When should real estate commission income be reported - 2023 or 2024 Income?

But what about the SEP-IRA contribution? If the income counts for 2023 but the contribution is marked as 2024, will that cause problems? Can they change the contribution year with Vanguard?

For the SEP-IRA contribution, you should contact Vanguard to redesignate it as a 2023 contribution if possible. You have until the tax filing deadline (usually April 15, 2024, without extensions) to make contributions for the 2023 tax year. When making retirement contributions, you need to specifically tell the financial institution which tax year you're contributing for. It sounds like either there was a miscommunication or they defaulted to 2024 since the money was deposited in January. Call them and see if they can change the designation to 2023.

Does taxr.ai help with figuring out retirement contributions too? I'm also a realtor and constantly confused about when I should count certain commissions, especially December closings.

I'm skeptical about these online tools. How does it actually work? Does it just regurgitate IRS rules or does it actually give personalized advice? The timing issues with real estate commissions are so specific.

Yes, it absolutely helps with retirement contribution timing. You upload your documents and it identifies issues like mismatched tax years between income and retirement contributions. It then gives you specific steps to fix these timing problems before they cause audit flags. For your skepticism question, it's not just regurgitating IRS publications. It uses document analysis to identify your specific situation. For example, it caught that my broker was applying the constructive receipt rule but my IRA administrator wasn't, which could have caused issues. Then it provided exact language to use with my financial institution to fix it.

Wait, you're telling me there's a way to actually talk to a human at the IRS? I've been calling for weeks about a similar issue and keep getting disconnected. How does this service actually work?

Yeah right. I've tried literally everything to get through to the IRS. No way this actually works. They're completely inaccessible these days, especially during tax season. Sounds like a scam to me.

It uses a system that continuously redials and navigates the IRS phone tree until it gets through to a representative. Once it connects, you get a call back and are connected directly to the IRS agent. That's how I was able to get through in under 45 minutes instead of waiting for hours or days. Not a scam at all. The IRS is definitely hard to reach, that's exactly why this service exists. They don't provide tax advice - they just get you through to the actual IRS so you can get official answers. Made a huge difference for resolving my commission timing questions.

Is there any way to dispute this with the broker? We really wanted that income to count for 2024 since we'll be in a lower tax bracket this year due to some other changes. Would restructuring as an S-Corp help with this kind of situation in the future?

Unfortunately, there's not much you can do to dispute it for this particular transaction. The IRS constructive receipt doctrine is pretty clear on this point, and your broker is following proper tax law. For future planning, an S-Corp might give you more flexibility in some areas of tax planning, but it wouldn't fundamentally change the constructive receipt rules. What it could do is allow you to take some income as salary and some as distributions, which might help with overall tax planning. I'd recommend talking to a tax professional who specializes in real estate businesses about whether an S-Corp makes sense for your specific situation.

Yes, constructive receipt would still apply. What matters is when the funds became available to the broker, not when they deposited the check. If they physically had the check in 2023, that's 2023 income for tax purposes, even if they waited to deposit it.