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Just an FYI for anyone filing Form 8379 - make sure you're keeping really good records showing which spouse earned what income and had what withholding. My husband and I filed injured spouse last year and even though we submitted everything correctly, the IRS still needed additional documentation from us to prove which withholdings were mine vs his. Delayed our refund by 2 months!
That's really helpful advice, thanks! Did you need to submit anything beyond your W-2s to show the separate withholdings? I'm worried because I had some 1099 work this year in addition to my W-2 job, and my husband has only W-2 income.
For W-2s, those were sufficient since they clearly show whose income is whose. For your 1099 work, make sure you have documentation showing you're the one who performed the services - contracts with your name, invoices you sent, etc. The biggest issue we ran into was with joint bank accounts where taxes were withheld (like on interest or dividends). For those, we needed to show whose money was originally deposited that earned the interest. Bank statements showing deposits from each person's employer helped prove this.
I'm dealing with the exact same Form 8379 delay! Really appreciate everyone sharing their experiences here. I called the IRS myself last week (after waiting 3 hours on hold) and the agent confirmed this is happening across all tax software platforms, not just TurboTax. She mentioned that the delay is specifically because they're implementing new fraud prevention measures for injured spouse claims. Apparently there were issues last year with people incorrectly claiming injured spouse status to avoid offsets they were legitimately responsible for. The agent also told me that once filing opens up after March 17th, injured spouse returns will actually be processed slightly faster than previous years because of the system improvements they're making during this delay period. So hopefully the wait will be worth it in the end! One tip she gave me: make sure your Form 8379 allocation percentages add up to exactly 100% between you and your spouse. Even small rounding errors can trigger manual review and delay your refund by several additional weeks.
For next year, make sure you're tracking all your side gig income as you go! I use a simple spreadsheet to track all income sources, and I don't file until February so I have time for any late forms to arrive. I also keep a folder in my email specifically for payment confirmations from any contract work.
I use QuickBooks Self-Employed and it connects to my bank account to automatically track income. Definitely worth the subscription fee for avoiding this exact situation!
Just want to add - don't beat yourself up too much about this! It happens to more people than you'd think. I'm a CPA and I see this situation probably 10-15 times every tax season. The important thing is you caught it and are taking action to fix it. One thing I'd recommend is calculating roughly what you'll owe before you file the amendment so there are no surprises. With $8,945 in self-employment income, you're looking at about 15.3% self-employment tax ($1,369) plus regular income tax on top of that, depending on your bracket. This will help you plan for the payment. Also, consider making estimated quarterly payments for this year if you plan to continue any freelance work. The IRS gets cranky when you owe more than $1,000 at filing time without having made estimated payments throughout the year.
Thanks for the rough calculation - that really helps put things in perspective! I was dreading doing the math myself. Quick question: when you say "depending on your bracket" for the regular income tax portion, does that additional $8,945 get taxed at my current marginal rate, or could it potentially push me into a higher bracket? I'm trying to figure out if I should borrow money to pay this all at once or if a payment plan makes more sense financially.
The additional $8,945 will be taxed at your marginal rate first, but if it pushes you into the next bracket, only the portion above the bracket threshold gets taxed at the higher rate. Tax brackets are progressive, so you don't pay the higher rate on all your income, just the amount over the line. For example, if you're currently at the top of the 12% bracket and this income pushes you into 22%, only the portion that exceeds the 12% bracket limit gets taxed at 22%. Whether to borrow or use a payment plan depends on interest rates. IRS payment plans typically charge around 6-8% annually, so if you can borrow at a lower rate, that might be better. But if borrowing would stress your finances, the IRS payment plan is designed to be manageable and won't hurt your credit score like other debts might.
next year im avoiding tax prep fees completely and going strait to a CPA. This middle man stuff is for the birds fr
FAX NO PRINTER šÆ
I feel your pain! SBTPG had mine for 3 business days last month. What helped me was setting up account alerts with my bank so I'd get notified the second it hit instead of constantly checking. Also their website updates around 6pm EST each day if you want to track the status. Hang in there - it should come through soon! šŖ
I'm dealing with a very similar situation right now! Got my PayPal 1099-K showing about $67K in transactions, mostly from DraftKings and some peer-to-peer transfers for betting pools with friends. One thing I learned from my preliminary research is that you absolutely need to keep the friend transactions separate from your actual gambling activity. The IRS doesn't care about money that just flows through your account - they only want to tax actual gambling winnings. I'd definitely lean toward finding a CPA with gambling tax experience. I called around to a few tax preparers and was shocked at how many weren't familiar with the new 1099-K reporting requirements or how to properly handle online gambling situations. Also, start gathering your documentation now if you haven't already. Most sportsbooks let you download your complete betting history, which makes creating that detailed record much easier. Don't wait until tax season when you're stressed and rushing to get everything together. The good news is that if you truly had net losses for the year, you shouldn't owe tax on gambling income - but you still need to report everything correctly to avoid any red flags with the IRS.
