1 I was thinking about that! Did they help with identifying deductions throughout the year or was it more just for the filing part? And did you work with the same person each time or get random preparers?

17 They absolutely helped with deductions throughout the year. I had an initial consultation where they set me up with a tracking system for business expenses and explained what to save receipts for. You can request the same preparer each time, which I definitely recommend. I worked with the same woman for all my quarterly stuff and my annual return, which was great because she remembered my business details and could spot trends in my expenses. Just make sure to ask for their small business specialist specifically - the regular preparers might not have the same level of expertise with self-employment taxes.

13 That's actually brilliant. Do they offer other business services too? Might be worth joining for multiple benefits.

That sounds really promising. Do you find the monthly bookkeeping actually helps with your business throughout the year or is it mainly just for tax prep?

It's been incredibly helpful throughout the year. I get monthly profit and loss statements that help me track where money is going, which has helped me identify areas to cut costs. The bookkeeper also helps me understand which parts of my business are most profitable. Tax time is so much easier now too. Instead of scrambling to organize a year's worth of receipts and transactions, everything is already categorized and ready. My CPA literally told me I'm saving money on tax prep because they don't have to spend hours organizing my financial information first.

I tried that route one year and ended up missing a major deduction that an accountant caught the following year. Software is fine for W-2 employees but business taxes have too many gray areas where professional judgment matters.

I tried logging into the IRS website but I'm locked out because I don't have the right documents they need to verify my identity. Is there any other way to get transcripts without waiting for the mail?

If you're having trouble with the online account, you can also call the IRS transcript request line at 800-908-9946 to have them mailed, which is faster than using Form 4506-T. They typically arrive within 5-10 business days. Another option is to make an appointment at your local Taxpayer Assistance Center where they can print your transcripts on the spot. You'll need to bring ID, but it's a way to get them immediately without dealing with the online verification issues.

That's a really important point! Any adjustments or additional assessments can start a new collection statute for those specific amounts. I've seen people get surprised by this too.

Yeah it was a complete shock to us! The IRS had disallowed a deduction years after the return was filed and assessed additional tax. Even though it was a small amount (like $840), it created a new 10-year collection period for that portion. And they were definitely still trying to collect it.

That's a really good point I hadn't considered! Just checked my W2s and it looks like they did continue California SDI withholding even on my Texas W2. How would I go about fixing that? Would I need to get a corrected W2 issued?

You should first contact your payroll department and ask them to issue a corrected W2. They should stop the withholding going forward and may be able to refund you for the incorrect withholding after your move. If they won't issue a corrected W2 (some companies are reluctant to do this), you can still file correctly using the existing W2 and you may be able to claim a refund for the incorrectly withheld state taxes when you file your California return. The key is to clearly document your residency change date so California knows you weren't subject to their taxes during that period.

Yes, this is super important! California in particular is aggressive about this. If you spent more than 9 months there in the tax year, they might argue you're a full-year resident even if you "moved" to Texas. They look at factors like: - Where your main home is - Where your family lives - Where your cars are registered - Where you vote - Where your doctors are

What exactly happens if you miss the deadline completely? Does the IRS automatically find out and penalize you, or is it something that only comes up if you get audited? Asking for a friend who may have missed this deadline last year...

If the excess contributions aren't removed by the deadline, they unfortunately remain in the plan and yes, they can be double-taxed. The excess amount will still be included in your taxable income for the year you made the contribution, and then it will be taxed again when you eventually withdraw it in retirement. There's no immediate penalty per se, but the double taxation is the real cost. The IRS doesn't automatically flag this - it would typically only come up during an audit. However, many plan administrators now report contribution limits to the IRS, so it's becoming more likely to be caught. Your friend should consult with a tax professional about their specific situation as there might be some remediation options depending on their circumstances.

This is actually incorrect advice that could cause more problems. You can't simply "redesignate" excess 401k contributions as after-tax contributions. The 401k contribution limit applies to the total of traditional and Roth contributions combined. After-tax contributions (non-Roth) are different and subject to the overall annual addition limit, not the employee deferral limit. What you might be thinking of is excess IRA contributions, which can sometimes be recharacterized, but 401k excess deferrals must be distributed with earnings.

You're right and I misspoke. I was confusing 401k with IRA recharacterization options. For 401ks, distribution of the excess is generally the only option. Thanks for the correction! What I should have mentioned is that some 401k plans do have after-tax contribution options (separate from Roth) which have different limits, but that wouldn't help with excess contributions to the regular pre-tax/Roth portion that's subject to the $23,000 limit for 2025.