I'd recommend filing a report with your state's Department of Labor too. If they're reporting wages they didn't pay you, that's a serious issue. The DOL might light a fire under the company to fix this faster than you can on your own.

This is definitely a frustrating situation, but you have several good options to resolve it. Based on what you've described, it sounds like a clear payroll error since you have documentation that you stopped working in November. Here's what I'd recommend doing immediately: 1. **Document everything** - Keep all your communication attempts with the company, your final paystub from November, and any employment termination paperwork you have. 2. **Don't wait indefinitely** - You can file your taxes on time using Form 4852 (Substitute for Form W-2) if the company won't respond. Since you know you didn't work during that period, you can accurately report zero income for those dates. 3. **Try the certified letter approach** mentioned earlier, but also consider escalating to their corporate office if it's a larger company. 4. **Contact the IRS directly** - Call their business and specialty tax line at 800-829-4933 to report the incorrect W-2. They can guide you through the process and may contact the employer on your behalf. The key thing is not to let this delay your tax filing. You have legitimate recourse options, and the IRS deals with these situations regularly. If you end up needing to file an amended return later, that's totally manageable - it's better than missing the deadline while waiting for an unresponsive employer.

Just a heads-up based on personal experience: be VERY careful with your record keeping if you're doing Roth corrections or backdoor contributions. I messed up my basis tracking over multiple years and got hit with a CP2000 notice claiming I owed taxes on conversions that should have been tax-free. It took me months to untangle everything because I didn't have proper documentation for which contributions had been withdrawn as excess vs. which ones were converted properly. Make sure you keep ALL your 5498 and 1099-R forms indefinitely!

Based on your description, it sounds like you handled the excess contribution removal correctly by withdrawing before the filing deadline, which should have avoided the 6% penalty. However, there are a couple of areas that need attention: Your basis calculation is indeed incorrect. Since you withdrew the entire 2023 contribution of $1,500, that amount should NOT be included in your ongoing basis. Your basis should only reflect contributions that remain in the account - so for 2024, it should just be $7,000 (assuming you're eligible for the 2024 contribution). You should have received a 1099-R for the 2024 withdrawal showing the $1,530 distribution. The $1,500 principal portion isn't taxable since it was a return of excess contributions, but the $30 in earnings should be reported as taxable income on your 2024 return. If you're under 59½, those earnings are also subject to the 10% early withdrawal penalty. Make sure your IRA provider coded the 1099-R correctly - it should show code P or JP in box 7 to indicate "return of excess contributions." This helps the IRS understand the nature of the distribution. For 2024, double-check that your income still qualifies you for the $7,000 Roth contribution. If you're over the limit again, you'll want to address this before the filing deadline to avoid repeating the same issue. You likely don't need to amend your 2023 return if you properly reported the excess on Form 5329, but you should verify that your 2024 return correctly reports the earnings portion of the withdrawal as taxable income.

As someone who went through this exact situation last year, I want to share what worked for me. I was overthinking it initially, but here's the simple approach I settled on: I tracked my phone usage for just one typical work week - Monday through Sunday. Each evening, I spent 2 minutes estimating what percentage of that day's phone time was business-related. I included calls, texts, emails, GPS for business travel, and any work-related app usage. My daily percentages ranged from about 20% (weekend days) to 65% (busy workdays), and when I averaged it out, I got 42%. I decided to round down to 40% to be conservative, and that's what I've been claiming. The key insight for me was realizing that I don't need scientific precision - I just need a reasonable method I can explain. I keep a simple note in my tax folder that says "Phone deduction: 40% based on one-week usage tracking in March 2024, averaged 42% but rounded down to be conservative." This approach gave me confidence in my deduction without making it a huge project. The one week of tracking was enough to establish a pattern, and being slightly conservative means I'm not worried about defending it if questioned.

I've been handling this issue for my freelance graphic design business, and I found a middle-ground approach that works well. Instead of detailed daily tracking, I used my phone's built-in screen time analytics to get objective data about my usage patterns. Most smartphones show weekly breakdowns of app usage time. I looked at my email apps, work messaging (Slack, Teams), business-related browsing, and calling apps during typical work weeks versus personal time. This gave me hard data showing roughly 55% of my phone time was work-related. What I really like about this method is that it's based on actual phone data rather than my potentially biased estimates of usage. The phone is already tracking everything automatically, so it's just a matter of categorizing the apps as business vs personal and doing some simple math. I've been claiming 50% (rounded down from my 55% calculation) for two years now and feel very confident about it. The documentation is just screenshots of my screen time analytics with my calculations, plus a brief note explaining my methodology. Takes maybe 15 minutes once a year to update, and it's all based on objective data the phone collected automatically.

Has anyone had success using the free file fillable forms on the IRS website for reporting PayPal income? I'm trying to avoid paying for tax software but I'm worried I'll miss something important.

I went through this exact same situation last year! You definitely need to report that $850 even without a 1099. Here's what I learned: First, download your complete PayPal transaction history for the year - you can get this from your account settings. This will be your documentation in case the IRS ever asks for proof. You'll report this on Schedule C as self-employment income. Put your total sales on Line 1 (gross receipts), then deduct any legitimate business expenses like materials, shipping supplies, PayPal fees, etc. The net profit flows to your 1040 and you'll also need Schedule SE for self-employment tax if your net earnings are over $400. Keep detailed records of everything - the IRS requires you to report all income regardless of whether you get tax forms. PayPal's 1099-K thresholds have changed over the years, but that doesn't affect your obligation to report what you earned. One tip: separate your business transactions from personal ones going forward. It makes tracking so much easier for next year's taxes!

Does anyone have a recommendation for a free tax filing service that handles 1099-NEC and Schedule C well? I'm in basically the same situation as OP with a small amount of freelance income.

Just wanted to jump in as someone who went through this exact situation a couple years ago! You absolutely need to file because of the self-employment rules everyone mentioned - that $400 threshold is the key thing here, not the regular filing requirement. One thing I wish someone had told me when I was in your shoes: keep really good records of ANY expenses related to your design work. Software subscriptions, computer equipment, even a portion of your internet bill if you worked from home. These can all be legitimate business deductions that will reduce your self-employment tax. Also, don't stress too much about doing it "perfectly" on your first time filing. The IRS is actually pretty reasonable if you make an honest mistake and need to file an amended return later. The important thing is just getting it filed since you're over that $400 threshold. Good luck with your first tax return! It's not as scary as it seems once you get started.