Has anyone notice that different tax software handles this differently? In H&R Block, it automatically combines all entries with the same payer ID. But when I tried TurboTax at my friend's house, it let me enter each fund individually.

I actually just went through this exact same situation with my Vanguard 1099-DIV! After reading through all these responses and doing some research, I ended up listing each fund separately using the same payer ID that Vanguard provided on the form. What helped me decide was realizing that the IRS computers are designed to handle this - they match the total reported dividends under Vanguard's payer ID with what Vanguard actually submitted to them. As long as those numbers align, you're good. I used TurboTax and it made it really easy to enter each fund on its own line with the same payer information. Plus, having each fund listed separately will definitely help me next year when I need to track cost basis for any sales. Much better than trying to figure out which fund was which from a combined entry. The whole process took maybe 10 extra minutes compared to combining everything, but the peace of mind was worth it. No issues with my return either - got my refund without any questions from the IRS.

I'm dealing with a similar situation and have been following this thread closely - thank you all for sharing such detailed strategies! I wanted to add one more approach that worked for me recently: if you have a specific IRS notice or letter, try calling the direct number printed on that notice instead of the general line. I had a CP2000 notice and called the number specifically listed on it, and got through in about 25 minutes on my second attempt. The agent was already familiar with that type of issue and resolved it quickly. Also, for anyone feeling anxious about these calls (like I was!), remember that the IRS agents are generally very helpful once you reach them - they deal with phone system frustrations all day too and understand what you've been through to get connected. Don't let the broken phone system discourage you from getting the help you need!

I've been following this thread as someone who recently went through the same struggle, and I wanted to share what finally worked for me after trying several of the methods mentioned here. I started with the Taxpayer Assistance Center line (1-844-545-5640) that @Grace Patel recommended, but got a busy signal twice. Then I tried the main line using @Freya Larsen's button sequence at 7 AM on a Wednesday, and after a 43-minute wait, I actually got through! The key things that helped: using a landline, having all documents ready (especially my physical Social Security card as @Tami Morgan mentioned), and staying calm during the call. The agent was incredibly patient and resolved my amended return question in about 15 minutes. For anyone still struggling - don't give up! The persistence really does pay off, and this community's advice is spot-on. Also, if you're calling about a specific notice, definitely try the direct number on that notice first as @Diego Flores suggested. Thanks everyone for sharing your experiences - it made all the difference! 🙏

This is a really helpful thread! I'm dealing with a similar situation but with a twist - I made excess contributions to both traditional AND Roth IRAs for 2023. Do I need to file separate Form 5329s for each type of account, or can I report both on the same form? Also, I'm seeing conflicting information about whether I can recharacterize the traditional IRA excess contribution to a Roth IRA to avoid the penalty, or if that would just create another excess contribution issue since my income was too high for direct Roth contributions anyway. Has anyone dealt with this double excess contribution scenario before? My tax software (H&R Block) is giving me error messages when I try to enter both types of excess contributions, so I'm wondering if I need to handle this manually or switch to different software.

This thread has been incredibly helpful! I'm dealing with a similar situation but wanted to clarify something about the timing. You mentioned withdrawing the excess contributions "as of a few days ago" - the key deadline here is the tax filing deadline for the year the contribution was made (including extensions). For 2023 contributions, that deadline was October 15, 2024 (with extension). If you withdrew after this date, you'll still owe the 6% penalty for 2023 even though you removed the excess. The penalty applies because the excess was still in the account on December 31, 2023. Regarding TaxAct showing this on your 2024 Form 5329 - that's incorrect. You need the 2023 Form 5329 to report excess contributions made for tax year 2023. Most tax software struggles with this cross-year reporting. You may need to manually prepare and mail the 2023 Form 5329 separately from your main return. And yes, you're correct about the timing for the earnings tax - you'll report that on your 2024 return next year when you receive the 1099-R from Fidelity. The 10% early withdrawal penalty will apply to just the earnings portion, not the original contribution amount.

Just want to emphasize what others have mentioned about the safe harbor provision - this could save you from making any estimated payment at all! Since you already increased your W-2 withholding after that $8,000 surprise, calculate whether your total withholding for 2025 will equal at least 100% of your 2024 tax liability. If so, you're protected from penalties even if you don't make estimated payments on the capital gains. To figure this out: take your 2024 total tax (line 24 on Form 1040) and divide by your remaining paychecks this year. If increasing your withholding by that amount per paycheck gets you to 100% of last year's tax, you can skip the estimated payment entirely. This is often easier than juggling quarterly deadlines, especially for one-time gains like yours. If you do decide to make the estimated payment anyway for peace of mind, Form 1040ES has a worksheet that walks through the exact calculation. And yes, you can absolutely make just one payment without committing to the other quarters - the IRS doesn't require you to establish a pattern.

This thread has been incredibly helpful! I'm a tax professional and wanted to add one important clarification that might help others reading this. The safe harbor provision that several people mentioned (paying 100% of prior year's tax liability) is absolutely correct and often the easiest solution for one-time capital gains situations. However, I want to emphasize the timing aspect that Darcy touched on - if you sold stocks in March 2025, that's actually Q1 of 2025, and the estimated payment deadline was April 15th, 2025. Since we're now past that deadline, if you haven't made the Q1 payment and don't qualify for safe harbor protection, you might face a small underpayment penalty for that quarter specifically. The good news is that increasing your withholding going forward can still help minimize any penalties, and for a $2,700 gain, we're talking about a relatively small penalty anyway (usually under $50). The IRS calculates underpayment penalties quarter by quarter, so even if there's a small penalty for Q1, you can avoid issues for the rest of the year. For future reference, keeping track of quarterly deadlines is crucial: Q1 (Jan-Mar) due April 15th, Q2 (Apr-May) due June 15th, Q3 (Jun-Aug) due September 15th, and Q4 (Sep-Dec) due January 15th of the following year.

Thanks for all the helpful responses everyone! Just to confirm my understanding based on what I'm reading here - since I paid $14,500 in qualified expenses and my AGI is $64,000, I would qualify for the full $2,500 AOTC. With my tax liability of $800 before credits, I would: 1. Use $800 of the credit to zero out my tax liability 2. Get $1,000 back as the refundable portion 3. Unfortunately lose the remaining $700 since it's non-refundable and I have no more tax to offset So in total I'd get $1,800 in benefit ($800 tax reduction + $1,000 refund) from the $2,500 credit. Does that sound right? Also really appreciate the clarification about the 40% rule - that explains why it's exactly $1,000 maximum refundable. TurboTax definitely didn't explain it that clearly!

This thread has been incredibly helpful! I was in almost the exact same situation last year - got overwhelmed trying to figure out the AOTC refundable portion and ended up paying a tax preparer $300 just to avoid the confusion. One thing that might help future readers: the IRS Publication 970 has a worksheet that walks through the AOTC calculation step by step, including how to figure out your refundable vs non-refundable portions. It's buried in there but once you find it, it's actually pretty straightforward. Also want to echo what others said about keeping good records of your qualified expenses. The IRS can ask for documentation up to 3 years later, so save those tuition receipts and textbook purchases! I learned this the hard way when they questioned my 2021 AOTC claim and I had to scramble to find my son's book receipts from freshman year. Great explanations from everyone - this community is so much more helpful than the IRS website sometimes!