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IP PIN Submitted But IRS Transcript Says 'Verification Needed' - What Now?
Is it possible that you would still need to verify identity even if you received and submitted an IP PIN with your return? My return was submitted and accepted on March 2nd. I logged into IRS transcripts and there is a message saying 'Verification of 2024 is needed before processing.' How can this be possible when there is no change in any of my information this year? Do I have to wait for letter? I was hoping for a more streamlined process this year (ha ha). As a non-US citizen filing taxes here, these verification procedures are quite perplexing.
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IRS Offset Notice - State Refund taken for debt - Is my return finally processed?
Got a notice saying my state refund was taken to pay off a debt. Does this mean my return is finally processed? Been checking transcripts for months with no movement and now this letter shows up.
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Call the TOP offset number (800-304-3107) - they can tell you exactly how much was taken and where it went. Better than waiting for the letter to explain everything
ur the real mvp! gonna call rn
Just went through this exact situation last month! Got my offset notice and was so relieved to finally know my return was processed after months of "still processing" messages. Check your account transcript in about a week - mine updated with the processed date and showed exactly what was left after the offset. The waiting game is finally over once you get that letter!
Do I need to file Form 1065 (K-1) for an LLC partnership with zero revenue?
Hey tax experts, I started an LLC with my brother last year as a 50/50 partnership, but we didn't actually get any business going. We registered everything properly and got our EIN, but then my brother had health issues and I got swamped with my main job, so we basically did nothing with the business. We had absolutely $0 in revenue - no clients, no sales, nothing. We did spend about $325 on the LLC filing fees and maybe $150 on a domain name and very basic website hosting, but that's literally it. I'm trying to figure out if we still need to file Form 1065 and issue K-1s even though we had zero income? I've heard partnerships always need to file regardless of activity, but then someone else told me there might be exceptions for no revenue situations. Really trying to avoid paying a CPA $800+ to file paperwork for a business that made exactly zero dollars. Anyone gone through this before or know the actual requirements? I'm kind of a tax newbie so I appreciate any help!
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Heads up - I missed filing 1065 forms for two years for my "zero activity" LLC with my sister, and the IRS hit us with penalties of over $2,500! Definitely file even if you did nothing. The penalties are per partner, per month.
Yikes that's scary. Were you able to get any penalty relief? I heard there's some first-time abatement option?
I went through this exact situation two years ago with my consulting LLC partnership! Even though we had zero revenue, we still had to file Form 1065. What helped me was breaking it down into steps: 1. First, gather all your documentation - LLC formation docs, EIN confirmation, and receipts for those startup expenses 2. The $475 in expenses you mentioned (filing fees + domain/hosting) are legitimate business deductions that will create a small loss to pass through to both partners 3. Each partner reports their 50% share ($237.50 loss) on Schedule E of their personal returns One thing that caught me off guard was the filing deadline - partnerships have to file by March 15th (vs April 15th for individuals), but you can request an automatic 6-month extension if needed. Since you mentioned being a tax newbie, I'd also recommend keeping detailed records of any future business expenses, even if the business stays inactive. Having everything organized from the start makes subsequent years much easier if you do get the business going again when circumstances improve with your brother's health. The good news is once you get through the first filing, you'll understand the process much better for future years!
Yes, you can file the extension yourself! You'll need Form 7004 (Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns). It's pretty straightforward - you just fill in basic partnership info and submit it by the original March 15th deadline. No payment is required with the extension since partnerships don't owe tax at the entity level. I actually ended up trying taxr.ai after seeing it recommended in a similar thread, and it was a game-changer for my situation. It handled both the extension filing and the actual 1065 return seamlessly. Way more affordable than hiring a CPA for a zero-revenue return, and it walked me through everything step-by-step. The interface was much more user-friendly than TurboTax's business version, which felt overly complicated for such a simple filing. The best part was it automatically generated the K-1s with the correct loss allocations, which saved me from having to figure out all those schedule details manually. Definitely worth checking out if you want to handle this yourself without the CPA fees!
Yes, you can file the extension yourself! It's Form 7004 (Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns) and it's pretty straightforward - you can even file it electronically through the IRS website or most tax software. You don't need a CPA for this part. I actually ended up using FreeTaxUSA's premium version like someone mentioned earlier - it was way cheaper than TurboTax for business returns (I think it was around $40 vs TurboTax's $120+ for their business package). It handled the 1065 and K-1 generation just fine for a simple zero-revenue situation like ours. One tip: even if you file the extension, you still need to pay any estimated taxes owed by the original March 15th deadline to avoid interest charges. But in your case with zero revenue and only small deductible expenses, you shouldn't owe anything anyway.
