Great discussion here! I've been managing multiple Roth IRAs for years and learned some of these lessons the hard way. One additional tip I'd add is to set up automatic contribution limits within each brokerage account if they offer that feature. For example, if you know you want to split your $6,500 annual limit between two accounts, you can often set up automatic investments that will stop once you hit your predetermined amount for each account (like $3,250 each). This prevents the accidental over-contribution scenario that Maria faced. Also, keep in mind that if your income changes during the year and you become ineligible for Roth contributions due to income limits, that's another way to accidentally over-contribute even if you're tracking the dollar amounts correctly. The income limits for 2025 phase out between $146,000-$161,000 for single filers, so it's worth double-checking your projected income if you're anywhere near those thresholds.

This has been such an informative thread! As someone who just opened my second Roth IRA account at a different brokerage, I was completely unaware of how easy it would be to accidentally over-contribute. The point about Form 5498 not being available until May is particularly eye-opening - I always file my taxes in February, so I would have never caught an over-contribution through those forms. I'm definitely going to set up that contribution limit tracking that was mentioned. It's reassuring to know that the major brokerages have built-in features to help prevent this issue. I think I'll also start using a simple tracking spreadsheet as a backup, just to be extra safe. One question I have: if someone realizes they over-contributed but it's a relatively small amount (like $50-100), is it still worth going through the hassle of the excess contribution withdrawal? Or would it sometimes make more sense to just pay the 6% penalty, especially if the withdrawal process is complicated?

I actually had this exact issue with a /ES futures spread last year. The trick is to reverse how you think about the short position. For Form 6781: 1. For the short position: Put the amount you RECEIVED when opening the position as the PROCEEDS, and the amount you PAID to close it as the COST. 2. For the long position: Put the amount you PAID when opening as the COST, and the amount you RECEIVED when closing as the PROCEEDS. This way both will calculate correctly - the long showing a gain and the short showing a loss.

I ran into this exact same issue with SPX spreads last year and it was incredibly frustrating until I figured out the correct approach. The key insight that finally made it click for me was understanding that for short positions on Form 6781, you're essentially reporting a "reverse transaction" - what you received becomes proceeds, what you paid becomes cost. For your specific situation with the SPX put spread: - Short 4950 put: Proceeds = amount you received when opening the short position, Cost = amount you paid to close it (resulting in your $320 loss) - Long 4850 put: Cost = amount you paid when opening, Proceeds = amount you received when closing (resulting in your $215 gain) The mark-to-market rule is crucial here. Since you held these past December 31st, you need to report the "deemed sale" at fair market value on Dec 31 for this tax year's return. Then when you file next year, you'll report the actual closing transactions using the Dec 31 values as your new basis. Most tax software struggles with this, but the underlying tax treatment is straightforward once you understand the mechanics. The 60/40 split applies to each leg separately, so you'll get the favorable tax treatment on both the gain and loss portions.

This has been such an incredibly thorough and helpful discussion! I'm in a very similar situation with my company's non-standard benefit year, and reading through everyone's experiences has given me so much confidence about navigating this transition. A few key takeaways that I think are worth highlighting for anyone else in this situation: 1. **Month-by-month eligibility is the golden rule** - You can absolutely have HSA contributions for part of the year and FSA contributions for another part, as long as they don't overlap in the same month. 2. **Proration is crucial** - If you're only HSA-eligible for 4 months (Jan-Apr), you can only contribute 4/12 of the annual limit, not the full amount. 3. **Documentation is your friend** - Keep detailed records of everything, especially if your HR department is as confused as mine has been! 4. **Strategic timing matters** - Think about when to incur medical expenses based on which account will give you the best tax advantage and fund availability. The practical tips about record-keeping, the IRS Publication 969 reference, and especially the real-world calculation examples have been invaluable. It's amazing how much clearer this all becomes when you see people who have actually been through it share their experiences. Thanks to everyone for making this such a comprehensive resource - this thread should be required reading for anyone dealing with HSA/FSA transitions and non-calendar benefit years!