This is exactly the kind of guidance I was looking for! I'm in a very similar boat with around $92K showing on my PayPal 1099-K. Your point about starting the documentation process early really resonates - I've been putting it off but realize I need to get organized before meeting with a CPA. Quick question: when you called around to tax preparers, what specific questions did you ask to gauge their experience with gambling taxes and 1099-K issues? I want to make sure I find someone who really knows this area rather than someone who's just going to wing it. Also, did you end up using any of the tools others mentioned here (like the AI transaction categorization services) or did you go the manual spreadsheet route? I'm trying to decide if it's worth investing in software to help organize everything or if I should just buckle down and do it myself. Thanks for sharing your experience - it's reassuring to know I'm not the only one dealing with this mess!
I'm in almost the exact same situation with my PayPal 1099-K! Just got mine showing $78K in transactions, mostly from FanDuel and BetMGM deposits/withdrawals, plus some money I handled for my cousin who doesn't have his own PayPal account. Reading through all these responses has been super helpful - I had no idea about the itemized deduction requirement for gambling losses. That's definitely going to change my approach since I usually take the standard deduction. One thing I'm still confused about though - if I had net gambling losses for the year but also received some promotional bonuses and free bets that I cashed out, how do those factor in? Are the promotional winnings considered taxable income even if my overall gambling activity resulted in losses? I think I'm going to follow the advice here and find a CPA who specifically handles gambling taxes rather than trying to figure this out myself. The peace of mind will be worth the extra cost, especially with the IRS being so strict about 1099-K reporting now.
LordCommander
Hey @Mele Uluiviti! Just to add to what others have said - you're definitely getting a refund! š The way to think about it is: Code 150 is what you owe in taxes, and codes 766 & 768 are credits being applied to your account. Since those credits (the negative amounts) are larger than what you owe, the difference becomes your refund. The 04/15/2023 date is just when the cycles process - it doesn't mean you have to wait until then to get your money. Usually refunds with those codes process much faster. You should see your hit your account within the next few weeks if everything processes smoothly. Keep checking your bank account and the "Where's My " tool on the website for updates!
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Emma Garcia
ā¢@LordCommander This is really helpful! I'm new to all this tax transcript stuff and was getting super confused by all the different codes. Just to make sure I understand - so the negative amounts on 766 and 768 are actually GOOD because they're credits being applied? I always thought negative meant I owed money or something was wrong. Thanks for explaining it in simple terms!
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Ethan Taylor
ā¢@Emma Garcia Exactly! You ve'got it right - negative amounts on codes 766 and 768 are actually credits working in your favor! Think of it like this: when you see a negative balance on a card statement, it means the company owes you money, right? Same concept here. The uses negative numbers to show credits being applied to your account. So code 766 usually (withholdings from your paychecks and) 768 earned (income with) negative amounts means those are reducing what you owe or creating a refund. It s'definitely confusing at first, but once you understand that negative "in" this context means credit, "it" all makes much more sense! š
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Jessica Suarez
@Mele Uluiviti Yes, you're absolutely getting a refund! š Here's the simple breakdown: Your code 150 shows your tax liability (what you owe), while codes 766 and 768 with negative amounts are credits being applied to your account - think of them as money the owes you. Code 766 is typically your withholding (taxes taken from paychecks) and 768 is your earned income credit. When you add up those negative amounts and they exceed your 150 liability, the difference becomes your refund! The 04/15/2023 date is just a processing cycle date, not when you'll actually receive your money. You should see your deposited much sooner than that. Keep checking "Where's My " on the website for the most up-to-date timing. Congrats on getting money back!
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Liam Brown
ā¢@Jessica Suarez This explanation is super clear! I m'in a similar situation and was stressing about those negative amounts thinking something was wrong with my return. It s'such a relief to know that negative = good when it comes to these codes. Do you happen to know roughly how long it usually takes for refunds to hit your account once you see these codes on your transcript? I filed about 3 weeks ago and just want to get an idea of timing. Thanks for breaking this down so well! š
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Kara Yoshida
ā¢@Liam Brown Great question! From my experience, once you see those codes on your transcript especially (the 766 and 768 with negative amounts ,)you re'usually looking at about 1-2 weeks for direct deposit. Since you filed 3 weeks ago and are seeing these codes, you re'probably in the final stretch! The typically processes refunds in the order they receive them, and seeing these specific codes means your return has been processed and approved. Keep an eye on your bank account over the next few days - many people see their refunds hit on Wednesdays or Fridays. You can also check the Where "s'My tool" for a more specific date once it updates. Hang in there, you re'almost there! š°
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