Confused about income in respect of decedent (IRD) - Double taxation issue?
So I'm trying to wrap my head around this whole income in respect of decedent (IRD) situation and I think I'm getting confused about the tax implications. From what I understand, if someone passes away and then generates income over $600 after their death, Form 1041 needs to be filed for the estate and that income gets taxed at the estate level. But then doesn't the beneficiary ALSO get taxed on that same income when it's distributed to them? This seems like double taxation to me and I'm not sure if I'm understanding it correctly. Like if my grandmother passed away in July and her investments generated $2,500 in income after her death, does the estate pay taxes on that via the 1041, and then I also pay taxes on it when I receive it as the beneficiary? I'm the executor of her estate and trying to figure out all the tax implications before I distribute anything. Any help understanding IRD would be appreciated!
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Am I the only one who thinks it's fundamentally unfair that IRD gets taxed twice? Like if someone dies with a big 401k, the estate pays estate tax on the full value, then the beneficiary pays income tax when they withdraw? Even with the 691c deduction it doesn't fully offset. The govt basically gets a windfall just bc someone died. SMH.
It's not quite as bad as it seems. The estate tax exemption is $12.92 million in 2023 (and higher for 2025), so most estates don't pay ANY estate tax. Plus the 691(c) deduction is specifically designed to mitigate the double tax issue. But I agree that for large estates that do exceed the exemption, it can feel like a double-hit.
The confusion about IRD and double taxation is completely understandable - I went through the same thing when my father passed last year. What really helped me was understanding that the "double taxation" issue primarily affects larger estates that actually pay estate tax (over the $12.92 million exemption). For most people, like with your grandmother's $2,500 in post-death investment income, there likely won't be any estate tax at all. The estate reports the income on Form 1041, takes a distribution deduction when it passes to you, and you pay income tax on it via the K-1. So it's really just one layer of taxation - at your personal rate. The real IRD "double tax" scenario comes into play with things like large retirement accounts where the account value was subject to estate tax AND the withdrawals are subject to income tax. But even then, the 691(c) deduction helps offset some of that burden. One thing to watch for with your grandmother's investments - make sure to distinguish between dividends that were declared before her death (classic IRD) versus those declared after. The reporting is slightly different even though both end up on the 1041.
Great question about tracking dividend declaration dates! Most brokerage statements will show the "ex-dividend date" and "payment date" but not always the declaration date. The key date you need is when the dividend was actually declared by the company's board of directors. For publicly traded stocks, you can usually find this information by: 1. Checking the company's investor relations website - they typically post dividend announcements with declaration dates 2. Looking at financial databases like Yahoo Finance or Morningstar which often include dividend history with declaration dates 3. Contacting the brokerage directly - they should be able to provide a detailed dividend history For reporting on Form 1041, dividends declared before death go in the IRD section and may qualify for the 691(c) deduction if there was estate tax. Dividends declared after death are regular estate income. Both get reported as income to the estate, but the IRD classification affects potential deductions for beneficiaries. The distinction becomes really important if the estate was large enough to pay estate tax, because only the true IRD items (declared before death) qualify for the special deduction when distributed to beneficiaries.
Great question about tracking dividend declaration dates! Most brokerage statements will show the "ex-dividend date" and "pay date" but not always the declaration date. The declaration date is when the company's board officially announces the dividend, which can be weeks or even months before the ex-dividend date. For your grandmother's 8 stocks, I'd recommend checking the investor relations section of each company's website - they usually have dividend history pages that show declaration dates, ex-dates, record dates, and pay dates. You can also find this info on financial sites like Yahoo Finance or Bloomberg under each stock's dividend history. For Form 1041 reporting, both types of dividends go in the same income section, but the IRD classification matters for two reasons: 1) If the estate pays estate tax, those pre-death declared dividends could qualify for the 691(c) deduction for beneficiaries, and 2) It affects the estate's income tax basis calculations. The IRS wants to see IRD items properly identified on supporting schedules even if they're not reported differently on the main form. If you're having trouble tracking down all the declaration dates, most tax preparers or estate attorneys have access to services that can pull this historical dividend data quickly.