This has been an absolutely fantastic thread! As someone who's been lurking in this community for a while, I'm impressed by the depth and quality of advice shared here. I wanted to add one small detail that might help others - when you're making the HSA to FSA transition, double-check whether your employer offers any "bridge" coverage options during the transition period. Some larger employers have supplemental plans or gap coverage that can help ensure there's no interruption in your benefits eligibility. Also, for anyone still feeling overwhelmed by all the calculations and rules, I'd recommend scheduling a quick call with your HSA provider's customer service team in addition to reading IRS Publication 969. Many HSA administrators have specialists who deal with exactly these transition scenarios and can walk you through the math specific to your situation. They often have internal tools that make the proration calculations much simpler than doing it manually. The community knowledge sharing here has been incredible - from the practical record-keeping tips to the strategic expense timing advice. It's clear that many of us have learned these lessons the hard way, so sharing that experience really helps others avoid common pitfalls. Thanks to @Julia Hall for starting such an important discussion, and to everyone who contributed their expertise. This thread is going to help so many people navigate these complex benefit transitions!

Definitely send it certified mail with return receipt requested! I learned this the hard way when dealing with the IRS - regular mail can get lost in their massive processing centers, and then you have no proof you sent anything. Certified mail gives you tracking and confirmation of delivery, which is crucial if you need to prove you responded within the required timeframe. The 30-45 day timeframe is pretty accurate in my experience, though it can sometimes take longer during busy seasons (like right after tax season). The key is that certified mail creates a paper trail showing you responded promptly to the notice. Make sure to keep copies of everything you send - the cover letter, all documentation, the certified mail receipt, and the return receipt when it comes back. If you end up needing to call later, having all these details will help the IRS agent locate your correspondence in their system much faster. One tip: write your SSN and the notice number from your CP14 clearly on the cover letter and reference them in the first paragraph. This helps ensure your response gets matched to the correct account and notice.

I went through something very similar last year and it turned out to be a timing issue between when I paid and when their system generated the CP14 notice. The fact that your IRS online account shows $0 is actually the best indicator that your payment was received and processed correctly. The discrepancy in amounts ($894 vs $1375) could be due to penalties or interest that weren't included in your H&R Block calculation, especially if there were any underpayment issues during the tax year. However, since your online account shows $0, it suggests these were either waived or your payment covered everything. I'd strongly recommend taking screenshots of your online account showing the $0 balance - do this regularly as documentation. Also gather all your payment confirmations from when you paid on July 3rd. If you paid electronically, your bank can provide detailed records showing when it cleared. Since the phone lines are impossible, I'd suggest responding to the CP14 in writing with copies of your payment proof. Send it certified mail with return receipt so you have proof of delivery. Include your SSN and the CP14 notice number clearly in your cover letter, and explain that your payment was processed and your online account shows $0 balance. Don't panic about paying the $183.50 just to avoid problems - if your account truly shows $0, you shouldn't owe anything. The written response approach will create a proper paper trail and should resolve the discrepancy within 30-45 days.

This thread has been incredibly helpful! I'm actually going through the exact same confusion right now. My gross pay was $80,000 and I contributed $12,000 to what I thought was a traditional 401k, but my Box 1 shows $70,500 instead of the $68,000 I expected. After reading through all these responses, I'm realizing I probably have a mix of traditional and Roth contributions without knowing it, plus I completely forgot about my health insurance premiums ($150/month) and HSA contributions ($200/month). That would account for an additional $4,200 in pre-tax deductions I wasn't considering. I'm going to follow the advice here and check my 401k provider's breakdown, compare my final paystub YTD totals, and create that spreadsheet someone mentioned to track everything properly. It's frustrating that something that seemed simple (does Box 1 include 401k contributions?) has so many variables, but at least now I have a roadmap to figure it out. Thanks everyone for sharing your experiences!

This has been such an enlightening discussion! I'm a newcomer to this community but dealing with the exact same W2/401k confusion. Reading through everyone's experiences has been incredibly valuable. What really stands out to me is how many different factors can affect Box 1 beyond just the obvious 401k contributions - the traditional vs Roth split, health insurance premiums, HSA contributions, auto-escalation features, mid-year changes, timing issues, and even taxable benefits being added back in. It's no wonder so many of us get confused trying to reconcile the numbers! The advice about checking your 401k provider's website for the contribution breakdown and comparing your final paystub's YTD totals to your W2 seems like the best starting point. I'm definitely going to create that spreadsheet tracking system someone mentioned to avoid this confusion next year. Thanks to everyone who shared their experiences and solutions - this thread should be required reading for anyone with their first 401k! It's amazing how something that seems straightforward on the surface has so many nuances.