Don't forget to check if you need to file an amended state return too! Depends on your state, but most require it if you amend your federal.

I was in almost the exact same situation last year - forgot about a W-2 from a part-time retail job and didn't realize until weeks after filing. The anxiety was real! But honestly, it's way more common than you think and totally fixable. Here's what I learned from going through it: File the 1040-X as soon as possible, but don't stress too much about the timeline. Since you caught it yourself before the IRS did, you're already ahead of the game. The additional tax on $3,800 probably won't be as scary as you think - mine was around $600 for similar income. One tip that saved me some headache: when you calculate what you owe, factor in any federal withholding that was on that forgotten W-2. A lot of people forget that part and think they owe more than they actually do. The withholding reduces what you'll need to pay with your amendment. You're doing the right thing by fixing it proactively. The IRS appreciates voluntary corrections way more than having to chase you down later!

I'm really glad I found this thread! I'm in a very similar situation - lost my job in January and just discovered I owe $2,600 from freelance writing work I did last year. Reading everyone's experiences has been incredibly reassuring. One thing I wanted to add that helped me personally was checking if I qualified for any penalty relief. I found out that if you can show "reasonable cause" for not paying on time (like job loss), the IRS might waive some penalties. You have to request this separately, but it's worth looking into, especially if your unemployment is well-documented. Also, for anyone feeling overwhelmed by all the forms and options mentioned here, I'd suggest starting with the IRS website's "Payment Plan" tool first. It walks you through the basic questions and can tell you upfront if you qualify for online setup. If your situation is more complex (like needing Currently Not Collectible status), then you can move on to calling or using one of the services people mentioned. The biggest thing I've learned from this whole experience is that the IRS actually wants to work with you if you're proactive about it. They'd rather get paid something eventually than have to chase you down. Don't let the fear paralyze you - there really are options, and this community has shown that so many people have successfully navigated this exact situation!

I just wanted to jump in here as someone who went through this exact situation a couple years ago. The anxiety you're feeling is completely understandable - I remember losing sleep over a $2,800 tax bill when I was unemployed for 6 months. One thing that really helped me was keeping detailed records of all my unemployment documentation and any correspondence with the IRS. When I eventually set up my payment plan, having everything organized made the process much smoother. I also discovered that some states offer additional resources for unemployed taxpayers - mine had a free tax clinic that helped me understand all my options without any cost. The relief I felt once I actually contacted the IRS and got a plan in place was incredible. The anticipation and fear were honestly worse than dealing with the actual situation. They were much more understanding than I expected, especially when I explained my unemployment circumstances clearly. Don't let this consume you - there are definitely paths forward, and from what everyone has shared here, you have multiple good options to explore. The most important thing is taking that first step to address it rather than letting the anxiety paralyze you. You've got this!

One thing nobody has mentioned - the penalties for incorrect filing or late filing of Form 3520 are BRUTAL. The minimum penalty is $10,000 and can go up to 35% of the gross value of what you received!!! I learned this the hard way when I messed up on my inheritance from the UK. Double check EVERYTHING and make sure you file on time. The deadline is the same as your regular tax return including extensions. If you're even a day late, they can hit you with those penalties.

I went through this exact situation with a similar inheritance from my grandmother in France. The key thing that helped me was understanding that you need to determine the fair market value of ALL assets as of the date you actually received them, not when your aunt passed away. For the $75,000 you mentioned, make sure you're using the correct valuation date - this is usually when the Spanish probate process officially transferred the assets to you, not the date of death. This can make a significant difference in the amounts you report. Also, keep in mind that you may need to file additional forms beyond just Form 3520. If any of the inherited assets generate income (like rental property or dividends), you might also need Form 3520-A or other international reporting forms. The IRS has a whole web of international forms that interconnect, and missing one can trigger penalties on others. I'd strongly recommend getting professional help if the total value is significant - the cost of a qualified international tax professional is usually much less than the potential penalties for getting it wrong.

Thank you everyone for all this helpful information! I'm the original poster and I just wanted to update that I successfully completed my Schedule 1 using the advice here. You were all absolutely right - Line 16 is just the simple sum of lines 1-15 in the far right column. I ended up with $13,360 total ($8,700 business income + $410 capital gain + $4,250 unemployment) and made sure to transfer that exact amount to Line 8 on my Form 1040. I double-checked my math three times after reading about the software errors some of you experienced! One thing I learned from this thread is that I should probably consider getting help with next year's taxes since my side business is growing. The tips about taxr.ai and Claimyr are bookmarked for future reference. Really appreciate this community - you saved me from potentially making costly mistakes!

As someone who's been dealing with tax preparation for years, I want to emphasize something crucial that came up in this thread - the importance of keeping detailed records throughout the year. I see you mentioned business income of $8,700 from your side gig, and that's exactly the kind of income that can get complicated quickly. For next year, consider setting up a simple spreadsheet or using accounting software to track your business income and expenses monthly. This will make Schedule 1 much easier and could potentially save you money through deductions you might be missing. Business expenses like equipment, software, home office deductions, and even mileage can significantly reduce that $8,700 taxable income. Also, since you mentioned not trusting tax software after it messed up your state taxes, you might want to look into having a tax professional review your return before filing - especially with business income involved. The peace of mind is often worth the cost, and they can catch things that might save you more than their fee.

Has anyone dealt with the situation where disability gets approved retroactively? My father was in a similar situation where he got a lump sum payment that covered previous months, and it really messed up my tax return from the prior year.

This is exactly the kind of complex situation where getting professional guidance can save you both money and stress. Based on what you've described, you're likely eligible for multiple tax benefits, but there are some important details to consider. First, make sure you understand the "support test" - you need to provide more than 50% of each dependent's total support for the year. This includes housing, food, medical expenses, clothing, education, and other necessities. Keep detailed records of everything you pay for them. For your disabled parent, even though they're waiting for disability approval, as long as their current income is under the threshold and you're providing the majority of their support, you should qualify to claim them. When/if disability gets approved retroactively, you may need to reassess, but that's a bridge to cross later. Your minor sibling should definitely qualify as a dependent, and this could make you eligible for Head of Household filing status, which has significantly better tax rates than Single status. Don't overlook the medical expense deduction if you're paying for your parent's medical costs. While there's a 7.5% AGI threshold, with multiple dependents and significant medical expenses, you might exceed it. I'd strongly recommend consulting with a tax professional who has experience with these types of family caregiver situations, as the potential tax savings could be substantial and the rules can be tricky to navigate correctly.