Thank you so much for this warning about not rolling it into our own accounts! I honestly might have tried to do that thinking it would simplify things. Do you happen to know if we can just start taking the correct distributions now, or do we need to "catch up" on all the ones we missed over the past years?

You don't need to "catch up" by withdrawing all the missed distributions at once. You should calculate what you should have taken each year, but going forward you just need to start taking the correct annual distributions based on the appropriate life expectancy table. What you DO need to do is file Form 5329 for each year you missed a distribution, request the penalty waiver on each form, and include a letter explaining that you didn't understand the RMD requirements. Then start taking the correct annual distribution this year. Most financial institutions that hold IRAs can help calculate your required distribution amount.

I used H&R Block software (not the in-person service) last year to handle my missed RMDs on an inherited IRA. It worked fine for generating the 5329 forms, but it didn't help with the waiver request letter or calculating what my distributions should have been. I ended up having to research those parts separately.

Thanks for sharing your experience! Sounds like I might need some additional help beyond just the tax software to get the calculations right. I'll look into what supplemental services might help with those calculations while still using the software for the actual filing.

This happened at my company too. HR gave everyone the new forms but provided zero guidance. Half our accounting department had withholding problems. The new form is way more confusing than the old one.

Does FreeTaxUSA import your info from previous years if you're switching from TurboTax? And can it handle self-employment income without charging extra like TurboTax does?

FreeTaxUSA can't directly import your data from TurboTax, but you can upload a PDF of last year's return and it will pull some of the basic info. You'll need to enter some things manually the first year, but after that, it remembers your info for future years. Yes, it handles self-employment income without charging extra! That's actually one of the main reasons I switched. TurboTax wanted to charge me an extra $120 just because I had a small side business, but FreeTaxUSA includes Schedule C in their free version. The only thing they charge for is state filing (about $15) and audit assistance if you want it.

I've used both H&R Block and TurboTax. H&R Block's interface isn't as slick but I actually found it more straightforward. They also have fewer upsells in my experience. Never had any data issues like what you're describing with TurboTax.

Thanks for the heads up about H&R Block. Do you know if there's a way to find CPAs who specialize in retirement accounts specifically? Should I be looking for any particular certifications or experience?

I'd recommend searching for a CPA who specializes in "individual tax planning" or "retirement tax planning" specifically. There's no special certification just for retirement accounts, but you want someone who regularly handles them. When you contact them, ask these specific questions: 1) How many backdoor Roth conversions do you handle annually? 2) Are you familiar with filling out Form 8606 for both non-deductible contributions and Roth conversions? Any CPA who hesitates on those questions probably isn't the right fit. The American Institute of CPAs (AICPA) website has a "Find a CPA" feature that lets you search by specialty, which could be a good starting point.

Exactly this! The IRS systems will assume the entire conversion is taxable if you don't have a properly filed 8606 showing your non-deductible basis. They have no way of knowing you already paid tax on that money otherwise.

That's a really good point I hadn't thought about. In this case, my client hasn't made any 2025 estimated payments yet - they were planning to rely entirely on the credit elect. If we amend now to get most of it refunded, would you recommend they start making quarterly payments right away to cover 2025 tax liability?

Yes, I would definitely recommend they start making quarterly estimated payments immediately. Since they're eliminating most of their credit elect cushion, they'll need to ensure they're meeting safe harbor requirements to avoid underpayment penalties. They should calculate their projected 2025 tax liability and make sure they're paying either 90% of that amount or 100% of their 2024 tax liability (110% if their AGI was over $150,000) through quarterly installments. The next deadline is September 16, 2024, so they still have time to adjust their payment strategy. I usually advise clients in this situation to slightly overpay estimates to provide a buffer, especially if they're close to the threshold where penalties might apply.

Filed one in May for a credit elect change and it took exactly 19 weeks to process. Got the refund direct deposited about a week after that. So roughly 5 months total from submission to money in account. This was a paper-filed amendment though, might be faster if you can e-file.