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Thank you all for sharing your experiences! As someone new to dealing with these codes, this thread has been incredibly helpful. I just noticed 570 and 971 codes on my transcript dated April 5th and April 12th respectively. Based on what everyone's shared here, it sounds like I should wait it out for another week or two before getting concerned. Quick question though - should I be worried that my codes are appearing later in the season? I filed on March 1st but just got these codes now. Is there any difference in processing time for codes that appear later versus earlier in the filing season? Also, has anyone noticed if the IRS phone wait times are getting better or worse as we get deeper into tax season? Really appreciate this community for helping calm my nerves! π
Welcome to the 570/971 club! π Don't worry about the timing - I've seen these codes appear throughout the season and they seem to resolve at similar rates regardless of when they show up. Your March 1st filing date with codes appearing in April is actually pretty normal, especially if you claimed any credits like EITC or CTC. From what I've observed in similar threads, the IRS seems to process these verification holds in batches, so timing can be all over the place. As for phone wait times, they've been consistently terrible all season (sorry!), but most people in your situation don't need to call anyway. Based on your dates (April 5th and 12th), I'd give it until around April 26th before considering any action. The 7-day gap between your codes is a good sign that it's likely routine verification. Keep checking your transcript every few days and you'll probably see that 846 code pop up soon! π€
This is such a valuable thread! I'm currently dealing with these same codes and feeling much more confident after reading everyone's experiences. Got my 570 on March 22nd and 971 on March 29th - so right in line with the typical 7-day pattern many of you mentioned. What's really helpful is seeing the actual success stories with specific timelines. @Marina Hendrix, your 18-day resolution from start to finish gives me hope! And @Aileen Rodriguez, those statistics about 76% resolving automatically are reassuring. I'm a freelance graphic designer and this is actually my third year getting these codes. The first time I panicked and spent hours trying to call the IRS. The second time I waited it out and it resolved in 16 days. This year I'm just monitoring my transcript and staying patient based on past experience. One thing I've noticed is that my cycle code changed from 20241105 to 20241205 when the 971 appeared - has anyone else seen their cycle codes update like this? Wondering if that's another indicator of normal processing vs. something more complex. Thanks everyone for sharing your knowledge and keeping each other calm during this stressful process! ππͺ
Hi Alice! Thanks for sharing such a detailed breakdown of your experience. As someone completely new to tax codes (this is my first year dealing with anything beyond a simple W-2), this thread has been a lifesaver! Your point about the cycle code changing is really interesting - I just checked mine and noticed the same thing happened! Mine went from 20241005 to 20241105 when my 971 code appeared on April 12th. I had no idea what that meant, but if it's normal processing then that's one less thing to worry about. It's so reassuring to hear from someone who's been through this multiple times. Your 16-day resolution last year gives me a good benchmark for what to expect. I'm definitely taking the "monitor and wait" approach based on everyone's advice here rather than trying to call right away. Question for you - when you say you're monitoring your transcript, are you checking daily or just a few times a week? I've been checking every morning but wondering if I'm being a bit obsessive about it! π Thanks again for sharing your freelancer perspective - it seems like us gig workers really do encounter these codes more frequently than traditional employees!
Just want to add - I did a similar transaction last year and the timing requirements of the 1031 exchange are no joke! The 45 days to identify potential replacement properties flies by, especially in today's market where good investment properties get snapped up quickly. My advice: start looking for replacement properties BEFORE you close on your sale. You can't officially identify them until after closing, but having a shortlist ready will save you a lot of stress during those 45 days. Also, work with a real estate agent who understands investment properties and 1031 exchanges. I wasted precious time explaining the requirements to an agent who kept showing me properties that wouldn't work for my exchange.
Thanks for the timing advice! Did you end up finding enough suitable properties within the 45 days? I'm worried about identifying properties that might go under contract with someone else before I can make an offer.
I identified 5 properties (remember you can identify up to 3 without restriction, or more if you follow certain valuation rules). Two of them went under contract before I could make an offer, but I successfully closed on my third choice within the 180-day window. My QI suggested using the "three property rule" at minimum - identify 3 properties regardless of their value. But you can also use the "200% rule" where you can identify more properties as long as their combined value doesn't exceed 200% of your sold property. Given today's competitive market, I'd recommend identifying as many properties as the rules allow to give yourself options.
One thing I haven't seen mentioned yet is the importance of getting proper tax advice on the state level too. While federal rules allow the combination of 121 exclusion and 1031 exchange, some states have different rules or don't recognize one or both of these benefits. For example, in some states you might face state capital gains tax even if you successfully defer federal taxes through the 1031 exchange. And the timing of when you need to file state forms might be different from federal requirements. I learned this the hard way when I did a similar transaction - ended up owing unexpected state taxes even though my federal situation was handled correctly. Make sure to check with a tax professional who knows your state's specific rules, especially if you're buying replacement property in a different state than where you're selling. Also, don't forget about the potential impact on your state tax residency status if you're moving to a different state as part of this transaction!
Same exact situation here - filed 1/31 with TurboTax and got the Credit Karma advance but WMR still shows "processing" π Starting to think the advance actually slows things down somehow? My sister filed regular without any advance and already got her refund last week. This whole PATH Act delay is brutal when you're already stressed about money
This PATH act got me ready to throw hands with the IRS fr fr π
Filed 1/28 with TurboTax, EIC claimed, using Credit Karma for deposit. Transcript updated yesterday showing cycle code 20250310 but still no DDD. Anyone else seeing similar timeline? This wait is killing me but at least we're all suffering together π
Katherine Harris
Has anyone here actually done the math on SEP IRA vs 401k for an S-corp owner? I'm in a similar situation to the original poster and trying to figure out if the switch is worth it.
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Madison Allen
β’For S-corp owners specifically, a 401k often ends up being more advantageous once you have employees. With a 401k, you can make both employer contributions AND employee deferrals (up to $23,000 in 2025 plus catch-up if over 50). With a SEP, you only get the employer contribution side. Plus, the non-discrimination testing with SEPs is more restrictive - whatever percentage you contribute for yourself, you must contribute for all eligible employees. 401ks have more flexibility there with safe harbor options.
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Beatrice Marshall
The transition from SEP IRA to 401k when adding employees is actually pretty common for growing S-corps, so you're definitely on the right track. One thing I'd add to the great advice already given - make sure you coordinate the timing carefully if you're planning to make a final SEP contribution for 2024. Since you can make SEP contributions up until your business tax filing deadline (including extensions), you could potentially make your final 2024 SEP contribution as late as September 2025 if you file an extension. Just make sure this doesn't overlap with when you start your 401k contributions to avoid any confusion. Also, consider whether you want to offer any matching in your new 401k plan. It's a great way to attract and retain employees, and as an S-corp owner, you'll benefit from the match too. The administrative costs are usually worth it once you have multiple employees, especially compared to having to contribute equally for everyone under a SEP.
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