I went through this exact same situation last year and can confirm your software is correct! Schedule C losses absolutely can offset W-2 income - it's one of the legitimate tax benefits of running a business, even when you're starting out. The confusion you're experiencing is super common because many people think business and employment income are completely separate for tax purposes, but they're not. Your total income on your 1040 includes both your W-2 wages AND your Schedule C business income (or loss). When you have a business loss, it reduces your overall adjusted gross income. Just keep detailed records of all your business expenses and activities. The IRS wants to see that you're operating with a genuine profit motive - which it sounds like you are since you invested in equipment and were actively trying to generate revenue. Starting businesses often have losses in their early years due to startup costs, and that's completely normal and expected. Your $2.7k loss reducing your taxable income is legitimate and could save you several hundred dollars in taxes depending on your bracket. Don't worry about filing incorrectly - you're doing this right!

I'm dealing with a very similar situation and this discussion has been incredibly helpful! I started a small online tutoring business this year while working my regular teaching job. Between setting up my website, buying equipment, and getting certified in additional subjects, I spent about $3,200 but only earned $900 in revenue. I was really worried that trying to deduct this $2,300 loss would be a red flag to the IRS, but reading everyone's experiences here has given me much more confidence. It sounds like as long as I'm genuinely trying to build a profitable business (which I am - I've been actively marketing and already have several students lined up for next year), then these startup losses are completely legitimate. One thing I'm curious about - does anyone know if there are specific documentation requirements for proving business intent? I've been keeping all my receipts and tracking my time, but I want to make sure I'm covering all the bases in case of an audit. Thanks to everyone who shared their experiences - it's so valuable to hear from people who've actually been through this process!

Has anyone actually been audited for messing up the foreign tax credit calculations? I'm wondering if I should just take the simplified foreign tax credit since my foreign taxes are just under $600. Seems way easier than going through all these calculations with percentages and filling out Form 1116.

I went through this exact same situation last year with multiple mutual funds and had to piece together all the foreign source income percentages. One thing that really helped me was creating a simple spreadsheet to track everything. I made columns for: Fund Name, Total Dividends (from 1099-DIV), Foreign Source %, and Calculated Foreign Income. This made it much easier to double-check my math and keep everything organized when filling out Form 1116. Also, don't forget to look for any foreign taxes that were actually withheld - these should show up on your 1099-DIV as well. You'll need both the foreign income amount AND the foreign taxes paid to complete the foreign tax credit calculation properly. For your domestic funds, even if the foreign percentage seems small (like 2-5%), it's still worth including since every bit helps with the credit calculation.

I've been dealing with this exact same nightmare! My automated payment plan has been working perfectly for over a year, but my March payment of $142 just disappeared into thin air. I've called the main IRS number four times and got stuck in those soul-crushing automated loops every single time. After reading through all these success stories, I'm definitely going to try that collections number (800-829-0922) tomorrow morning. It's incredibly reassuring to see so many people getting their March payments resolved once they actually reach a human being. The fact that there's a known "reconciliation queue" issue explains everything - at least now I know I'm not crazy and this isn't some unique problem with my account. I've got my bank statement ready showing the payment cleared, along with all my confirmation numbers from when I set up the payment plan. Based on everyone's advice, I'm planning to call right at 8:30 AM and mention the March processing issue upfront. This thread has been a lifeline - it's amazing how this community figured out solutions that the IRS's own customer service system couldn't provide. I'll definitely report back once I get through. Thank you everyone for sharing your experiences and strategies!

I've been watching this thread develop over the past few days and I'm amazed at how you've all collectively solved what seems like an impossible problem! As someone who's been dreading making that IRS call myself, seeing all these success stories with the collections number has given me the courage to finally tackle my own payment issue. My situation is slightly different - I have a quarterly estimated tax payment that I made in March that's showing up as "pending" in their system but never got applied to reduce my balance due. I've been putting off calling because I expected the same automated nightmare everyone described with the main number. Based on all the successful experiences shared here, I'm going to try calling 800-829-0922 this Friday morning around 8:30 AM. I love how specific everyone has been with timing and documentation - it makes this feel actually doable instead of just hoping for the best. The professional insight from Javier about asking for both "unpostable" and "reconciliation" queues is particularly helpful. It's wild that we have to learn IRS internal terminology just to get our legitimate payments processed correctly, but at least now we have the roadmap. This community has turned what felt like an insurmountable bureaucratic nightmare into a manageable problem with clear solutions. Thank you to everyone who shared their experiences - you're literally saving people hours of frustration and stress!

Question for anyone who knows - if my employer already issued the 1099-R for the excess contribution and took out withholding, can I still get them to correct the W-2 instead? Or am I stuck with the double taxation situation at this point?

I went through almost the exact same situation last year with my 401k excess contribution! The confusion around company acquisitions and payroll transitions seems to create these issues more often than you'd think. From my experience, your instincts are absolutely correct - they should be correcting your W-2 from last year rather than issuing you a 1099-R for this year. Since you discovered and reported this in February (well before the April 15th deadline), you're entitled to the "return of excess deferrals" correction method that avoids double taxation. Here's what worked for me: I had to be very persistent and specific about citing IRS regulations. When I called my 401k administrator, I specifically mentioned IRC Section 402(g) and asked for their "excess deferral correction procedure for contributions identified before April 15th." I also referenced IRS Publication 525 which covers this exact scenario. The 20% withholding they took is standard for any distribution from a qualified plan, but if they do the correction properly, you'll get credit for that withholding and they should issue you a corrected W-2 showing the reduced contribution amount added back to your taxable wages for last year. Don't let them convince you that their way is correct just because it's easier for them administratively. You have the right to the proper correction method, and it will save you from paying taxes twice on the same money. Keep escalating until you find someone who understands the retirement plan rules - many HR generalists simply aren't familiar with these specific correction procedures.

I went through this exact same confusion last year! After reading through all these comments, I want to add that if you're still unsure about your specific situation, you can also check your final paystub from December. It should show year-to-date totals for various deductions including health insurance premiums. Compare what's shown on your paystub for health insurance deductions with what's in Box 14 of your W-2. If they match, then your employer is correctly reporting your pre-tax premium contributions in Box 14. This is totally normal and legitimate - you're not getting "screwed over" as someone mentioned earlier. The key thing to remember is that pre-tax health insurance premiums actually SAVE you money on taxes because they reduce your taxable income. So whether it's in Box 12 or Box 14, as long as those premiums were deducted pre-tax from your paycheck, you're benefiting tax-wise.

This thread has been incredibly helpful! I'm a CPA and want to emphasize a few key points for anyone still confused about Box 14 reporting: 1. Box 14 is NOT an error box - it's specifically designed for additional information that doesn't have a dedicated spot elsewhere on the W-2. 2. Health insurance premiums in Box 14 typically indicate they were deducted pre-tax from your paycheck, which actually BENEFITS you by reducing your taxable income. 3. The location of the reporting (Box 12 vs Box 14) doesn't change your tax liability. What matters is whether the premiums were deducted pre-tax or post-tax. 4. If you want to verify everything is correct, compare your Box 1 wages (federal taxable income) with your gross pay from your final paystub. The difference should include your pre-tax deductions like health insurance. For the original poster - your employer is likely doing everything correctly. Box 14 reporting for insurance premiums is very common and completely legitimate. You're not losing money on your taxes because of this reporting method.