Is there a deadline for when employers have to fix W-2 errors? My company is notoriously slow with correcting payroll issues and I'm worried if something's wrong with my 401k reporting, they'll take forever to fix it.

Employers are supposed to issue corrected W-2s (W-2c) as soon as they discover errors, but there's no strict deadline specifically for corrections. However, if you find an error, report it to your employer immediately - they should issue a W-2c within a reasonable time. If your company drags their feet, you can actually report the discrepancy directly on your tax return. The IRS has Form 4852 (Substitute for W-2) where you can report what you believe are the correct numbers based on your pay stubs if your employer won't fix their mistake in a timely manner.

Does the employer match count toward that limit? I'm putting in about $20k myself but with my employer's 6% match it would go over $24k.

Would this documentation help reduce any tax liability though? Or is it just to explain the unusual situation if questioned?

It's primarily to explain the unusual situation if questioned during an audit. The documentation itself won't reduce your tax liability, as the property will still be treated as a non-primary residence for capital gains purposes. However, having this documentation ready could prevent potential complications if the IRS questions why you owned a property that wasn't your primary residence but also wasn't generating rental income. Without proper explanation, they might incorrectly assume it was an unreported rental property, which could trigger a more extensive audit.

Good point! In California we have totally different rules for property tax reassessments when property transfers between family members. The fed and state systems barely talk to each other.

I appreciate the tip! Unfortunately I used TurboTax and did it myself online, but I'm still trying to figure out their system to download old returns. Their website navigation is not very intuitive. Do you know if online services like TurboTax have the same 3-year retention policy?

Online services like TurboTax typically store your returns for even longer than 3 years - many keep them for 7+ years. The challenge is usually navigating their interface to find them. For TurboTax specifically, after logging in, click on your name in the top right corner, then "Tax Returns & Documents." From that screen, you should see all your past returns with a "Download/Print PDF" option. If you're still having trouble, their customer support can guide you through it - they're pretty responsive if you use their chat feature.

This is seriously good advice! My son had the same issue with a German university, and when he called them directly, they told him the transcript plus his W-2s would be sufficient. Saved weeks of stress and waiting.

Thanks for this advice! Would regular certified mail be good enough, or should I do certified mail with return receipt? And should my friend expect to wait a long time to get the rebate after filing?

Regular certified mail with tracking is sufficient - you just need proof it was delivered. Return receipt is extra protection but not strictly necessary. Your friend should definitely expect to wait several months for the rebate after filing. Zero-income returns claiming only the recovery rebate credit typically get flagged for manual review, which adds processing time. Current estimates I've seen suggest 3-6 months for these special case paper returns, though it could be shorter or longer depending on the IRS backlog at the time of filing. Make sure your friend keeps a complete copy of everything submitted so they can follow up if needed.

Yes! This happened to my roommate too. It's actually pretty common for zero income returns claiming the rebate. The IRS is super cautious about fraud with these payments. He had to use the ID.me service to verify his identity. Once he did that, the payment was processed in about 4 weeks.

I'm pretty sure my recharacterization was completed before the deadline (did it in mid-April 2024 for the 2023 contribution), but I had already filed my 2023 taxes in February. Does that mean I still need to amend to include the Form 8606, or can I just file the form separately?

You'll need to file an amended return (Form 1040-X) along with the Form 8606 for 2023. Since you already filed your original return without the 8606, you need to formally correct that with an amendment. If you hadn't filed yet when you did the recharacterization, you could have just included the 8606 with your original filing. But since you already filed without it, an amendment is necessary to establish your basis properly.

I used TurboTax last year for my backdoor Roth and had mixed results. It does have a section for Form 8606, but it doesn't specifically prompt you about recharacterizations. I had to know exactly what I was doing and override some of its suggestions.