I found out the hard way that even if the broker doesn't report it, the IRS can still come after you! I had some old IBM stock from my grandpa that I sold in 2022, and the gain wasn't reported by my broker. I thought "cool, free money" and didn't include it on my taxes. Got a CP2000 notice six months later saying I owed taxes plus penalties and interest. The broker not reporting it to the IRS doesn't mean the IRS won't find out eventually, especially if the amounts are substantial. Better to report everything properly the first time!

This is such an important topic that catches so many people off guard! I went through the exact same confusion last year with my Schwab account. One thing I'd add to the great advice already given is to keep really detailed records of ALL your transactions, especially the ones not reported to the IRS. I started using a simple spreadsheet to track purchase dates, sale dates, and cost basis for everything - even when my broker has the info. This saved me so much time during tax prep. Also, if you're dealing with inherited securities or stocks transferred from another brokerage, those are prime candidates for being "not reported to IRS" on your 1099-B. The receiving broker often doesn't have the original purchase information needed for proper cost basis reporting. One last tip - if you're unsure about any complex transactions, consider getting help from a tax professional for this year. The cost is usually worth it to avoid potential penalties down the road, and you'll learn the process for handling it yourself in future years. Tax compliance stress is real, but you're asking the right questions!

Has anyone used the "Reasonable Cause Statement" approach when filing Form 2553 late? What kind of language actually works?? I'm in a similar spot and need to file under Rev. Proc. 2013-30 but worried about getting rejected.

I went through this exact same situation two years ago and can share what worked for me. With your income level at $230k, the S-corp election will likely save you significant money even for just one month - potentially $4-6k in self-employment tax savings. Here's what I'd recommend: File Form 2553 immediately using Rev. Proc. 2013-30 relief. For the reasonable cause statement, keep it straightforward - something like "Taxpayer was unaware of the election deadline and filing requirements but intended to elect S-corp status upon learning of the tax benefits." For payroll, you'll need to establish a reasonable salary for December. With your income, aim for around $7-8k for December (roughly $90-100k annualized). Yes, it's a hassle to set up payroll for one month, but the tax savings usually outweigh the setup costs. One thing others haven't mentioned - make sure you have adequate business bank account records showing clear separation between business income and personal draws. The IRS will want to see that you've been operating as a legitimate business entity. The key is acting quickly since you're already in December. Even if it feels rushed, the potential tax savings make it worthwhile for your income level.

According to 31 U.S.C. § 3720D and the implementing regulations at 31 CFR § 285.5(d)(6)(ii), the creditor agency MUST send notice at least 60 days before the offset occurs. This notice requirement is not waivable except in very limited circumstances outlined in subsection (iii) of the same regulation. I'm surprised more people don't challenge offsets on procedural grounds! If you can prove you didn't receive proper notice (by showing all mail received in the relevant timeframe), you have a strong case for immediate reversal while they investigate the notification failure. The Taxpayer Advocate Service can also assist with this specific issue as it represents a significant financial hardship combined with a procedural error by the agency. I never realized how complex this system was until I went through it myself!

I'm so sorry you're dealing with this stress right now! As someone who went through a similar situation with my tax refund being offset without proper notice, I wanted to share what worked for me. The lack of notification is actually your strongest point here - that's a clear procedural violation that you can use to your advantage. I'd recommend taking a two-pronged approach: 1. **Immediate action**: Call the Department of Education at 800-621-3115 and specifically mention you're military family dealing with PCS orders and received NO advance notice. Ask to speak with someone about expedited hardship relief due to military status. 2. **Documentation**: Start gathering everything now - your lease agreement for the April 1st move, any documentation about your vehicle situation, bank statements showing your financial position, and proof you didn't receive the required notices. The military angle really does help - I've seen it make a huge difference in processing time. Also, don't be afraid to mention the word "eviction risk" or "inability to secure housing" when describing your situation, as those seem to trigger faster responses. Keep calling if you get pushback. Sometimes you need to speak with 2-3 different representatives before finding one who understands the urgency of military family situations. Hang in there - this is fixable! 💪

I'm dealing with a very similar situation with my grandmother who moved in with us last year. She's married to my grandfather and they want to file jointly, but I'm covering most of their living expenses since they're on a fixed income from Social Security. After reading through all these responses, it sounds like the key is whether they would have zero tax liability if filing separately. In my case, their combined Social Security is about $16,000 annually, so they likely wouldn't owe any taxes filing separately either. One thing I'm wondering about - do I need to calculate the support test for each parent individually, or can I look at their combined expenses? For example, if I'm paying $1,200/month for their housing costs, do I split that between them when calculating whether I provide more than 50% support for each one? Also, has anyone had experience with the IRS accepting utility bills and grocery receipts as documentation? I've been keeping everything, but I want to make sure I'm tracking the right types of expenses in case I get audited.

I've been through this exact scenario with my parents who moved in with me two years ago. The good news is that you can absolutely claim your mother as a dependent while your parents file jointly, as long as they meet that joint filing exception everyone mentioned. One piece of advice I wish I'd gotten earlier - start documenting your support contributions NOW if you haven't already. I learned this the hard way when the IRS requested documentation. Create a simple monthly expense tracker that includes: - Housing costs (use fair rental value for the space they occupy - I calculated what a 2-bedroom apartment would rent for in my area and divided by the bedrooms in my house) - Utilities (divide by number of household members) - Food expenses (keep grocery receipts and estimate what portion goes to them) - Medical expenses you pay on their behalf - Transportation costs if you drive them places - Any other support like clothing, personal care items, etc. The 50% support test can be tricky to calculate, but with your parents' income at $13,500 combined, you're likely well over the threshold. Just make sure you're calculating it correctly - their total support includes what YOU provide plus what THEY provide for themselves from their own income. Also, don't forget that claiming them as dependents might make you eligible for additional tax benefits beyond just the dependency exemption. If you're paying medical expenses for them, that could potentially push you into itemizing territory depending on your other deductions. Good luck with your tax situation!

Something nobody's mentioned yet - your HSA administrator sends Form 5498-SA to the IRS reporting your contributions. They also send Form 1099-SA reporting any distributions. If you don't file Form 8889, the IRS will see those forms without your explanation of how the money was used, which could trigger questions. I learned this the hard way when I skipped filing 8889 for two years and got a letter from the IRS asking about my HSA distributions. Had to prove they were all for qualified medical expenses after the fact, which was a pain collecting old receipts. Better to just file the form each year!

This thread has been incredibly helpful! I'm in a similar situation - had an HSA since 2020 but never filed Form 8889. All my contributions were through payroll deduction and properly excluded from my W-2, but I'm now worried about the IRS matching issue that @cc288379ec13 and @1fb7c9e34a09 mentioned. My HSA provider definitely sent those 5498-SA and 1099-SA forms to the IRS each year, so there's a paper trail of my contributions and distributions without my Form 8889 to explain them. I used all distributions for qualified medical expenses and still have most of the receipts, but I'm wondering if I should be proactive and file amended returns now or wait to see if the IRS sends a letter. Has anyone else dealt with this situation where you realized years later that you'd been missing Form 8889? I'm trying to decide between paying a tax pro to amend 3-4 years of returns versus taking the risk that the IRS might not notice or care since my W-2 was handled correctly.