Thanks for this advice! I checked and the second form is dated 10 days after the first one. I'll definitely send it certified mail with tracking. Should I also include a copy of my payment confirmation with the signed form?

Yes, absolutely include a copy of your payment confirmation with the signed form. This creates a clear paper trail showing you've both agreed to the adjustment and paid the amount due. I'd also recommend writing your Social Security number and tax year on every page you send them. This helps ensure your documents stay together if they get separated during processing.

This happens more than you'd think. The IRS exam department sometimes issues preliminary findings before they have all information. Usually it's because they received additional third-party reporting after the first assessment. Likely something like a 1099 or K-1 that wasn't originally matched to the return.

How do you check if you're withholding the right amount? I always get really small refunds too and I'm never sure if that's good or bad.

The IRS has a tax withholding estimator on their website that's actually pretty accurate. You input your income, filing status, and other tax situations, and it tells you if you're on track. You can adjust your W-4 anytime with your employer if you want a bigger refund (more withholding) or more money in each paycheck (less withholding). Small refunds are technically better financially because you've had access to more of your money throughout the year instead of waiting for a refund. But some people prefer larger refunds as a form of forced savings.

It really depends entirely on how much was withheld from each paycheck though. You probably just had more withheld throughout the year.

True, withholding makes all the difference. My job tends to withhold a bit more than necessary. I also contribute to a traditional 401k which lowers my taxable income pretty significantly, forgot to mention that. That probably explains the difference between our refund amounts. Might be worth checking if you have any retirement contributions or other pre-tax deductions that could have been missed.

This is so helpful! My uncle's IRA is traditional, not Roth, so sounds like I do need those annual RMDs. Is there any way to convert it to a Roth now to avoid the annual RMDs and just deal with the 10-year rule?

You can convert an inherited traditional IRA to an inherited Roth IRA, but be careful - you'll pay income tax on the entire converted amount in the year you do the conversion. This could potentially push you into a much higher tax bracket. If you decide to convert, you'd still be subject to the 10-year rule, but you'd eliminate the annual RMD requirements. Many people find it's most tax-efficient to do partial conversions over several years rather than converting the entire amount at once. I'd strongly recommend working with a tax professional to determine if and how much you should convert each year based on your overall tax situation.

I used TurboTax last year for this exact situation. It handles inherited IRA distributions fine, but you need to make sure you indicate it's from an inherited IRA when you enter the 1099-R information. There should be a specific question about whether this is an inherited IRA. The tricky part is that TurboTax doesn't calculate what your RMD should be - you need to know that number from your financial institution. As long as you distribute at least the RMD amount each year, TurboTax will report it correctly on your tax return.

Thank you! That's really helpful to know. I'll make sure to get the RMD calculation from my bank before doing my taxes. Glad to hear TurboTax can handle this if I input everything correctly.

Thanks for this info! I'm definitely under that earnings threshold for my freelance work. One more question - when I file the amended return for 2024, will I also owe a late payment penalty for the SE tax I should have paid?

Yes, unfortunately you'll likely owe some penalties and interest on the unpaid self-employment tax. There are typically three types of penalties that could apply: failure-to-file (which wouldn't apply since you did file your return), failure-to-pay (which applies at 0.5% per month of the unpaid tax), and interest on the unpaid amount. The good news is the IRS does have a first-time penalty abatement policy if you haven't had any issues in the past three years. You can request this when you submit your amended return or after you receive a notice about the penalties.

This is correct. I've used FreeTaxUSA for 3 years with my consulting business and it automatically generates Schedule SE. Make sure you didn't accidentally check a box indicating you're exempt from self-employment tax.

Thanks for this suggestion! I just emailed HR to ask if we have an accountable plan or any reimbursement program for home office equipment. I had no idea this was even an option. If they say no, should I try to convince them to start one? Is it complicated for employers to set up?

Definitely worth suggesting if they don't have one already! It's not particularly complicated for employers to set up - they just need to establish a formal policy for what expenses qualify and require reasonable documentation from employees (receipts, etc.). Many companies don't realize this is a win-win. You get your expenses covered tax-free, and they get a business expense deduction while providing a valuable benefit that helps with retention. With so many companies now permanently remote, more HR departments are implementing these programs. Just frame it as a competitive advantage for them in the current job market.

This is extremely risky advice. The IRS systems specifically flag home office deductions that don't align with self-employment income. Taking deductions you're not legally entitled to is tax fraud, regardless of whether you've been caught yet.