with larger employers. I had a similar situation with a retail chain a few years back. Here's what worked for me: 1. **Document everything** - Keep records of all your paystubs, any communication attempts with Walgreens, and when you contacted the IRS. This creates a paper trail. 2. **Try multiple channels with Walgreens** - Don't just call HR. Try emailing their corporate payroll department, and if that doesn't work, reach out through their corporate website contact form. Sometimes different departments are more responsive. 3. **Set a deadline** - Give Walgreens a reasonable timeframe (like 10 business days) to provide your W-2, then move to the next step if they don't respond. 4. **File Form SS-8** with the Social Security Administration if you believe you were misclassified as an independent contractor instead of an employee. This sometimes happens with employers trying to avoid their tax obligations. The key is being persistent but methodical. Large corporations like Walgreens have procedures for this, but sometimes you need to escalate to get someone who actually knows what they're doing. Don't let them brush you off with "we'll look into it" - ask for specific timelines and follow-up dates. Your refund will definitely be delayed, but the IRS understands this isn't your fault. Stay on top of it and you'll get it resolved!