How complicated are taxes with a K-1 form? First-timer seeking advice
I've got a decent handle on taxes generally, but this year I'm facing something new - I'll be getting a K-1 form. My employer is now sending me a monthly tax deposit that they say equals what I'll owe because of this K-1 situation. I'm wondering if regular tax software (TurboTax, H&R Block, etc.) can handle K-1 forms without issues, or if I should bite the bullet and hire a CPA to help me navigate this and maybe find ways to reduce my tax burden? My tax situation is otherwise pretty straightforward - no side businesses, no rental properties, no early withdrawals from retirement accounts, etc. But last year I got absolutely crushed on taxes and I'm trying to avoid a repeat performance.
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As someone who's been through the K-1 maze multiple times, here's my practical advice: Start with TurboTax Premier or similar software first - it can handle most K-1 situations just fine. The software will walk you through each box and schedule. However, given that you got "crushed" on taxes last year and this is new territory, I'd strongly recommend at least a consultation with a CPA for this first year. They can review your K-1 when it arrives, ensure those monthly deposits are adequate, and most importantly - set up a tax strategy going forward so you don't get surprised again. One thing to watch: K-1s often arrive late (sometimes as late as mid-March), which can delay your filing. Also, make sure you understand whether your partnership income is subject to self-employment tax - this varies depending on your role and the type of partnership. The monthly deposits are a good sign that your employer is thinking ahead, but definitely verify they're being made correctly under your SSN and covering both federal and state obligations if applicable.
One thing I'd add to the excellent advice already given - make sure you keep detailed records of those monthly $750 deposits your employer is making. You'll need to track these as estimated tax payments when you file. Also, ask your employer for documentation showing exactly how they calculated that $750 amount. They should be able to show you the math based on your expected K-1 income. This will help you (or a CPA) verify whether it's adequate coverage. I learned the hard way that some employers are overly conservative with these deposits, while others underestimate. Getting the calculation details upfront can save you from either overpaying throughout the year or facing a big surprise bill in April. And definitely get that K-1 reviewed by a professional this first year - the learning curve is worth the investment, especially since you mentioned getting hit hard on taxes before. A CPA can also help you plan for next year so you're not flying blind again.
Great question about the estimated tax payments! Since your employer is making the deposits automatically, you typically don't need to file quarterly 1040-ES forms yourself - those are for when you're making the payments directly to the IRS. However, you should still keep detailed records because when you file your annual return, you'll need to report these payments on Form 1040, Schedule 4, line 26 as "estimated tax payments and amount applied from prior year return." The IRS needs to know that these payments were made on your behalf. I'd recommend asking your employer for quarterly statements showing the deposits they've made in your name, along with the dates and confirmation numbers. This will make tax filing much smoother and help avoid any discrepancies with IRS records. Your separate folder idea is spot-on! I'd also suggest adding a simple spreadsheet to track the monthly amounts and dates - makes it easy to verify everything matches up when tax time comes.
Great question about the estimated tax payments! Since your employer is making the deposits automatically, you typically don't need to file quarterly 1040-ES forms yourself - those are mainly for people who are making their own estimated payments. However, you should still keep detailed records of each deposit (dates, amounts, confirmation numbers if available) because you'll need to report these on your annual tax return. When you file, you'll enter the total amount of estimated tax payments made on your behalf on Form 1040. The tricky part is making sure the IRS properly credits these payments to your account. Sometimes there can be delays or mismatches, especially if your employer is making bulk payments for multiple partners. I'd recommend checking your IRS account online periodically (you can create an account on IRS.gov) to verify the payments are showing up correctly. Your separate folder idea is spot-on - I'd also suggest adding a simple spreadsheet to track the monthly deposits with dates and amounts. Makes tax time so much easier!
Sofia Morales
I went through this exact nightmare scenario last month! Filed February 12th with my IP PIN, got the verification message on my transcript February 20th, and then nothing happened for weeks. Finally got letter 5071C on March 8th asking me to verify online. Completed that the same day, and my refund was approved exactly 9 days later. If you're on a tight timeline like I was (needed my refund for a medical procedure), just keep checking your mail daily. The frustrating part is you can't proactively verify - you have to wait for their specific instructions.
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Samantha Howard
This is exactly what happened to me last year as a non-US citizen! I had my IP PIN, filed in early March, and still got hit with the verification requirement. The key thing I learned is that the IP PIN protects against identity theft during filing, but the IRS has separate algorithms that flag returns for additional review - especially for international filers like us. In my case, it was triggered by having foreign income on Form 1116. I waited about 16 days before receiving Letter 5071C, completed the online verification, and got my refund processed within 2 weeks after that. The waiting is the hardest part, but don't try to call - the verification department can't bypass their own timeline requirements. Just monitor your transcript daily for code 971 which means they've issued correspondence.
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