Something doesn't add up with your numbers. If the missed RMD was $5,695, the maximum excise tax penalty should be 50% of that, which is $2,847.50. But the IRS is asking for the full $5,695 plus penalties? Did you include the distribution on his tax return for 2022 (even though it was taken in 2023)? If not, the IRS might be considering this unreported income, which would explain why they're including the full amount as a tax increase. Also, I think you misunderstood what Form 5329 does. Lines 53-55 being zero means you calculated no penalty due (requesting a waiver). But you still have to report and pay tax on the RMD amount itself once it's distributed.

Just to add another perspective - my father missed his RMD two years ago, and we went through this same process. We had to: 1. Take the missed distribution immediately 2. File Form 5329 requesting a waiver of the 50% penalty 3. Include a letter explaining WHY it was missed (in our case, health issues) 4. File an amended return to include the missed RMD as income in the correct year The IRS initially sent a similar notice to what you received, but after we responded with a detailed explanation, they waived most of the penalties. We still had to pay the basic income tax on the distribution amount plus some interest, but they removed the failure to file/pay penalties. The key was providing a legitimate reason why it was missed and showing we corrected it immediately upon discovery.

Hey, quick question - if I have ADRs from multiple countries, do I need to separate the Foreign Qualified Dividends by country? My broker's statement shows foreign tax paid from 3 different countries.

This is a great thread with lots of helpful info! I just wanted to add one more practical tip for anyone dealing with this situation - don't forget to check if your ADR company provides annual tax information packets. Many foreign companies that issue ADRs will send out detailed tax information documents to ADR holders around tax season that specifically break down qualified vs non-qualified dividends and foreign tax withholding by country. These are often posted on the company's investor relations website under "Tax Information" or "ADR Tax Documents." I found this out the hard way after spending hours trying to get info from my broker, only to discover the company had already published everything I needed in a nice PDF document. Some companies even provide pre-filled forms or worksheets that make the whole process much easier. Worth checking before going through all the hassle with brokers!

Don't make this more complicated than it needs to be! Here's the simple version: 1) If anyone in the household has a regular medical FSA, nobody in the household can contribute to an HSA 2) If the FSA is limited to just dental/vision, then HSA is still allowed 3) If the FSA is "post-deductible" (only kicks in after meeting deductible), HSA is still allowed I went through this whole mess last year. Ended up having my wife decline her FSA so I could max out my HSA since the HSA has better long-term benefits (investment options + no "use it or lose it" rule).

Just wanted to add another perspective for folks dealing with this FSA/HSA household issue - timing matters a lot for your decision! If you're currently in a situation where your spouse has a regular FSA that's disqualifying you from HSA contributions, don't forget that you can make changes during your spouse's next open enrollment period. Most companies have open enrollment in the fall for the following year's benefits. Also worth noting: if your spouse has a qualifying life event (like job change, birth of child, etc.), they might be able to switch from a regular FSA to a limited purpose FSA mid-year, which could open up HSA eligibility for you sooner than waiting for the next enrollment period. The key is planning ahead since these accounts have different contribution deadlines. HSA contributions can be made up until the tax filing deadline (usually April 15th), but FSA elections are typically locked in during open enrollment and can't be changed without a qualifying event. One strategy that worked for my family: we calculated the total tax savings from both scenarios (spouse FSA + my regular health plan vs. spouse limited FSA + my HSA) and found the HSA route saved us about $800 more per year, especially since we can invest HSA funds for long-term growth.

I think everyone is overlooking an important aspect of multi-state partnership reporting - the withholding requirements. Many states require partnerships to withhold taxes for nonresident partners, regardless of whether you ultimately need to file a return there. Check your K-1s carefully - they should indicate if any state taxes were withheld on your behalf. If taxes were withheld, you'll likely need to file a nonresident return in that state, even if you otherwise wouldn't have a filing requirement, just to get a refund of over-withheld amounts. This happened to me with a partnership that withheld Oregon state taxes at their highest marginal rate, but after applying deductions and credits, my actual Oregon liability was much lower. I had to file an Oregon nonresident return to get back about $2,300 in over-withheld taxes.

This is a really comprehensive discussion! I wanted to add one more consideration that might apply to your situation - apportionment factors for multi-state partnerships. Since your Colorado partnership is investing in real estate across multiple states, you'll want to understand how each state apportions partnership income. Some states use a single sales factor, others use three-factor formulas (property, payroll, sales), and this can affect how much of the partnership's income is actually subject to tax in each state. For real estate partnerships specifically, most states will source the income to where the property is physically located. But if the Colorado partnership is also engaged in management activities (property management, development decisions, etc.), some of that income might be sourced to Colorado based on where those business activities occur. I'd recommend asking your partnership for a breakdown of how they've allocated income by state on their partnership returns. This information should help you understand not just which states might require filings, but also how much income is actually attributable to each state. Sometimes the state-by-state breakdown is much different than what you might assume just from looking at where the underlying properties are located.

Not directly related to your immediate question but since you're just starting a new job after a gap: remember that your 2024 withholding might seem wrong all year because the system assumes you've been making that $22/hour since January. If you've been unemployed most of the year, you might end up having too MUCH withheld relative to what you'll actually owe. Just something to keep in mind when you're looking at your paychecks after fixing the current $0 withholding issue.

This is a really common issue with the redesigned W4! The good news is that it's likely fixable. Since you only filled out steps 1 and 5, the payroll system is making assumptions about your tax situation that might not be accurate for your specific pay schedule and start date. Here's what I'd recommend: Wait for your next full two-week paycheck to see if withholding appears once the system has better data about your actual earning pattern. If there's still no FITW on that check, you'll need to submit a new W4 with an additional withholding amount in Step 4(c). A quick calculation: At $22/hour for 40 hours/week, you're looking at about $45,760 annually. Even with the standard deduction, you'd owe roughly $3,900-4,200 in federal taxes for the year. If you end up needing to add extra withholding, putting around $80-85 per paycheck in Step 4(c) should get you close to the right amount. Don't panic though - catching this early means you have plenty of time to correct it before tax season!