I'm actually a mortgage servicer employee (not naming the company for obvious reasons). These principal balance errors usually happen for one of three reasons: 1. Timing issues - the balance cutoff date for the 1098 might be different from what you're seeing online 2. Misapplied payments - extra principal payments sometimes get applied incorrectly 3. System synchronization errors - our customer-facing website sometimes pulls from a different database than our tax document system Definitely request a corrected 1098. Call and specifically ask for the "Tax Documentation Department" rather than general customer service. Most servicers have a dedicated team for tax forms that can help much faster. Also, if you've made extra principal payments during the year, specifically mention that when you call. That's the most common cause of these discrepancies and helps us identify the issue faster.

I went through this exact same situation two years ago and learned some hard lessons. My 1098 showed my principal balance was about $15k higher than reality, and I made the mistake of just ignoring it and filing my taxes with the correct numbers from my online account. Everything was fine until I got audited 18 months later. The IRS noticed the discrepancy between what I reported and what my 1098 showed. Even though I had screenshots and account statements proving the correct balance, it created unnecessary complications and延ed my audit process by several weeks. The auditor eventually accepted my documentation, but she strongly recommended that in the future I should always request corrected tax documents rather than just using alternative proof. Her exact words were "tax documents should match what you report, even if the error doesn't affect your tax liability." My advice: bite the bullet and get the corrected 1098. Yes, dealing with mortgage servicers is painful, but it's better than potentially explaining discrepancies to the IRS later. Document everything - your calls, emails, and the timeline of your correction request. This creates a paper trail showing you tried to fix the error in good faith.

Just to add something important - the IRS generally has 3 years from the filing date to audit your return, but for substantial underreporting (>25% of income), they can go back 6 years. And if they suspect fraud, there's no time limit. So even though this happened in 2021, don't ignore it! Responding quickly with a properly filed amended return is your best option. The worst thing you can do is nothing.

I'm dealing with a very similar situation right now! Got a CP2000 notice last week claiming I owe $8,500 from crypto trades in 2021 when I actually lost about $600. The scary part is how they calculate these numbers - they literally just take the "proceeds" from your 1099 and assume it's all profit with zero cost basis. What really helped me understand this was realizing that every time you trade one crypto for another (like Bitcoin to Ethereum), that counts as a taxable event. So if you made 50 trades, you could have $30k in "proceeds" even if you only put in $3k total. The IRS computer just sees that $30k number and thinks you made pure profit. I'm in the process of filing Form 8949 now to show my actual cost basis for each trade. It's tedious work but absolutely necessary. The good news is that once you properly report your actual gains/losses, these inflated tax bills usually disappear completely. Don't panic - this is fixable, but you do need to respond within the timeframe they gave you.

I work as a tax preparer and see this issue frequently during tax season. One additional cause that hasn't been mentioned is if there were any math errors or discrepancies on your return that required IRS adjustment. Even minor corrections (like a calculation error that changes your refund by just a few dollars) can trigger the system to switch from direct deposit to paper check. The IRS does this as a safety measure - if they had to make any changes to your return, they want to make sure you receive proper documentation with the check showing what was adjusted. This is different from the situations others mentioned and wouldn't show up in the typical verification issues. You can check if this happened by requesting your tax transcript from the IRS website (irs.gov) and looking for any adjustment codes. If you see codes like 290, 300, or 570, that indicates they made changes to your return which would explain the switch to paper check.

I experienced this same frustrating situation two years ago and ended up learning a lot about how the IRS direct deposit system works. One thing that helped me was checking my bank account online to see if there were any failed deposit attempts. Sometimes banks will show a record of rejected deposits even if the IRS doesn't clearly communicate this. In my case, it turned out my credit union had updated their routing number for electronic deposits but hadn't properly notified account holders. The old routing number I used still worked for other transactions but caused issues with the IRS system specifically. If you haven't already, I'd suggest calling your bank to confirm they haven't made any recent changes to routing numbers or account processing that might affect government deposits. Sometimes these changes happen behind the scenes and customers aren't always notified immediately. Also worth noting - once you receive the paper check, you can usually deposit it via mobile deposit if your bank offers that service, which can speed up access to the funds compared to waiting in line at a branch.

4 Don't forget about your 1099 situation if either internship classifies you as a contractor rather than an employee! That completely changes your tax requirements.

Great advice from everyone here! As someone who's helped many students through similar situations, I'd add that since you're making around $64,500 total, you'll definitely be in a higher tax bracket than what each employer assumes when calculating withholdings. One thing to watch out for - California has some of the highest state income taxes, so that January-May period will likely have more tax impact than you might expect. NYC also has city taxes on top of state taxes, though for a shorter period. Given that your parents are claiming you as a dependent, make sure they know about your income levels - it might affect their tax situation too, especially if they're getting certain credits that phase out with higher household income. You should coordinate with them before tax season to make sure everyone's on the same page.

Quick question - does anyone know if the W-8BEN form needs to be renewed? I'm also from India and submitted one 2 years ago but not sure if I need to do it again this year?

Just wanted to share my recent experience as another Indian citizen who struggled with the W-8BEN form! I was in the same boat a few months ago - totally confused about which lines to fill out and which ones I could skip. After reading through all the advice here, I ended up using a combination of approaches. First, I tried the taxr.ai tool that Clay mentioned, which was actually really helpful for understanding the form line by line. It specifically addressed my situation as an Indian nonresident alien. Then I had some follow-up questions, so I used Claimyr to get through to an actual IRS agent (took about 2 hours of waiting, but way better than my previous failed attempts). The agent confirmed that: - Line 4 (permanent residence) must be filled with your Indian address - Line 7 can use your PAN number - Part 3 can typically be left blank for individuals - For treaty benefits on line 9, you can claim both dividend and interest reductions if applicable The whole process was way less scary than I thought! My bank accepted the form without any issues. Hope this helps other Indian citizens who are dealing with this confusing form.