I've never heard of "true-up" contributions. Would that explain why ADP insists the W-2 box 12 amount is "meaningless" compared to when contributions actually hit my account?

Yes, that might explain their strange language about the W-2 being "meaningless." With true-up contributions, the employer makes additional deposits to your 401(k) to ensure you receive the full match you're entitled to, even if your own contributions were front-loaded during the year. These adjustments typically happen in January for the previous year, which aligns with what they told you about January 2024 crediting. However, for contribution limit purposes, the IRS still looks at the tax year shown on your W-2. I'd suggest specifically asking ADP if your final "contribution" was actually a true-up adjustment rather than a regular paycheck deduction.

The limit for 2023 was $22,500, but don't forget they might have both traditional and Roth 401k contributions combined in that box, or maybe there's employer matching included? Not all money in box 12 counts toward the employee limit.

Thanks for this info! Did you end up filing Form 3520 for your TFSA, or did you go with just FBAR and 8938? I'm trying to understand what the majority of people in this situation are doing.

I initially filed Form 3520 for my TFSA for two years, following advice from my first cross-border tax specialist. It was a paperwork headache and added considerable complexity to my returns. After consulting with another tax professional who specializes specifically in US-Canada issues, I switched to reporting my TFSA on FBAR and Form 8938 only, with a note explaining the account's status. This professional provided me with several IRS memorandums and case examples supporting the position that most standard TFSAs don't meet the technical definition of foreign trusts requiring 3520 filing.

This is so frustrating! So even if I properly report the TFSA now, any interest, dividends, or capital gains inside it are still taxable for US purposes? That completely defeats the whole purpose of having a TFSA.

That's exactly right. Your personal name goes on line 1, and your registered DBA "Johnson Photography" goes on line 2 as the business name. Make sure you're still checking the "Individual/sole proprietor" box since a DBA isn't a separate legal entity. This way, when your clients issue 1099s, they'll correctly identify both you (the taxpayer) and your business name, which helps avoid confusion when the IRS is matching documents to your tax return.

So if I do have a registered DBA (I registered "Johnson Photography" with my county), then I would put my personal name on line 1

Couldn't you just file a Schedule C with "Designs by Mike" as your business name on your tax return to match the 1099?

Thanks for bringing this up! Would I qualify for an Offer in Compromise with only $2,400 owed? I always thought that was for people with massive tax debts. My financial situation isn't great, but I do have steady income - just not enough extra to pay this all at once.

There's no minimum amount required for an Offer in Compromise, but with only $2,400 owed, it might not be your best option. The application fee is $205 unless you qualify for low-income certification, and the process can take 6-24 months with no guarantee of acceptance. In your situation with steady income, a long-term payment plan is probably more practical. The IRS will likely approve a 72-month plan with payments around $40-50 per month on your balance. That's much easier to manage and doesn't require the extensive financial documentation an OIC needs.

This is so important. My roommate ignored a $1,500 tax bill for almost 2 years, and by the time they finally dealt with it, it had grown to over $2,800 with penalties and interest. The IRS even started garnishing their wages which was way worse than just setting up a payment plan would have been.

Thanks for mentioning this! I've already gotten my Michigan driver's license, registered to vote, and changed my car registration. I kept my California bank account open though since they have locations in Michigan too. Should I still consider closing it to be safe?

You don't necessarily need to close the California bank account, but definitely make sure you've changed the primary address on the account to your Michigan address. Having a CA bank account with a CA address could be one factor they look at. The most important things are already done - driver's license, voter registration, and vehicle registration show your intent to permanently reside in Michigan. Also make sure your employer has your Michigan address for your W-2, and that any investment accounts are updated with your new address.

TurboTax Premium worked great for my CA to WA move. It walked me through allocating income between states and explained which income belongs where. It costs more than the basic version but worth it for multi-state situations.