Thanks for mentioning this! I'll double check my EFTPS payments right away. Did you have to do anything special to get them to reallocate the payments to the correct years?

You'll need to call the IRS Business Tax line and specifically request a payment transfer. Have your EFTPS confirmation numbers ready along with the dates of the payments and the tax periods they should be applied to. I found it helpful to prepare a simple spreadsheet showing the payment date, amount, confirmation number, and which tax period each payment should apply to. The agent I spoke with appreciated having all the information organized, and it made the process much smoother.

What's the best way to word a reasonable cause request? My situation was similar but I'm not eligible for first time abatement.

Thank you for the specific steps! This makes a lot of sense. I checked my tax software again and I think I discovered the issue - there's a specific question about "Do you qualify to deduct your IRA contributions?" that I must have answered incorrectly. Previous years I knew to say "No" but this year with the job change and severance, I might have clicked "Yes" by mistake. I'll try redoing those steps in the correct order. Would it also make sense to just delete all my IRA entries and start fresh with these steps in mind?

Yes, I'd recommend deleting all the IRA-related entries and starting fresh. That's the cleanest approach. Some tax software doesn't handle corrections well when it comes to the 8606 form. When you restart, just follow those steps in order. The key is definitely that "Do you qualify to deduct" question - that's the exact one that determines how the software handles everything downstream. Always answer "No" for a backdoor Roth strategy since the whole point is you're over the income limits for deductible contributions. And don't worry about the severance - it's just regular income. It doesn't change how backdoor Roth contributions work. The W-2 Box 13 check is typically for retirement plan participation at that employer, which is separate from your individual IRA strategy.

I haven't heard about increased scrutiny, but I can tell you that reporting Backdoor Roth incorrectly is definitely a red flag. When your 1099-R shows a distribution (the conversion) but there's no corresponding basis tracking on Form 8606, it creates a mismatch that their systems can easily detect.

Did you contact TurboTax customer support about it? I wonder if they even know their system is doing this to people and causing anxiety.

I did try reaching out to their customer service about it. Got a generic response saying "refund status is provided by the IRS and we recommend checking the IRS website for the most accurate information." Pretty much confirmed they know their tracker has issues but don't really do anything to fix it or warn users. The representative didn't seem surprised at all when I mentioned the status randomly changing, so I'm guessing they get these complaints all the time during tax season.

Does this happen with other tax prep services too or just TurboTax? I've been using H&R Block and wondering if I should expect the same issues.

This is so helpful! Quick question - what if the pay schedules are different? I teach at one college that pays monthly and another that pays biweekly in the same system. Does that mess up the withholding calculations?

Different pay schedules shouldn't mess up your annual withholding in the end, but it can cause some variation in how much is taken from each paycheck. The withholding system is designed to estimate your annual tax based on the frequency of your pay periods. When you have different schedules, each payroll system is making its own calculation based on that specific payment. The good news is that it all reconciles at the end of the year on your W2. If you want your withholding to be more consistent, you can use the "extra withholding" line on your W4 to specify an additional amount to withhold from one of your paychecks to make up any difference.

Yes, you absolutely should be checking the multiple employers box! Since you're getting two separate W2s from different university systems, those are definitely separate employers with different EINs (Employer Identification Numbers).

Do you happen to know where in the tax forms you claim the treaty benefits? I've been looking through the 1040 instructions and I'm totally lost.

You'll need to attach Form 8833 (Treaty-Based Return Position Disclosure) to your tax return if you're claiming treaty benefits. On the form, you'll need to cite the specific treaty article that applies to your situation. For retirement accounts specifically, you'll report the income normally on your return, but then identify the applicable treaty article that modifies how it's taxed. The exact location depends on what type of retirement account it was - for example, 401(k) distributions typically go on line 5 of Form 1040, but you'd need to include Form 8833 explaining why the treaty reduces your tax liability.

From what I understand, the 10% early withdrawal penalty is part of US domestic tax law and applies to US residents/citizens. If you're being treated as a nonresident (getting 1042-S), you're generally subject to flat withholding under Chapter 3 rules, not the additional penalty. But don't take my word for it - check with a tax pro.

Thanks for the insight! I did some more research and it looks like you're right - as a nonresident, I'm generally subject to the flat 30% withholding (or lower treaty rate) but not the additional 10% early withdrawal penalty. This is a huge relief since that would have been another $5,400 on my distribution.