Has anyone dealt with 1099-R forms from multiple years where the Box 5 amounts suddenly changed? My mom's pension had $0 in Box 5 for years then suddenly showed $8,200 this year with no explanation, but the taxable amount barely changed.

I work in retirement plan administration and see this confusion constantly! The key thing to understand is that Box 5 insurance premiums don't always reduce Box 2a because of how qualified plans handle different types of contributions and costs. In your sister's case, that $15,675.50 in Box 5 likely represents premiums for life insurance coverage that was purchased as part of her pension plan. If these premiums were paid with pre-tax dollars from the plan (which is common), then they're already included in the taxable calculation - they don't get subtracted. The small difference between Box 1 ($52,410) and Box 2a ($51,728.80) is probably from a completely different source - maybe after-tax contributions she made to the plan years ago that are now being returned tax-free. I'd strongly recommend having her contact Nationwide directly to request a detailed breakdown of how they calculated Box 2a. They should be able to explain exactly what portion of the distribution represents taxable income vs. return of basis vs. insurance costs. Don't guess on this - pension taxation can be really complex and getting it wrong could trigger an audit or penalties.

Has anyone had experience with California state taxes as an L1 visa holder? I'm in a similar situation but worried about California's high state tax rates. I know federal taxes have these special rules for resident vs nonresident aliens, but does California follow the same rules?

I went through this exact situation two years ago when I moved from the UK on an L1 visa. The key thing to understand is that while you're technically a nonresident alien until you meet the substantial presence test, you can still adjust your W-4 withholding to be more accurate for your expected final tax liability. What I did was calculate my expected tax for the full year assuming I'd make the first-year choice election (which lets you be treated as a resident for the entire tax year). Then I worked backwards to figure out what additional withholding amount to put on my W-4 to get close to that target. This way I wasn't massively overwithholding like the standard nonresident alien rates would cause. The important thing is to be conservative - it's better to slightly overwithhold than to owe penalties for underpayment. I'd recommend doing the calculations for both scenarios (staying nonresident vs making the first-year choice) so you can see the difference and plan accordingly. Your HR department should be fine with a revised W-4 as long as you explain you're anticipating a status change during the year. Also don't forget that your wife will need an ITIN if she doesn't have an SSN but you want to file jointly!

Protip: if ur return has any credits or deductions it takes longer to process. straight w2 only returns are getting processed faster

Filed mine Feb 3rd and got it yesterday! Took about 18 days total. The Oklahoma Tax Commission site was pretty unhelpful with updates but once it switched from "pending" to "processing" it only took 3 more days. Hang in there everyone - seems like they're working through the backlog steadily!

Quick tip about the SEP-IRA contribution deadline - while technically you have until your filing deadline (including extensions), many providers require some processing time. If you plan to file on March 15th without an extension, I'd recommend setting up the SEP-IRA no later than early March to ensure everything processes in time. Also, if you think your income will continue to grow, definitely set up that solo 401k for 2023 before December 31st. With your income level, the solo 401k will likely let you contribute significantly more than a SEP-IRA due to the combined employer/employee contribution structure.

Something else to think about - as an S-corp owner, consider opening a cash balance plan in addition to your solo 401k in future years. If you're looking to really maximize tax-advantaged retirement savings, this might be an option once your business shows consistent profitability. At your income level, you could potentially put away over $100k annually combined between solo 401k and cash balance plan contributions. It's more complex and requires actuarial certification, but the tax savings can be substantial for high-income business owners.

Don't forget another option - if your MAGI is too high for deductible traditional IRA contributions, consider the backdoor Roth IRA strategy. You contribute to a traditional IRA (non-deductible) then immediately convert it to a Roth IRA. As long as you don't have other traditional IRA assets, this can be a clean way to still get money into a Roth IRA even when you're above the direct contribution income limits. Make sure you file Form 8606 to report the non-deductible contribution.

Great question! Let me break this down clearly for you. Since you've maxed out your 401(k), your ability to deduct your own traditional IRA contribution depends on your exact MAGI. For 2024, if you're married filing jointly and covered by a workplace plan, the deduction phases out between $123,000-$143,000. However, your non-working spouse has much more favorable limits! Since only you participate in a workplace plan, your spouse can fully deduct their $7K IRA contribution as long as your joint MAGI stays under $230,000. Even if your MAGI is above $143K (eliminating your deduction), your spouse can still get the full deduction. One important caveat that others haven't mentioned: you need at least $14K in earned income to make both contributions. Your spouse's $2K in capital gains doesn't count as earned income for contribution purposes - only your wages/salary count toward the $14K requirement. And yes, any IRA deductions you qualify for are "above-the-line" deductions that reduce your AGI before applying the standard deduction. So if you can deduct the full $14K, that would be in addition to your ~$29K standard deduction. Given your situation, I'd recommend calculating your exact MAGI first to see where you stand in the phase-out ranges before making the contributions.