"The IRS has updated Form 8881, but I don't see updated instructions. Has anyone seen some? Or know when they might come out? Another question -- what is the point of Part II, Line 10? how is it different from Line 9? And the two lines are supposed to be added together for Line 11? That section appears to be unchanged from earlier years, so I'm hoping someone else can explain it to me."

"I have a situation where an S Corporation sole shareholder set up a SIMPLE IRA plan for himself and his three employees in April, 2022 using his financial broker. In 2022, he deposited 14,000 for himself into this plan with money from his savings account. There was no payroll withholding for this plan for the owner or his employees. He never notified payroll he even had this plan. He was funding this plan through his financial advisor, who I recently learned turned over his signed Form 5304 to someone else. Fast forward to December 2023, when his payroll service was asked how much he could contribute for 2023? Since there was no knowledge of this plan's existence, the answer was 'What plan?'. My question is what happens now? I have an owner with 14,000 in a SIMPLE IRA that got there without payroll, nothing for any employees, and no matching. If the money is removed it will come on a 1099-R as taxable, plus it will be less than two years since it was deposited which is one penalty, early withdrawal which is another penalty, and then the penalty for the whole plan being administered incorrectly. Since this 14,00 was already taxed, how do we fix this where the money isn't taxed all over again?"