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Has anyone used TurboTax to handle this excess contribution situation? I'm trying to figure out if it walks you through this correctly or if I need something more specialized.
I used TurboTax last year when I had an excess contribution issue (put in too much because I miscalculated my income). It did have a section for reporting the return of excess contributions, but I found it a bit confusing. I ended up calling their support line for help with that specific section. Might be worth paying for the version with live support if you're dealing with this.
Thanks for sharing your experience. I've been debating whether to upgrade to the version with live support - sounds like it might be worth it for this situation. Did you have to file any additional forms or was it all handled through the regular TurboTax interface?
I'm dealing with a similar situation right now - PhD student who made excess Roth IRA contributions because I didn't realize my research fellowship didn't count as earned income. What really helped me was getting organized with all my tax documents first. Make sure your roommate gathers her 1098-T from the university, any 1099-MISC forms for the stipend, and her W-2 from the TA position that was mentioned. Having all these documents in one place makes it much easier to calculate exactly how much she can legitimately contribute based on her actual earned income. I'd also suggest she call her IRA provider (Fidelity, Vanguard, etc.) directly to ask about their process for "return of excess contributions." Each company has slightly different procedures and timelines, so getting the specifics from them upfront can save a lot of back-and-forth later. Most of them are pretty used to handling this situation with grad students!
Has anyone used Cash App taxes (formerly Credit Karma Tax)? I heard its completely free for both federal and state filing, even with 1099 income.
I used Cash App Taxes last year for my W-2 and small 1099 income. It's truly free for everything which is nice, but I found the interface for entering business expenses a bit confusing. It also doesn't have the option to import expenses from tracking apps which was annoying. If your situation is relatively simple, it works fine. But if you have lots of business expenses or need good guidance on deductions, you might want something more robust.
I've been using TurboTax Self-Employed for the past two years with a similar setup - W-2 from my main job plus 1099-NEC income from freelance web design work. While it's definitely more expensive than the options others have mentioned (around $120 for federal + state), the guidance for business deductions is really comprehensive. What I like most is how it walks you through every possible deduction category and asks specific questions about your business. For coaching, it would prompt you about things like continuing education, professional memberships, travel expenses, and equipment purchases. The mileage tracker integration with the mobile app is also pretty seamless - you can categorize trips as business/personal right from your phone. That said, after reading about some of these cheaper alternatives, I might try FreeTaxUSA next year to see if I can get the same results for less money. The key thing is making sure whatever you use properly handles Schedule C for your coaching income so you get the full tax benefit on those business expenses.
I went through this EXACT situation last month. After days of stress and trying to decipher IRS codes, I used taxr.ai which analyzed my transcript and showed me exactly what was happening. Turns out my 570 code was just because they were verifying my identity after I moved. The tool gave me a predicted refund date that was spot on - came within 2 days of what it predicted. Highly recommend it if you're stuck in 570 limbo. https://taxr.ai
I'm dealing with the exact same thing right now! Got a 570 code on my transcript with no date, just says "should update 03/17/25". Filed in early February and expected around $3,800 back. It's so frustrating not knowing what's going on or how long this will take. I called the IRS twice but couldn't get through after waiting over an hour each time. Really hoping it resolves soon because I have some unexpected car repairs I need to pay for. Thanks for posting this - at least I know I'm not alone!
You're definitely not alone! I'm going through the same thing and it's so stressful when you need the money for unexpected expenses. The waiting is the worst part because you have no idea what's causing the hold or how long it will take. From what I've been reading in these comments, it sounds like the 570 code can be caused by all sorts of things - identity verification, income matching, credit verification, etc. Have you checked your mail to see if they sent you any letters requesting documentation? Some people mentioned that sometimes takes a week or two to arrive after the code appears.
I'm seeing the exact same thing! Filed on 1/27 and got my acceptance email the next day, but my transcript shows that weird Feb 17, 2025 date with everything blank. Based on what everyone's saying here, sounds like it's just a system placeholder while they process everything. Definitely going to check out taxr.ai since so many people are recommending it - would be nice to get some actual insight into what's happening behind the scenes instead of just guessing š¤
Same exact situation here! Filed 1/28 and got acceptance email but transcript shows that Feb 17 2025 date with everything blank. Really relieved to see I'm not alone in this - was starting to think something went wrong with my filing. Definitely gonna try taxr.ai too since everyone seems to be getting good results from it. Thanks for sharing your experience!
Filed on 1/25 and seeing the exact same thing - blank transcript with Feb 17, 2025 processing date but got my acceptance email right away. After reading through all these comments I'm definitely going to try taxr.ai since it seems like everyone who used it got clear answers about what's actually happening with their returns. The IRS really needs to make these transcripts more user-friendly instead of leaving us all guessing what these cryptic codes and placeholder dates mean! At least now I know I'm not the only one dealing with this weirdness š
QuantumQuasar
Quick question about Form 8606 - do I need to attach any proof of my contribution history when I file? I'm in a similar situation with Roth contribution withdrawals and wondering how the IRS verifies I'm only withdrawing contributions.
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Zoe Papanikolaou
ā¢No, you don't attach proof with your tax return, but you absolutely need to keep records for yourself. The IRS gets reporting from your IRA custodian through Form 5498 (for contributions) and 1099-R (for distributions), but they don't show whether distributions are from contributions or earnings. Keep all your IRA statements and contribution records!
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Chris King
Just want to confirm what others have said - yes, you can absolutely leave Parts 1 and 2 blank on Form 8606 when you're only withdrawing Roth IRA contributions. I had the exact same situation last year and was worried about leaving sections blank, but my CPA assured me it was correct. Part 1 is specifically for nondeductible traditional IRA contributions, and Part 2 is for Roth conversions. Since you're dealing with direct Roth contribution withdrawals, only Part 3 applies to your situation. The key thing is making sure you accurately complete Part 3, especially line 19 where you report your total contributions (basis) in all your Roth IRAs. One tip: if you've made contributions to multiple Roth IRA accounts over the years, you need to aggregate all of them when calculating your basis - it's not done on an account-by-account basis. Keep good records of all your contribution amounts and dates in case the IRS ever has questions down the road.
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