I dealt with a similar situation a few years ago when my employer incorrectly classified me as a statutory employee. The key thing to understand is that this classification has specific legal requirements that your situation clearly doesn't meet. As a software developer working on-site with regular hours, benefits, and employer-provided equipment, you're definitely a traditional W-2 employee. The IRS is pretty strict about the four categories of statutory employees (delivery drivers, life insurance sales agents, certain traveling salespeople, and home workers using employer materials). Here's what I'd recommend doing immediately: 1. Contact your former employer's HR/payroll department in writing (email is fine) explaining the error 2. Reference IRS Publication 15-A which defines statutory employee classifications 3. Request a corrected W-2 (Form W-2c) with the statutory employee box unchecked 4. Give them a reasonable deadline (like 10 business days) to respond If they don't respond or refuse to correct it, you have options. You can file Form 4852 as a substitute W-2 with the correct information, or contact the IRS directly for assistance. Don't file your taxes with incorrect information - it could cause issues down the road. Most employers will fix this quickly once they realize their mistake, especially when you explain the specific IRS requirements for statutory employee classification.

I'm a CPA and see this exact issue pretty frequently during tax season. You're absolutely right to be concerned - this is almost certainly an error on your employer's part. Software developers working on-site with regular schedules, benefits, and employer-provided equipment are textbook W-2 employees, not statutory employees. The statutory employee classification is very narrow and specific. It only applies to four categories: certain delivery drivers, life insurance sales agents, traveling salespeople working for one company, and home workers using materials provided by their employer. Your situation doesn't fit any of these. Here's my recommended approach: 1. Email your former employer's HR/payroll department immediately explaining the error 2. Reference that you were a regular employee with benefits, set schedule, and on-site work requirements 3. Request a corrected W-2 (Form W-2c) with the statutory employee box unchecked 4. Give them a specific deadline (I usually suggest 10 business days) If they don't respond or refuse to correct it, don't panic. You can file Form 4852 (Substitute for Form W-2) with your tax return showing the correct information, or contact the IRS for assistance. Whatever you do, don't file with the incorrect statutory employee classification - it could trigger audit flags and complicate your taxes unnecessarily. Most employers fix these mistakes quickly once they understand the IRS requirements. Keep documentation of all your communications in case you need to show the IRS you attempted to resolve this properly.

Your tax professional was definitely wrong - you absolutely can file jointly for federal while filing separately for your respective states. This is actually a very common situation for couples living in different states. Federal and state tax systems are completely independent. You can choose married filing jointly for federal (which usually provides better tax benefits) while each filing as residents in your respective states - you in PA and your wife in NJ. The key things to consider: - File joint federal return reporting all income - Each file resident state returns in your home states - If either of you works across state lines, you may need non-resident returns too - PA and NJ have reciprocal agreements that can simplify things depending on work locations That $8,000 federal tax bill when filing jointly sounds unusually high - there might be withholding issues or other factors at play. I'd strongly recommend getting a second opinion from a CPA who specializes in multi-state taxation. Don't let one incorrect professional cost you thousands in overpayment. The fact that your gut told you something was off was right on target. Trust that instinct and find someone with proper multi-state experience.

The PA/NJ reciprocal agreement actually works in your favor when you both work in your home states! Since you work in PA (where you live) and your wife works in NJ (where she lives), the reciprocal agreement means neither of you will have to deal with non-resident state returns for work income. You'll each just file resident returns in your respective states. This makes your situation much cleaner than many multi-state couples deal with. You can absolutely file married filing jointly for federal while each filing separate resident state returns. The reciprocal agreement eliminates the cross-state income complications that make some multi-state situations more complex. Your instincts were absolutely correct - there's no requirement that federal and state filing status must match. That's a fundamental misunderstanding of how the tax systems work. I've seen this same confusion from tax preparers who don't regularly handle multi-state situations. For your situation specifically: joint federal return, separate PA resident return for you, separate NJ resident return for your wife. Clean and straightforward thanks to where you each work and live. This should result in much better tax outcomes than trying to force everything into joint state filings that don't make sense for your circumstances.

From personal experience with our family's C corp, you should also consider whether the buyout affects your company's S corporation eligibility for the future, if that's something you might want to pursue. After our shareholder redemption, we realized we finally had the right ownership structure to elect S status and save on taxes.

One thing I haven't seen mentioned yet is the importance of getting a proper business valuation if you haven't already. The IRS can challenge the purchase price in an audit if it seems unreasonable compared to fair market value, especially in closely-held C corporations where arm's length transactions are rare. We learned this the hard way when our initial buyout price was based on book value rather than fair market value. The IRS questioned whether part of the "purchase price" was actually disguised compensation to the departing shareholder, which would have changed the tax treatment completely. We ended up getting a formal appraisal from a certified business appraiser after the fact to support our position. Also, make sure your corporate minutes clearly document the business purpose for the buyout - resolving shareholder disputes, eliminating management conflicts, etc. The IRS looks for legitimate business reasons beyond just wanting to change ownership percentages. Keep detailed records of the meetings where the decision was made and the rationale discussed.

I'm probably going against the crowd here, but TurboTax has always been super easy for me even as a first-time filer years ago. Yes it costs more than FreeTaxUSA but the interface is really user friendly. They walk you through federal and then state automatically, importing all relevant info from federal to state.

For your first time filing, FreeTaxUSA is definitely a solid choice! You'll do federal and state separately, but like others mentioned, the info carries over so you're not starting from scratch twice. Regarding payment options - if your debit card is acting up, you can usually pay the FreeTaxUSA service fee directly from your bank account using your routing and account numbers (same info you'd use for direct deposit). Most banks also let you pay bills online through their bill pay service if you want to avoid entering card info. One thing I learned my first year: don't stress too much about making mistakes. The software catches most common errors, and even if something small slips through, it's usually easily fixable. The IRS isn't out to get you - they just want their forms filled out correctly. You've got this!

I'm dealing with a similar situation right now and this thread has been incredibly helpful! My 2023 refund has been stuck with 570/971 codes because I never filed my 2020 return (pandemic stress made me completely forget about it). I just submitted the missing return last week and have been anxiously waiting for any sign of progress. Reading all these experiences gives me so much hope - especially seeing that the WMR message change from PATH Act to "being processed" seems to be a really reliable indicator that they've received your documentation and are actively working on it. The timeline breakdown everyone's shared (typically 3-5 weeks after that processing message appears) is super helpful for setting expectations. It's amazing how we all become IRS transcript code experts when going through this! I never thought I'd need to understand what 570, 571, and 846 codes mean just to track my own refund. But this community has been invaluable for learning what to look for and when to expect updates. Thanks to everyone who shared their timelines and experiences - it really helps reduce the anxiety of not knowing what's happening with your money. Fingers crossed all of us waiting see those magic 571 and 846 codes appear soon! 🤞

This is so helpful to read! I'm in a very similar situation - my 2023 refund has been held with 570/971 codes because I never filed my 2019 return. I just mailed it in certified mail about 2 weeks ago and have been checking WMR obsessively every day since. Seeing that your status changed to "being processed" after just 10 days gives me a lot of hope that mine might update soon too. I've learned more about IRS transcript codes in the past month than I ever wanted to know! It's crazy that we have to become experts in all these codes just to understand what's happening with our own money. But reading everyone's experiences here about the 571 and 846 codes to watch for is really helpful. The anxiety of waiting when you're counting on that refund is no joke. Thanks for sharing your update - it's encouraging to see that things are moving for you and gives the rest of us hope that we're on the right track too! 🤞