Another overlooked option: If you absolutely cannot determine your basis accurately, you could consider a "fresh start" by doing a full backdoor Roth conversion. Take all your Traditional IRA money, pay the taxes on the full amount (assuming it's all taxable), and move to Roth. Then start tracking properly going forward. Yes, you might pay some extra taxes if you had non-deductible contributions in there, but the peace of mind and clean slate might be worth it for some people. I did this two years ago and while the tax hit wasn't fun, the simplicity going forward has been great.

One thing that hasn't been mentioned yet - if you're still completely stuck on reconstructing your basis, consider consulting with an Enrolled Agent (EA) or CPA who specializes in retirement accounts. They can help you work through the calculations and may have strategies for situations where records are incomplete. Many tax professionals have dealt with this exact scenario and can help you make reasonable assumptions based on your income history and contribution patterns. They can also advise whether it's worth filing amended returns for missed Form 8606s or if there are other approaches that make sense for your specific situation. The cost of a few hours with a qualified professional might be worth it to avoid potential penalties or overpaying taxes, especially if you have a substantial IRA balance or complex contribution history.

I can totally relate to this panic! I made the exact same routing number mistake with Wells Fargo about 6 months ago - used their wire transfer routing number instead of the electronic/ACH one for my $2,100 refund. I was absolutely convinced I'd lost the money forever. Here's what actually happened: Wells Fargo rejected the deposit after about 8 business days, and the IRS automatically converted it to a paper check. The whole process took about 25 days from start to finish. The "Where's My Refund" tool updated to show "Your refund will be mailed as a check" about 3 days after the bank rejection. One thing that really helped was calling Wells Fargo every few days and asking specifically about "pending ACH returns" - their regular customer service couldn't see it, but when I asked to be transferred to their ACH department, they could actually track the rejected deposit through their system. Don't lose hope! This is such a common mistake that banks and the IRS have streamlined processes for handling it. Your $1,300 is just taking a detour, but it will definitely reach you. The waiting is absolutely awful when you need the money urgently, but try to hang in there - you should see that status change very soon if you're already 10 days in.

I work as a customer service supervisor at a regional bank and can confirm everything people are saying here is accurate. The routing number mix-up (wire vs ACH/electronic) is incredibly common, especially during tax season. We probably process 15-20 of these rejected IRS deposits every week. Here's what happens on the banking side: When we receive a deposit with the wrong routing number type, our system automatically flags it as "invalid routing" and queues it for return. This usually happens within 5-10 business days, but sometimes takes up to 2 weeks depending on processing volumes. The rejection gets sent back to the IRS with specific codes that trigger their system to automatically issue a paper check. A few insider tips that might help: - Ask your bank to check their "ACH exception queue" or "return items pending" - this is where rejected deposits sit before being sent back - Most banks can see these pending returns in real-time, but you often need to speak with someone in their operations or ACH department rather than general customer service - The IRS usually updates their system within 3-5 business days after receiving the bank rejection Your refund is absolutely not lost - it's just going through the standard process for handling routing errors. Should be resolved within the next 1-2 weeks based on your timeline!

As someone who recently passed all three parts of the SEE exam, I wanted to add a few thoughts to this great discussion. The advice here is spot-on, especially about the importance of practice questions and understanding the "why" behind tax rules rather than just memorizing. One thing I'd emphasize that hasn't been mentioned much is the value of creating your own study schedule and sticking to it religiously. I found that consistency was more important than intensity - studying 1-2 hours daily for 8 weeks worked better for me than cramming for 4 weeks. Regarding which part to start with, I'd actually recommend Part 1 first since it covers individual taxation concepts that form the foundation for understanding business and representation topics in Parts 2 and 3. Plus, getting that first pass under your belt builds tremendous confidence. For timing between parts, I spaced mine about 6-8 weeks apart to allow proper preparation time without losing momentum. The entire process took me about 7 months from start to finish, including one retake on Part 2. Don't get too caught up in finding the "perfect" study materials - whether it's Gleim, Surgent, or Fast Forward Academy, they're all solid. The key is picking one comprehensive system and committing to it fully rather than jumping between resources. Best of luck to everyone on this journey - becoming an EA is absolutely worth the effort!

