Anyone know if theres a way to request this online? Seems ridiculous we have to call in 2023...

I actually just went through this process last month! Here's what I learned that might help: 1. Call the Practitioner Priority Service line (1-866-860-4259) if you're working with a tax professional - much shorter wait times 2. Have your Form 8821 or 2848 ready if someone else is helping you 3. Be very specific about WHY you need the letter - they'll ask for details about the situation requiring indemnification 4. If they say they can't issue one over the phone, ask them to mail Form 4442 (inquiry referral) to the appropriate department The key is knowing the exact IRS code section you're dealing with. Without that info, they might bounce you around. Also, don't give up after one call - different agents have different levels of knowledge about these letters. Hope this helps! The whole process took me about 3 weeks total, but I got it sorted out eventually.

Just to clarify something that might help others - the self-employed health insurance deduction has another important limitation that hasn't been mentioned yet. You can't take this deduction for any month that you (or your spouse if filing jointly) were eligible to participate in an employer-sponsored health plan. So even if your business has enough profit to cover the full premium amount, you'd need to reduce your deduction by the months you had access to employer coverage. This caught me off guard when I started freelancing while still having access to my spouse's employer plan for part of the year. The IRS is pretty strict about this - "eligible" means you could have enrolled, even if you chose not to. Worth double-checking if this applies to your situation before calculating your maximum deduction.

This is really helpful information! I'm dealing with a similar situation where my premiums are higher than my net profit. Based on what everyone's saying, it sounds like I need to look at both Schedule 1 (limited to my business profit) and Schedule A (for the excess if I have enough medical expenses to itemize). One follow-up question - when you're calculating the 7.5% AGI threshold for medical expenses on Schedule A, does that include the health insurance premiums you couldn't deduct on Schedule 1? Or do you have to exclude those since they're already "accounted for" in the self-employed deduction calculation, even if you couldn't use the full amount? I'm trying to figure out if that $4,300 excess in my case ($14,500 premiums minus $10,200 profit limit) can count toward meeting the 7.5% threshold or if it gets excluded somehow.

As a fellow military family member who's dealt with multiple PCS moves, I completely understand your concern! I went through this exact same situation two years ago when my driver's license was packed away in a box somewhere during our move to Fort Carson. Here's what I learned: the "I don't have either" option is absolutely legitimate and won't cause any federal processing delays. The IRS processes millions of military returns each year and they're very familiar with documentation challenges during relocations. What really put my mind at ease was realizing that your military dependent status actually provides additional identity verification pathways that aren't available to civilians. The federal system operates completely independently from state ID requirements, so your expedited processing benefits remain fully intact. I filed without ID verification and received my refund exactly on the standard timeline. The key thing to remember is that this option exists specifically for situations like yours - it's not a red flag, it's a built-in accommodation for real-life circumstances that military families face during moves.

As someone new to this community, I want to thank everyone for sharing such detailed and helpful information! Reading through all these experiences from military families who've faced the same ID documentation challenges during PCS moves has been incredibly reassuring. The distinction between federal and state requirements that several people explained really clarifies why this isn't the major issue I was worried it would be. It's clear that the IRS system is well-designed to accommodate the real-world situations that military families encounter during relocations. The fact that multiple people have successfully filed without ID verification and received their refunds on normal timelines gives me confidence to proceed. This community's knowledge and willingness to share personal experiences is exactly what newcomers like me need when navigating these situations for the first time!

I completely understand your frustration, Diego! This is hands down one of the most common issues I see in tax preparation, and you're absolutely not alone in this struggle. The core problem is that the withholding system is fundamentally outdated for modern dual-income households. When you both select "married" on your W-4s, each employer's payroll system calculates withholding assuming your spouse either doesn't work or earns very little. But when you file jointly, your combined incomes push you into higher tax brackets that neither employer anticipated during withholding. Here's the solution that works for the vast majority of couples in your situation: Both of you should update your W-4s to select "Married filing jointly, but withhold at higher Single rate" in section 1(c). This forces each payroll system to withhold as if you're single taxpayers with your individual incomes, which gets much closer to what you'll actually owe on your combined income. Since your situation is straightforward (standard deduction, no dependents, regular W-2 income), this approach should solve your problem without complex calculations. You might end up with a small refund instead of owing money, but honestly, the peace of mind is worth far more than optimizing every dollar. If you want to fine-tune further, the IRS Tax Withholding Estimator has been significantly improved and is much more user-friendly now. Just have your recent pay stubs and last year's tax return ready. Don't feel bad about potentially overwithholding slightly - the stress relief of finally breaking this cycle and not scrambling for money every April far outweighs the small amount of interest you'd miss out on. You can make this change anytime during the year to help with your current tax situation!

This is such a frustrating situation, but you're definitely not doing anything wrong! I went through this exact same cycle with my spouse for years before finally understanding what was happening. The withholding system is basically broken for dual-income married couples like yourselves. When you both select "married" on your W-4s, each employer's payroll system calculates your withholding assuming your spouse either doesn't work or makes very little money. But when you file jointly, your combined income often pushes you into higher tax brackets that neither employer's withholding accounted for. Here's what finally solved it for us: We both updated our W-4s to select "Married filing jointly, but withhold at higher Single rate" (section 1c on the current form). This tells each payroll system to withhold taxes as if you're single, which typically covers the gap created by your combined income. Since your situation sounds straightforward - standard deduction, no dependents, regular W-2 income - this approach should work without needing complex calculations. You might get a small refund instead of owing money, but honestly, the peace of mind of not scrambling for $1,000+ every April is absolutely worth it. The IRS Tax Withholding Estimator has also been much improved recently if you want to get more precise numbers. But for most couples in your situation, the "withhold at single rate" change alone does the trick. Don't feel bad about this - it's a system design flaw that affects thousands of dual-income couples, not something you're doing wrong!

I see you're getting great advice here! Just wanted to add one more tip from my experience as a CPA who works with several nonprofits - when you do call the IRS business line, have your organization's complete legal name, EIN, the date you issued the W2G, the winner's SSN (from the W2G), and the exact withholding amount ready. They'll also ask for the "tax period" - for gambling withholding that would be the quarter when you made the payment to the winner. Also, don't stress too much about the timing. The IRS is actually pretty understanding with small nonprofits, especially when it's clear you withheld properly and are actively trying to remit the funds. I've had clients in similar situations who got penalty relief just by explaining it was their first time handling gambling withholding and they encountered administrative delays getting set up with EFTPS. One last thing - make sure whoever handles your bookkeeping documents all of this thoroughly. You'll want a clear paper trail showing when you withheld, when you attempted to deposit, any phone calls with the IRS, etc. This documentation will be invaluable if any questions come up later during your annual filing or if you ever get selected for review.

I'm dealing with a similar situation right now with our local animal shelter's fundraising raffle! Reading through all these responses has been incredibly helpful - I had no idea about the difference between W2G and 1099-MISC forms for gambling winnings. One thing I wanted to add that might help others: our bank (Wells Fargo) is actually an authorized federal depository, so when I called them about making a tax deposit while waiting for EFTPS registration, they were able to help me with Form 8109-B that Fiona mentioned. The banker knew exactly what I was talking about and walked me through the process. Might be worth calling your bank first before trying to reach the IRS directly. Also, for anyone else panicking like I was - the IRS Publication 3079 specifically covers tax withholding for exempt organizations and has a really clear section on gambling winnings. It helped me understand that we're not the first small nonprofit to deal with this situation, and there are established procedures to help us get it right. Thanks to everyone who shared their experiences here - this thread is going to save so many small nonprofit treasurers a lot of stress!