This is really helpful! We do track who's playing but never thought to separate member vs. guest gaming income. Do we need to track that separately on our books? And does it matter if the guests are paying the members who brought them, or paying directly?

Yes, you should definitely track member vs. non-member income separately in your books. This makes it much easier if you ever get audited, and helps with completing your 990 accurately. The IRS specifically looks at this breakdown for veterans' organizations. For your second question, it matters who's actually putting the money in. If the guests are paying directly for their own gaming activities, that's considered non-member income. If members are paying on behalf of their guests, that could be considered member income. The safest approach is to consider all guest payments as non-member income and track it that way. Better to be conservative with this.

Yes, we file 990-T for a portion of our gaming income. You can deduct directly connected expenses - so for pull tabs, that includes the cost of the pull tabs themselves, any specific equipment for them, allocated space costs for the area where they're sold, and the portion of that paid employee's time spent on pull tabs. Just make sure you have a reasonable allocation method that you apply consistently.

Thanks for explaining! That makes sense about the direct expenses. Do we need to keep separate physical inventories of the pull tabs as well or just track it in our accounting system?

Thanks for this suggestion! I didn't even know I could request a transcript. Will this show pending actions on my account too, like if they're actually processing a lien? And how far back does it go - will it show the original CP2000 issue from 2017?

Yes, the account transcript will show pretty much everything related to that tax year, including the CP2000 adjustment, any penalties or interest assessed, and your payment. It should also show any collection actions being considered or initiated. The transcript goes back the full timeline for that specific tax year, so your 2017 transcript will show everything from when you first filed that return up through current actions. When you request it, make sure you're getting the "account transcript" specifically (not just the "tax return transcript") and for tax year 2017. This is the most comprehensive record of all transactions and will be your best evidence if you need to dispute anything.

I did this last year for a payment issue. You need to schedule an appointment first (can't just walk in) by calling 844-545-5640. They were able to pull up my account and confirm my payment had been received. Took about 2 weeks to get an appointment but the actual visit was only about 30 minutes.

Thanks for the tip about needing an appointment. Did they actually resolve your issue during the visit or did you still have to wait for processing? I'll try calling that number tomorrow to schedule something.

Thanks for breaking it down! So if I understand correctly, my $86k W2 would allow for: $23k employee contribution, then 25% of $86k = $21.5k employer contribution, which leaves $24.5k that I could contribute as after-tax dollars for immediate Roth conversion. So I could do the full MBDR, just not the full $69k as after-tax contributions. Is that right?

You've got it exactly right. With your $86k W2 salary, you can make the $23k employee deferral and about $21.5k as the employer contribution. That leaves approximately $24.5k that you can contribute as after-tax dollars for the Mega Backdoor Roth conversion. So while you can reach the full $69k overall limit, only a portion of that would be after-tax contributions eligible for the Roth conversion. This is still a fantastic strategy for building tax-free growth in your retirement savings, and your income level is absolutely sufficient to take advantage of it.

Did you have any issues with timing? I'm worried about setting up the solo 401k, making contributions, AND doing the Roth conversion all before the tax year ends. How tight is that timeline?

This is great info! Does anyone know if there's a way to tell from the K-1 whether the trust is a grantor trust? I think mine might be because my grandfather is still alive and the letter mentions something about him being the "grantor" but I'm not sure if that changes how I report it.

A grantor trust is actually quite different for tax purposes. If you see your grandfather referred to as the "grantor" and he's still alive, it might indeed be a grantor trust. In that case, the income is actually taxable to the grantor (your grandfather), not to you as the beneficiary. However, some trusts can be partially grantor trusts. The key indicator on your K-1 would be in the top section - it should specifically identify if it's a grantor type trust by checking a box. If you received a K-1 with your name as the beneficiary, you likely still need to report something, but possibly not all items. The cover letter should clarify this, as grantor trusts have special reporting requirements.

Ugh that's what I was afraid of. Do you know if there's a minimum amount that requires amending? Mine is only showing like $800 in dividend income. Would the IRS even notice if I don't bother with an amendment for such a small amount?

Thanks everyone for all the helpful answers! I'm going to make sure I report everything correctly from my K-1. Seems like the consensus is that I need to include the information on my tax return but don't physically send in the K-1 form itself. I'll keep the original documents with my tax records just in case. I'll probably check out that tax document analyzer tool too since this is my first time dealing with trust income. Better to understand what I'm looking at rather than just blindly entering numbers into tax software!

Can you explain more about how to calculate which is better? I paid about $12,000 in tuition for my master's degree in 2019, and I'm trying to figure out if I should amend.

Sure! The calculation depends on your tax situation and what education expenses you had. For a master's degree, you wouldn't qualify for the American Opportunity Credit (it's only for undergrad), so you're choosing between the Lifetime Learning Credit and the tuition deduction. With $12,000 in qualified expenses, you could claim a Lifetime Learning Credit of 20% of that amount, up to the maximum of $2,000. So your LLC would likely be the full $2,000. For the tuition deduction, you could deduct up to $4,000, but the tax savings depend on your tax bracket. If you're in the 22% bracket, that's a savings of $880. In the 24% bracket, it's $960. So in your specific case with graduate school expenses, the Lifetime Learning Credit would likely be more beneficial than the tuition deduction.

You need to file separate 1040-X forms for each tax year. I did this last month for both 2018 and 2019. Make sure to mail them in separate envelopes too, as they go to different processing centers depending on the tax year.