Just to add on to what others have said - you mentioned "We filed for tax year 2023... For tax year 2024..." Just to make sure - are you actually filing your 2024 taxes already? Because the filing season for 2024 taxes doesn't start until 2025. Did you mean you're filing 2023 taxes now or did you already do your 2024 estimate?

This is a really complex situation that highlights how confusing tax interactions can be at higher income levels. Based on what you've described, I'd recommend a systematic approach: First, definitely verify the W-2 coding as others suggested - compare your final 2023 paystub to your W-2 Box 1 to ensure the DCFSA contribution was properly excluded from taxable wages. Second, at your income level ($445k), you're well above the phase-out threshold for the Child and Dependent Care Credit, so the DCFSA should still provide benefit by reducing your taxable income. The fact that removing it lowers your tax liability suggests there might be an interaction with other provisions - possibly AMT, other credit phase-outs, or even how your tax software is handling the calculations. I'd strongly recommend having a tax professional review this specific situation. The interplay between high income, DCFSA, and various tax provisions can create unexpected results that general tax software might not handle optimally. A CPA familiar with high-income tax situations could identify exactly what's causing this counterintuitive result and help you structure things properly for future years.

One more thing to consider with the timing of RMDs and Roth conversions - if your mom is planning to make Qualified Charitable Distributions (QCDs), those count toward satisfying the RMD but aren't taxable income. That could give you more room for Roth conversions in lower tax brackets. Just make sure the QCDs are processed BEFORE the Roth conversions, since they need to count toward the RMD first.

Great discussion everyone! I just wanted to add one practical tip that helped me when I was in a similar situation with my father's accounts. We found it really helpful to create a simple spreadsheet tracking his monthly RMD withdrawals alongside our planned Roth conversion timeline. Each month, we'd update how much of the annual RMD had been satisfied, which made it crystal clear how much "room" we had for conversions without violating the RMD-first rule. Also, don't forget that if your mom has multiple traditional IRAs, the RMD can be satisfied from any combination of them, but the conversions need to come from accounts that have already satisfied their proportional RMD share. This gave us more flexibility in our timing and allowed us to be more strategic about which accounts to convert from based on their investment performance. The key is just staying organized and keeping good records. We kept a simple log showing RMD satisfied to date, remaining RMD obligation, and conversion amounts by account. Made tax time much easier too!

Has anyone else had issues with the bar association not sending proper receipts for these expenses? I paid almost $2,000 for my initial licensing but the receipt they sent doesn't break down the costs properly. My accountant says I need better documentation if I want to deduct these as business expenses.

The timing distinction mentioned by GalaxyGuardian is spot-on and crucial for your situation. Since you paid most of these fees while working as a 1099 contractor, you're likely in good shape for deducting them on Schedule C for 2022. One additional consideration: make sure you can demonstrate that obtaining your bar license was "ordinary and necessary" for your paralegal/contractor work. Even though you weren't yet practicing as an attorney, having legal credentials could reasonably be considered necessary for advancing your legal consulting services or enhancing your value as a contractor in the legal field. Keep detailed records of exactly when each payment was made relative to your employment status changes. The $1,800 bar exam fee and $950 character and fitness application were likely paid while you were still a 1099 contractor, making them strong candidates for business deductions. The $650 licensing fee timing will depend on exactly when in September you received your license versus when you transitioned to W-2 status. Also worth noting: some attorneys have successfully argued that bar admission costs are startup expenses for their legal practice, which can sometimes provide additional deduction opportunities even if the timing doesn't work perfectly for Schedule C treatment.

This thread has been incredibly educational! As someone new to running youth sports organizations, I had no idea about the complexities of handling business donations vs. sponsorships. One question I haven't seen addressed: if you're setting up sponsorship tiers for future fundraising, do you need to register anywhere or get any special permits to formally offer advertising/sponsorship services? Or is this something that falls under normal business operations for an LLC? I'm thinking about starting a similar program for our local youth volleyball club, but want to make sure I'm not missing any regulatory requirements. The last thing I want is to accidentally run afoul of any business licensing rules while trying to help kids get to tournaments! Also, huge props to @Lim Wong for asking this question in the first place - the responses here have given me a roadmap for handling our own fundraising challenges. Sometimes the business side of youth sports feels more complicated than the actual coaching!

This has been such a valuable discussion! As someone who helps run a youth soccer league, I can confirm that the advice here is spot-on. We went through a similar learning curve when we first started accepting larger sponsorships. One thing I'd emphasize that hasn't been mentioned much - make sure you're tracking ALL expenses related to the tournament, not just the obvious ones. Things like travel coordination time, administrative costs, even the cost of creating and printing sponsorship materials can be legitimate business deductions that help offset that taxable income. We started using a simple spreadsheet to track every dollar in and out for each tournament/season, and it made tax time so much easier. Our accountant was actually impressed with our record-keeping! Also, don't be afraid to ask other youth sports organizations in your area how they handle sponsorships. Most coaches/organizers are happy to share what they've learned - we're all in this to help kids, after all. The local Little League chapter gave me some great templates when I was starting out. Your sponsor sounds like a wonderful community partner, and those kids are going to have an amazing tournament experience. The fact that you're being so diligent about handling the business side properly shows you really care about doing right by everyone involved - the kids, the sponsor, and your organization's future sustainability.

Had this exact same error last month! The issue is usually that TurboTax is comparing the wrong boxes. Make sure you're looking at the right form - sometimes people accidentally look at their paystub instead of the actual W-2. Also double-check that you didn't accidentally enter the numbers in the wrong fields when inputting your data. If your W-2 shows both Box 18 and 19 have amounts, re-enter them carefully and it should resolve the error.

For anyone still having this issue, another thing to check is if you have multiple W-2s from different employers. Sometimes TurboTax can get confused when aggregating state tax information across multiple forms. Make sure each W-2 is entered separately and completely before moving on to the next one. Also, if you moved states during the year, you might need to file returns in multiple states which can complicate the Box 18/19 calculations. The error usually clears up once all forms are properly entered with matching state wage and withholding information.