This is definitely a tricky situation! I'd recommend being very cautious here. Even if the IRS made an error, you could still be on the hook for penalties and interest if you spend money that wasn't rightfully yours. Here's what I'd do in your shoes: 1. Don't cash the check immediately - deposit it into a separate savings account that you won't touch 2. Get your 2022 account transcript as others suggested to see all payments/credits 3. Review your 2022 tax return AND any amendments you filed - look specifically at estimated tax payment lines 4. If you used a tax preparer or accountant, contact them to review your records The fact that you had K-1s and amendments makes this more complicated. Sometimes estimated payments get applied incorrectly between tax years, or there can be duplicate reporting of payments on amended returns. I'd also suggest keeping detailed records of all your communications with the IRS about this issue. If they do come back later claiming it was an error, having documentation of your good faith efforts to resolve it could help with penalty abatement. Better to be safe than sorry with a $12k+ situation!

The statute of limitations for the IRS to recover erroneous refunds is generally 2 years from the date the refund was issued, but there are some important exceptions to be aware of. If the IRS can show the refund was obtained through fraud or misrepresentation, there's no statute of limitations - they can come back indefinitely. However, in your case where it appears to be an IRS processing error rather than anything you did wrong, the 2-year rule would likely apply. That said, the clock starts ticking from when the refund check was issued, not when you cash it. So even if you hold onto the money, the IRS still has that full 2-year window to realize their mistake and demand repayment. One thing to keep in mind - if this refund is related to your 2022 amendments that involved K-1s, the IRS might still be processing corrections from the partnership level that could affect your individual return. Partnership audits and corrections can take years to work through the system, and any adjustments could potentially impact this refund. I'd definitely recommend getting that account transcript and reviewing your amendment paperwork carefully. With complex K-1 situations, it's not uncommon for estimated payments to get misapplied or double-counted during the amendment process.

Great advice from everyone here! I'm a tax professional and want to add one important consideration about the timing of your move-in strategy. When you convert your rental back to a primary residence, make sure you can document the exact date you moved in. The IRS requires you to use the property as your "main home" - meaning it's where you live most of the time. If you're still living in your current primary residence while occasionally staying at the rental, that won't qualify for the 2-year requirement. Also, regarding the 1031 exchange option you mentioned - keep in mind that once you move into the rental property as your primary residence, you can't do a 1031 exchange on it anymore. The property has to be held for investment purposes to qualify for like-kind exchange treatment. Given current market conditions and your plan to eventually buy a house, your friend's strategy makes a lot of sense tax-wise. Just make sure you're genuinely committed to living in the rental property for the full 2 years before selling, as the IRS can challenge primary residence claims if the facts don't support actual occupancy.

This is such a complex situation, but I think your friend gave you solid advice! I went through something similar two years ago with my duplex - lived in one unit, rented the other, then had to decide which to sell. The key insight that helped me was realizing that the Section 121 primary residence exclusion is one of the most powerful tax benefits available to homeowners. Being able to exclude up to $250,000 in capital gains is huge, especially in today's market where property values have increased so much. One thing I'd add to the great advice already given - consider your long-term housing needs too. If you're planning to buy a house in 2-3 years anyway, living in the smaller/less desirable condo during that time while building up your down payment could actually work out perfectly. You'll get the tax savings AND potentially have more cash available for your future home purchase. Just make sure you can genuinely commit to living in the rental property as your primary residence. The IRS doesn't mess around with primary residence claims, and you want your living situation to clearly support your tax position. But if you can make it work, the tax savings could be substantial enough to make the temporary inconvenience worthwhile.

I went through this exact same situation with my 2018 taxes! What ended up working for me was a combination of approaches mentioned here. First, I checked my state's tax website (I'm in California) and found they had an online portal where I could access my tax account history. After verifying my identity, I was able to see all the W-2 information that employers had submitted, including state withholding amounts. If your state doesn't have an online system, definitely try the Wage and Income Verification letter route that Dylan mentioned. I had to do this for a friend in Ohio, and it took about 2 weeks but gave us all the info we needed. One tip I'd add - if you're really stuck and need to estimate, check if your state publishes withholding tax tables for 2018. You can use your gross income from the federal transcript, your filing status, and number of allowances you claimed to calculate what *should* have been withheld. It won't be exact since it depends on your payroll frequency and when you started/stopped working, but it gives you a ballpark figure. The good news is that most states are pretty understanding about amended returns from that far back, especially if you're trying to claim a refund you're legitimately owed. Good luck with your backfiling!

I went through something similar when I had to backfile my 2019 taxes last year. One thing that really helped me was checking with my bank statements from 2018 - if you had direct deposit, you can often figure out your net pay amounts and work backwards. What I did was look at my December 2018 bank deposits and compare them to my gross wages on the IRS transcript. The difference between gross and net pay includes all withholdings - federal taxes, state taxes, FICA, and any other deductions like health insurance or 401k contributions. If you can find your final paystub from 2018 or even your January 2019 paystub (which often shows year-end totals), that would be ideal. But the bank statement method can at least give you a reality check on whether any estimates you get seem reasonable. Also, don't forget that your state might have had different withholding rules in 2018 compared to now - some states changed their tax laws after the federal tax reform that year. So if you do use estimation methods, make sure you're using 2018 tax tables and rates, not current ones.

Couldn't the airline vouchers be considered a rebate or price adjustment rather than income? If I buy something at a store and get a $10 rebate, that's not income. Maybe the vouchers are just a "rebate" for the inconvenience, not actual income? My brother-in-law says he never reports his vouchers.

I work for a tax preparation firm and can confirm that airline bump compensation is definitely taxable income, regardless of whether it's cash or vouchers. The IRS treats this as compensation for services (giving up your seat), not as a rebate or refund. A few key points to clarify some confusion in this thread: 1. The $600 threshold for 1099 forms only applies to the airline's reporting requirement, not your obligation to report income. All income is taxable regardless of receiving a form. 2. While vouchers with restrictions might theoretically be worth less than face value, be very careful about discounting them without solid documentation. The IRS generally expects you to report the stated value unless you can prove the limitations significantly reduce the actual worth. 3. The income is taxable in the year you received the vouchers, not when you use them. Keep all documentation from the airline showing the compensation amount and date received. Report it as "Other Income" on Schedule 1, Line 8i of your Form 1040. Even after taxes, you're still coming out ahead financially from taking the bump!

I file taxes for my husband's s-corp and we have a sept 30 fiscal year. I was told to use tax software from the CALENDAR year when the fiscal year ENDS. So for a july 1 2021 - june 30 2022 fiscal year, we used 2022 tax software even though we filed in september 2022. This has always confused me but our accountant says its right. just be careful cause the forms change yearly!!

Just wanted to add one more important detail that might help other newcomers like myself - make sure you're aware of the estimated tax payment deadlines for fiscal year S-Corps too! For a June 30 fiscal year end, your quarterly estimated payments are due on September 15, December 15, March 15, and June 15. This was another area where I initially got confused because I was thinking in calendar year terms. Also, if you're new to handling S-Corp taxes, I'd strongly recommend getting professional help at least for the first year or two. The interplay between the corporate return (1120-S) and the individual K-1 reporting can get complex, especially with fiscal years. Better to invest in proper guidance upfront than deal with penalties or corrections later!