Do other countries handle this differently? I'm curious if this is just a US thing or if most tax systems have something similar.

Great question! Many countries actually do handle this quite differently. Canada, for example, treats death as a "deemed disposition" - essentially as if the deceased had sold all their assets at fair market value right before death, triggering capital gains tax at that point. The heirs then receive the assets with a basis equal to that fair market value. Australia, the UK, and Germany have various forms of inheritance or estate taxes but generally don't have the pure step-up in basis that the US offers. The US system is relatively unique in how completely it wipes out unrealized gains at death.

Last I heard, they were considering limiting it rather than eliminating it entirely. Something like the first $1-2 million in gains would still get stepped-up, but anything above that would carry over the original basis. Hasn't passed but keeps coming up in tax reform discussions.

Thanks for the insider perspective! Quick question - since I already paid and they filed my return, is there any way to still get an advance elsewhere or am I stuck waiting for the normal refund now? My emergency isn't going to wait 3 weeks unfortunately.

Unfortunately, once your return is filed, you can't get an advance from another company. The advance loans are tied to the preparation process, and you can only file once. Your best option now is to track your refund closely using the IRS "Where's My Refund" tool and consider other short-term options for your emergency. If you filed electronically with direct deposit, many refunds are coming through faster than the 21-day estimate this year - I've seen some clients get theirs in 10-14 days. Much better than payday loans or credit card advances, which have even worse terms than refund advances.

The IRS is running about on schedule this year for most simple returns, but there are definitely delays for returns with certain credits like EITC or Additional Child Tax Credit. Those are automatically held until mid-February by law. Returns with inconsistencies, verification flags, or identity theft markers also get delayed for manual review. If you're hitting the 21-day mark with no updates, it might be worth contacting the IRS directly to see if there's an issue they're not showing on the tracker.

What kind of documentation should I keep? I have confirmation emails from my brokerage showing the contributions, and I have last year's tax returns. Is that enough?

Confirmation emails are a good start, but you really want your account statements showing the contributions. Keep your Form 5498s that show IRA contributions for each year - these are usually sent out in May for the previous tax year. Your tax returns are crucial too, especially if you filed Form 8606 with them. If you didn't file 8606 forms for those non-deductible contributions, you should file amended returns to include them. Without the 8606 forms establishing your basis, it becomes much harder to prove which portions were already taxed.

I used TurboTax last year for my backdoor Roth and it worked fine. The interview questions specifically asked about non-deductible contributions and IRA conversions. Just make sure you answer the questions about having a basis in your IRAs correctly. The one tricky part was making sure I entered the 1099-R information exactly as it appeared on the form.

Do they send the recipient copies too or do I have to do that part myself? And roughly how much do they charge per form?

They send the forms electronically to the IRS, but they give you PDFs of the recipient copies that you need to distribute yourself. You can email these PDFs or print and mail them. Their pricing changes a bit each year, but it's usually around $3-5 per form depending on how many you're filing. Definitely worth it to avoid the headache of figuring out the IRS systems.

This is good advice but don't forget 1099-INT has a much lower threshold. You need to issue those for just $10 or more of interest paid. Different form, different rules.

Never thought to check my last paystub! That's really smart. Do you know if box 14 items generally affect your tax refund amount at all?

Most Box 14 items don't affect your federal refund - they're usually just informational. They list things that are already accounted for elsewhere or things that don't impact federal taxes. However, certain items might affect state taxes depending on where you live. For example, some states allow deductions for certain contributions that might be listed in Box 14. That's why it's worth knowing what the codes mean, especially if you have a significant amount listed there.

I've used both H&R Block and TaxAct in different years, and neither was particularly good with unusual Box 14 entries. They both basically just let you enter the information but don't actually interpret what it means. I think it's because these codes aren't standardized.