That's a great suggestion I hadn't thought of! Do you know if these built-in calculators typically handle all the different pre-tax options and show the tax implications clearly? Our HR system is ADP but I haven't fully explored all its features.

Most employer HR systems with these calculators do handle all the pre-tax options specific to your company's benefits package. They're usually more accurate than generic calculators because they're configured with your exact benefit structure. ADP definitely has this feature! Look for something called "Paycheck Modeling" or "Net Pay Calculator" in your ADP portal. It should let you adjust all available pre-tax deductions and show exactly how they affect your take-home pay. If you can't find it, ask your HR department - sometimes these features aren't enabled by default.

I use the TurboTax tool every year after doing my taxes. It's decent but doesn't really show the impact of changing pre-tax deductions in real-time. It's more focused on getting your W-4 withholding right than optimizing across different pre-tax options. I ended up using a combination of that plus a separate calculator for my 401k/HSA decisions.

Thanks for the feedback! You're right that it's more withholding-focused. I just found it useful as one piece of the optimization puzzle. I've been looking for something more comprehensive that shows the trade-offs between different pre-tax options in real-time.

This is a good point, but how do you coordinate this with partners? Do you need to create some kind of formal documentation between you?

Ideally, you should have a written agreement that clearly specifies the nature of your arrangement - whether it's a partnership, a contractor relationship, or something else. Even a simple email thread documenting who's responsible for reporting what can help. For informal arrangements like yours, make sure both parties understand that the theatre company should report the $1,320 as their income, and you should report it as an expense. Keep proof of payment to them (canceled check, transfer receipt, etc.) and any written communications about your profit-sharing arrangement.

I used that for my graphic design side gig and it was pretty good with 1099 income and basic expenses, but I'm not sure about handling complex partnerships or profit-sharing without a formal business structure.

Thank you for explaining this! Does this mean we'd only pay the 6% penalty for one year on his excess amount, and then "absorb" it in the following year by under-contributing? That sounds much simpler than trying to do a late removal now.

Exactly right! You would only pay the 6% penalty for one year on the $3,400 excess in his account (about $204). Then in the following year, if his contribution limit is $6,500, he would only contribute $3,100 to his Roth IRA. This effectively uses $3,400 of that year's contribution limit to "absorb" last year's excess. The key thing is that you need to have contribution eligibility in that following year. If your income exceeds the limits again, this approach wouldn't work since you wouldn't be eligible to make any contributions that could "absorb" the previous excess.

There's a specific formula the IRS provides: Earnings = Excess contribution × (Ending balance - Beginning balance) ÷ Beginning balance So if you contributed $6,000 when your limit was $3,000 (so $3,000 excess), and your account went from $20,000 to $22,000 during that period, the earnings on your excess would be: $3,000 × ($22,000 - $20,000) ÷ $20,000 = $3,000 × $2,000 ÷ $20,000 = $300 You'd need to withdraw $3,300 total ($3,000 excess + $300 earnings).

Quick question - what if someone doesn't receive their 1095-B at all? My mom has Medicaid but never got any form. Does she need to request it or can she still file without it?

She can still file without it. The 1095-B is just proof that she had qualifying health coverage. If she had Medicaid for the year, she doesn't need to do anything special on her tax return regarding health coverage. If she wants a copy for her records, she can contact her state Medicaid office to request one, but it's not necessary for filing her tax return. The IRS already receives this information directly from Medicaid.

TurboTax might ask if you had health insurance coverage during the year, and you'd select "yes" if you had Medicaid (which your 1095-B confirms). But there's no place to enter specific information from the 1095-B form itself. You don't need to enter any numbers from it.

Thank you for these suggestions! I hadn't heard of Form 911 before, but I'll definitely look into it. I'm going to request my complete account transcripts right away. One question - for the "reasonable cause" explanation, should I focus more on my financial hardship or my lack of understanding about the Form 8949? I want to make the strongest case possible.

Focus on both aspects equally, but make sure to emphasize that your misunderstanding was directly related to a new form requirement that had just been introduced. The IRS tends to be more sympathetic when confusion stems from their procedural changes rather than just general tax ignorance. Also document the financial impact this had on you as a low-income person with a new baby. Include specific details about your income at the time ($16K annual) compared to the assessment ($5,800) to illustrate the disproportionate impact. When filing Form 911, be very clear that this situation created economic hardship for you over multiple years as they recaptured your refunds and tax credits that you needed for basic living expenses.

I'm a tax attorney, and while equitable doctrines do exist, they're extremely difficult to successfully apply against the IRS. The Supreme Court has generally held that filing deadlines in tax statutes are jurisdictional, meaning equitable tolling doesn't usually apply. Your best bet is always to find a technical exception within the code itself rather than relying on equitable arguments.

For the original poster, I would focus on three potential avenues: First, examine if any of the refund offsets occurred within the last two years, which might create a separate claim for refund for those specific payments. Second, determine if the IRS made any computational errors in their original assessment (not just the taxpayer's reporting error), which can sometimes extend the limitations period. Third, pursue penalty and interest abatement aggressively through Form 843, as those have the highest likelihood of success based on the circumstances described. While recovering the original tax assessment from 2012 is unlikely, these other approaches might recover a meaningful portion of what was paid.