I'm turning 50 in November 2023. Can I make the catch-up contribution for the whole year, or just for the months after my birthday?

You can make the full catch-up contribution of $1,000 for the entire 2023 tax year! The IRS bases eligibility on whether you're 50 or older at any point during the calendar year. So even though you're turning 50 in November, you qualify for the full $7,500 contribution limit for 2023. This is actually a nice little bonus for people in your situation - you effectively get to make "catch-up" contributions for the months before you turn 50.

I used TurboTax last year in this exact situation (I worked, husband didn't). It actually walked me through the spousal IRA contribution pretty well. There's a specific section about retirement contributions, and it asked if my spouse had any earned income. When I entered zero, it explained the spousal IRA rules and confirmed we could still contribute up to the full amount for him. The key is making sure you indicate that you're filing jointly - that's what enables the spousal IRA option.

Thanks for explaining that! I think I must have missed something in the questionnaire because it never gave me that option clearly. I'll look specifically for the retirement contributions section this year and make sure we're filing jointly (which we are). Really appreciate the tip about where to find it.

That's really smart! Do you have any specific tips on how to document all those different responsibilities? Like do you keep a time log or something?

Oh that's a good point about the calendar year requirement. My business tends to be seasonal with a lot of income at the end of the year, so that might actually work out well for planning purposes. Do you happen to know if I'd need to start taking a salary immediately after forming the S-Corp? Or could I wait until I've built up some reserves in the business account first?

You should start taking a reasonable salary as soon as the S-Corp election is effective. The IRS looks suspiciously at S-Corps that distribute profits without paying any salary, as that appears to be avoiding payroll taxes. That said, you don't necessarily need to take a salary with every single payment that comes in. Many S-Corp owners set up quarterly or monthly payroll for themselves, allowing some cash to accumulate in the business account before processing payroll. Just make sure that by the end of the tax year, you've paid yourself a reasonable salary relative to the profit the business generated. Your payroll schedule should be consistent and documented as part of your business practices.

Yes, the company that paid you would have sent a copy of your 1099-NEC to the IRS. The IRS has automated systems that match reported income with filed tax returns, so they likely know about the discrepancy. That's why it's good you're fixing it proactively!

That's actually a really good point. I did pay with my credit card, so I could probably dispute the charge. Do you know what kind of documentation I'd need to provide to the credit card company? Would screenshots of my unanswered emails be enough?

Screenshots of emails, chat transcripts, and dates/times of attempted communications would be perfect documentation. Most credit card companies have a fairly straightforward dispute process - you'll typically need to fill out a form explaining that you paid for services that weren't delivered despite multiple attempts to resolve the issue. The key is demonstrating that you made reasonable efforts to work with the merchant first. Include specific details like "Sent emails on March 5, 12, and 19 with no response" and "Initiated customer service chat on March 25 which was terminated by representative without resolution." Credit card companies generally side with customers in cases where services weren't provided, especially when you have documentation showing the company was unresponsive.

That's actually genius. Do you remember which manager you contacted? I'm having similar issues with them right now.

That's an interesting idea I hadn't thought about! He's 52, so he could do the $8,000 contribution. Would he be able to just move some of the CD money directly into a Roth or would he need to wait until the CD matures? Also, are there income limits for Roth contributions that might affect him?

He would likely need to wait until the CD matures unless he's willing to pay an early withdrawal penalty, which would probably negate some of the tax benefits. Yes, there are income limits for Roth IRA contributions. For 2025, a single filer starts to see reduced contribution limits at around $146,000 and is completely phased out at $161,000. With his $75K self-employment income plus $12K in interest, he should be well under those limits, so he'd be eligible for the full contribution.

This is super important advice! I didn't make estimated payments on some investment income last year and got hit with an underpayment penalty. It wasn't huge but still annoying to pay extra for no reason.