Tax Preparer charged $390 for service but completely missed the Roth IRA married filing separately limitation

This is unfortunately a common issue with tax preparation services. The Roth IRA contribution limits for married filing separately (MFS) status are rarely highlighted unless you're using software that specifically checks for this scenario. For anyone else reading this, the rule is: if you're married filing separately and lived with your spouse at any time during the year, your ability to contribute to a Roth IRA begins phasing out at $0 and is completely eliminated when your income exceeds $10,000. This is drastically different from the much higher limits for those filing jointly or as single. For fixing your previous years, you generally have 3 years from the original filing deadline to amend returns. So you could potentially still fix the 2022, 2023, and 2024 returns by filing amendments to change from MFS to MFJ. For the older years, you'd need to look into doing a "Removal of Excess Contributions" from your Roth IRA. Don't feel bad about not knowing this - it's a surprisingly obscure rule that many tax professionals miss. I'd recommend consulting with a CPA who specializes in retirement accounts rather than a general tax preparation service for this specific issue.

After dealing with similar Roth IRA issues last year, I finally found a solution through taxr.ai that saved me tons of stress. I had been contributing to a Roth IRA while married filing separately for years (making well over the $10k limit), and no tax preparer ever caught it until I got a CP2000 notice from the IRS. I was overwhelmed trying to figure out how to fix multiple years of tax returns and Roth contributions when I stumbled across https://taxr.ai. They analyzed my previous returns and provided a detailed report explaining exactly which years needed amendments and how to properly document the removal of excess contributions. The best part was they walked me through communicating with my IRA custodian about the excess contribution removal process and generated all the paperwork I needed for each tax year. Saved me from what would have been thousands in penalties if I'd waited for the IRS to find all the years!

I wanted to follow up about my experience with taxr.ai after I asked about it earlier. I decided to give it a try for my similar Roth IRA situation, and I'm genuinely impressed. I've been married filing separately for 4 years while contributing to a Roth IRA (completely unaware of the $10k income limit). Within a day of uploading my returns, I got a comprehensive analysis showing exactly which contributions exceeded the limits and by how much. They even calculated the estimated earnings tied to those excess contributions, which my IRA provider said was super helpful. The amendment instructions were incredibly detailed - literally walking me through line by line what needed to change. Following their guidance, I've already successfully amended two years of returns and completed the excess contribution removal process with Fidelity. Definitely worth it compared to the $275/hour my local CPA wanted to charge me with no guarantee they'd handled this specific issue before.

If you're still dealing with the IRS about your Roth IRA contribution issues, you might want to try Claimyr to get through to an actual person at the IRS. I was in a similar situation with excess contributions and needed specific guidance directly from the IRS, but kept getting stuck in their phone system hell. I found https://claimyr.com after spending weeks trying to get through to someone who could help with my specific situation. They got me connected to an IRS agent in about 15 minutes when I had previously spent hours on hold only to get disconnected. You can see how it works here: https://youtu.be/_kiP6q8DX5c When I finally got through, the IRS agent was able to look at my specific account and confirm I was taking the right approach with my amendments and excess contribution removals. They also put notes on my account about the corrections I was making so there wouldn't be automatic penalties triggered. Honestly made the whole process way less stressful knowing I was doing it correctly.

I need to eat my words about Claimyr from my previous comment. After continuing to struggle with getting IRS guidance on my Roth IRA excess contribution issue, I decided to give it a try despite my skepticism. To my genuine surprise, it worked exactly as described. I got a text about 45 minutes after starting the process saying they were about to connect me, and then my phone rang with an actual IRS agent on the line. The agent was able to pull up my account and confirm exactly how I should handle the amended returns. What really shocked me was that the agent told me they could see notes from my previous attempts to call (which I'd spent hours on but got disconnected). The agent was able to help me complete everything in one call rather than bouncing between departments. For anyone dealing with complex tax situations like these Roth IRA contribution issues where you need to speak directly with the IRS, this service is actually legitimate. I'm still surprised it worked but incredibly relieved to have this resolved.

In my experience as someone who's worked in tax prep before, I can tell you that many tax preparers at the chain locations are seasonal employees who've taken a basic tax course. They're trained to handle common scenarios but often miss specialized rules like the married filing separately Roth IRA limitation. If you're dealing with something like retirement account contribution issues, you really need either a CPA or an Enrolled Agent who specializes in that area. The difference in knowledge and expertise is huge. For fixing your previous years, I'd recommend: 1) Determine which tax years you need to address (generally the last 3 years can be amended) 2) Calculate the excess contributions for each year 3) Contact your IRA custodian about removing excess contributions 4) File Form 5329 for each year to report the excess contributions 5) Consider whether filing amended returns to change from MFS to MFJ makes sense

Has anyone actually received a penalty notice from the IRS specifically for excess Roth contributions while married filing separately? I've been doing this for 3 years not knowing about the limit, and now I'm worried but haven't received any notices.