Thanks for pointing that out! It's a Traditional IRA, so I'll definitely need to plan for the tax impact of withdrawals. Do you have any suggestions for minimizing the tax hit over the 10-year period?

Since it's a Traditional IRA, you'll want to be strategic about your withdrawals. Consider taking larger distributions in years when you might have lower income from other sources, which could keep you in a lower tax bracket overall. If you have years where you expect higher income (bonuses, other investment gains, etc.), you might take smaller distributions or skip withdrawals entirely during those years. Many people also coordinate their withdrawals with charitable donations that can offset some of the tax impact. Just make sure you're on track to empty the account by the end of the 10-year period.

How would you even check if the RMD was taken for the year they died? The statements I got don't make this clear at all.

12 What about 401k contributions? My last paystub shows my total contributions for the year, but does the W2 report this differently? Really confused about where this should appear.

7 Your 401k contributions are handled in a specific way on the W2. Your paystub will show your contributions, but on the W2, your Box 1 wages (taxable federal wages) will already be reduced by your pre-tax 401k contributions. The actual 401k contribution amount will typically appear in Box 12 with code D. So when comparing your paystub to your W2, remember that your W2 Box 1 should be lower than your gross wages by at least the amount of your 401k contributions (plus any other pre-tax deductions like health insurance).

15 Definitely wait for your official W2 to use the import feature. I tried entering from my paystub last year and ended up having to amend my return because of some differences with taxable benefits that weren't on my paystub. The import feature is super convenient but only works with the actual W2.

That's a good point! Do you know if there's a resource where I can look up which countries have tax treaties with the US? Most of my artists are from Japan, South Korea, and a few from the UK.

The IRS has a complete list of tax treaties on their website. Japan, South Korea, and the UK all have tax treaties with the US, which is good news for you! For these countries, you still need the W-8BEN, but the artists might qualify for reduced withholding rates or exemptions depending on the specific treaty. This is another reason to make sure you get those forms completed properly - they allow the artists to claim treaty benefits if applicable.

What happened with the CP2000? Did you have to pay penalties or just provide the documentation after the fact?

Thanks for bringing up the safe harbor rule - that's really helpful! If my 2024 tax is $43.4k, and I need to meet 110% of that ($47.74k), but I want to owe $8k on a projected $48k tax liability, does that mean I should have approximately $40k withheld throughout the year? Or am I missing something in the calculation?

Your calculation is correct. If your expected 2025 tax liability is $48k and you want to owe $8k at filing time, you'd aim for $40k in withholding throughout the year. The safe harbor rule is just to avoid penalties. Since $40k is less than the safe harbor amount of $47.74k (110% of your 2024 liability), you need to make sure you hit at least $47.74k through a combination of withholding and estimated payments to avoid penalties. So you could do $40k in withholding and then make an estimated payment of $7.74k in Q4 to satisfy the safe harbor while still owing about $8k when you file.

It's actually a valid strategy for credit card churning. If you put an $8k tax payment on a new credit card, you can often meet the spending requirement for a big sign-up bonus. Some cards offer $750-1000 in bonuses for spending $5-8k in the first few months. Plus you get the regular points. As long as you meet the safe harbor rules (withhold 110% of previous year's tax if your income is over $150k), you won't owe penalties. And there's no interest if you pay by the filing deadline. It's totally legal - just a way to get value from money you'd have to pay anyway.

Does having a written loan contract automatically prove it wasn't a gift? Or does the IRS look for other evidence too? Like what if the friend never made any payments at all?

A written loan contract is definitely helpful but doesn't automatically prove it wasn't a gift. The IRS looks at the entire situation. They consider factors like: Was there a reasonable expectation of repayment? Did you charge interest? Were there regular payment schedules? Did you make efforts to collect when payments weren't made? If your friend never made any payments at all, that might raise more red flags with the IRS. However, if you can show you took reasonable steps to collect (demand letters, texts/emails requesting payment, etc.), that helps demonstrate you genuinely intended it as a loan. Documentation is key - the more evidence you have showing you treated this as a serious financial transaction, the stronger your case.

Did you have to provide all that documentation when you filed or just keep it in case of an audit? My tax software doesn't seem to have any place to upload proof.