I was wondering this exact thing last year and called my accountant in a panic thinking I'd missed filing these 941 forms! She laughed and told me not to worry - sole props without employees just need Schedule C, Schedule SE for self-employment tax, and possibly estimated quarterly payments (Form 1040-ES) if you expect to owe more than $1000 in taxes. She said a super common mistake is confusing independent contractors (1099 workers) with employees (W-2 workers). With contractors, you don't withhold taxes or pay employment taxes, so no 941 needed!

Great question! As everyone has mentioned, you definitely don't need Form 941 as a sole proprietor with no employees. I went through the same confusion when I started my marketing consultancy. One thing I'd add that hasn't been mentioned yet - make sure you're keeping good records of those 1099s you're issuing to contractors. You'll need to file Form 1096 (Annual Summary and Transmittal) along with all your 1099-NEC forms by January 31st each year if you paid any contractor $600 or more. Also, since you mentioned being worried about missing important forms, consider getting familiar with Publication 334 (Tax Guide for Small Business). It's a comprehensive guide from the IRS that covers all the tax obligations for different business structures. Really helped me understand what applies to my situation vs. what doesn't. You're doing everything right with Schedule C and issuing 1099s to contractors. The IRS actually has a pretty clear distinction between employer obligations (Form 941, W-2s, payroll taxes) and business owner obligations (Schedule C, 1099s, self-employment tax). You're firmly in the latter category!

Pro tip: In the future, NEVER have your fees taken out of your refund! Always pay upfront with a credit card. When you choose to have fees deducted from your refund, your money goes through a third-party bank that charges additional fees and creates opportunities for "errors" like this. If you pay the tax prep fee directly, your refund comes straight from the IRS to your bank account with no middleman.

This is exactly why I switched to filing directly through the IRS Free File program last year. No middleman, no hidden fees, and your refund goes straight from the IRS to your bank account. I was tired of these tax prep companies finding creative ways to skim extra money. For your situation, definitely get your IRS transcript and document everything. The transcript will show exactly what the IRS sent and when. If there's a discrepancy between what they sent and what you received, you have TurboTax dead to rights. Don't let them drag this out - escalate immediately and threaten to file complaints with the CFPB and your state's attorney general if they don't resolve it within a week. These companies count on people not checking their math or giving up when they encounter resistance. Stay persistent!

Don't forget about state tax requirements too! I found out California recommends keeping records for 4 years from filing date, not 3. Different states have different rules.

Just wanted to add my experience as someone who went through an actual IRS audit last year. I kept 7 years of records and it was MORE than enough. The audit was for my 2021 return (filed in 2022) and they only asked for documents from that specific tax year - nothing older. The auditor told me that unless there's suspected fraud or you drastically underreported income (like 25%+ missing), they rarely need to go back further than the return they're examining. Most audits are triggered by specific items on a particular return, not patterns across multiple years. That said, definitely keep property records until you sell + 3 years like others mentioned. I still have my house purchase docs from 2019 and all improvement receipts because those will matter when I eventually sell. But for regular W-2s, 1099s, and basic tax documents? 7 years has been perfectly fine in my experience.

Check if these are actually from the IRS or Department of Treasury, or if they might be scams. Real IRS letters have a notice number (usually CP followed by numbers) in the upper right corner. If the letter just says "Department of Treasury" without specific IRS markings, be suspicious!

This is definitely a serious situation that needs immediate attention. Given the amounts involved ($22K and $123K) versus your actual income during college years, this screams either identity theft or a major IRS error. The fact that the letters cut off mid-sentence is also a red flag that something went wrong in their system. Here's what I'd do right away: 1. Call the IRS immediately using the number on the notices to get complete information 2. Request your tax transcripts for 2010-2011 online at irs.gov or by calling 1-800-908-9946 3. Pull your credit reports to check for any accounts or employment you don't recognize 4. Gather all your tax documents from those years (W-2s, 1099s, tax returns) Don't panic, but also don't delay. Even if this is completely wrong, ignoring it will only make things worse. The IRS has powerful collection tools, but they also have procedures to fix errors when they happen. You have rights as a taxpayer, and if this is identity theft or their mistake, it can be resolved - it just takes persistence and proper documentation.

I see so many of these stories lately! The IRS systems are completely overwhelmed and their error rate seems to be getting worse. One thing to consider if this doesn't get resolved quickly - the Taxpayer Advocate Service can help with these kinds of issues, especially when there's a risk of financial hardship. They're an independent organization within the IRS. Just remember to document EVERYTHING. Every call, letter, the name of every IRS employee you speak with, dates, times - create a paper trail so detailed that nobody can question your due diligence. It might seem excessive, but if this drags on, that documentation will be your best defense.

I'm glad to see you're making progress on this! Just wanted to add a few more tips that helped me when I dealt with a similar CP2000 issue: 1. When you send your written response, use certified mail with return receipt requested. This gives you proof the IRS received it and when. 2. Keep calling that same IRS number periodically to check on the status. Sometimes these cases get stuck in the system and a follow-up call can move things along. 3. If you haven't already, pull your Social Security earnings record from ssa.gov to verify what employers actually reported wages under your SSN. This can help identify if there are other discrepancies you're not aware of. The fact that they already identified it as a clerical error with someone else's information is a great sign. Usually once they acknowledge the mistake internally, the resolution moves pretty quickly. You should be in the clear soon!