Coming from someone who just scheduled my Part 1 exam for next month, I want to thank everyone for this incredibly comprehensive discussion! The range of study approaches and resources mentioned here has been eye-opening. I've been using Surgent as my main course and found their adaptive learning technology really helpful for identifying my weak areas. But reading about the supplemental resources like taxr.ai and the specific IRS publications Dylan listed has me thinking I should diversify my approach a bit. One strategy that's been working well for me is creating flashcards for the trickier concepts (like the various AGI thresholds and phase-out ranges) using Anki. The spaced repetition really helps cement those details that are easy to mix up under exam pressure. For anyone just starting out, I'd also recommend taking a diagnostic test early on to see where you stand. Most of the major prep courses offer them, and it really helped me understand the scope of what I needed to learn. Don't be discouraged if you bomb it - I scored a 32% on my first diagnostic and now I'm consistently hitting 75-80% on practice exams. The journey is definitely challenging but this community makes it feel much less overwhelming. Thanks for sharing all your experiences and insights!

I've been using FreeTaxUSA for two years now and can confirm the rounding is totally normal! As others mentioned, the IRS actually expects whole dollar amounts. What I found helpful was keeping my own detailed records with cents for my personal tracking, but then letting the software handle the rounding for the actual forms. This way I have the precise amounts if I ever need to reference them, but I'm not stressing about the rounding on the tax forms themselves. One tip: if you're really concerned about accuracy, you can always double-check your final numbers against the IRS instructions for each form. They consistently mention rounding to the nearest dollar throughout their publications. FreeTaxUSA is just following standard tax preparation protocol.

I can definitely relate to your concerns about the rounding! When I first started using FreeTaxUSA a few years ago, I had the exact same worry. I'm a bit of a perfectionist when it comes to numbers, so seeing my carefully tracked $456.75 become $457 made me nervous too. But after using it for multiple tax seasons now, I can confirm what others have said - the rounding is completely standard and expected by the IRS. I've never had any issues with audits or questions about the rounded amounts. One thing that helped me feel more confident was actually looking at the official IRS forms directly (like the 1040 instructions). They explicitly state to round to the nearest whole dollar, so FreeTaxUSA is actually doing exactly what the IRS wants. It took me a while to trust the software, but now I appreciate that it handles this automatically rather than me having to remember to round everything manually. Your concern is totally understandable, especially if this is your first time using the software, but you're in good hands with their rounding system!

I'm a newcomer to this community but have been following tax issues for years, and this thread is incredibly informative! As someone who just started making after-tax 401k contributions this year, reading about everyone's Code E experiences is both educational and a bit concerning. It seems like the IRS automated system flagging these legitimate returns of after-tax contributions is a widespread problem. What strikes me is how consistent everyone's experience has been - Code E distributions with matching Box 1 and Box 5 amounts shouldn't be taxable, yet the automated notices keep getting sent out. For those who successfully resolved their situations, did you find that keeping your own detailed records of after-tax contributions made the process easier? I'm thinking I should start documenting everything now so I'm prepared if I ever face a similar situation with excess contribution returns. Also, has anyone noticed if this issue is getting better or worse over time? It seems like the IRS technology should be able to handle these standard retirement plan codes by now, but based on all these recent experiences, it doesn't sound like they've improved their automated matching system much.

As a newcomer here, I want to thank everyone for sharing such detailed experiences with Code E distributions! I'm currently facing the exact same situation - received a 1099-R with Code E showing $6,200 in both Box 1 and Box 5, and just got that dreaded automated IRS notice claiming the entire amount is taxable. Reading through this thread has been incredibly reassuring. Before finding this discussion, I was completely panicked and considering just paying the additional tax to avoid the hassle. Now I understand that when Box 1 equals Box 5 on a Code E distribution, it means I'm getting back my original after-tax contributions with no earnings, so there shouldn't be any additional tax owed. I'm going to follow the advice shared here and write a detailed response letter to the IRS explaining that this was a return of after-tax contributions, emphasizing the matching box amounts, and including a copy of my 1099-R. It's frustrating that their automated system can't handle these standard retirement plan situations, but at least I now know this is a common issue that gets resolved with proper documentation. This community is such a valuable resource - thank you all for taking the time to share your experiences and help others navigate these confusing tax situations!