I went through this exact same situation with a CP2000 notice showing different TP FIG and "per computer" amounts. The key thing to understand is that the IRS isn't necessarily right just because they have computers - they're working with the information that was reported to them by third parties (employers, banks, etc.). In my case, the discrepancy was because my employer had submitted a corrected W-2 that the IRS processed, but I had filed my return before receiving the correction. The "per computer" amount reflected the corrected information while my "TP FIG" was based on the original W-2. Don't panic about the $1,200 difference - these notices are designed to look scary but they're often resolvable. Since you mentioned the 1099 contract work, double-check if you reported it on the correct line of your return. Sometimes income gets reported in the wrong section (like Schedule C vs Schedule C-EZ) and the IRS computer flags it as missing even though you included it. My advice: gather all your tax documents, compare them line by line with what's on your filed return, and if you find the error is on the IRS side, respond with documentation. Most of these discrepancies get resolved in your favor once you provide the missing context.

I've been dealing with tax notices for years as a bookkeeper, and the confusion between "TP FIG" and "per computer" amounts is incredibly common. Here's what's happening in simple terms: Your "TP FIG" (Taxpayer Figure) is what you calculated and reported on your return - basically what you or Jackson Hewitt put down as your tax liability or refund amount. The "per computer" figure is what the IRS calculated based on all the tax documents they received about you (W-2s, 1099s, etc.). When these don't match, it usually means they have information that wasn't included on your return, or there's a reporting error somewhere. The $1,200 difference suggests this isn't just a small math error - it's likely a substantial piece of missing income or an incorrect deduction. Since you mentioned a 1099 from contract work, I'd bet that's the culprit. Even if you think you included it, double-check exactly how and where it was reported on your return. The "per computer" amount is generally what you'll need to address, but don't just assume the IRS is right. They make mistakes too, especially when employers or clients submit incorrect or duplicate forms. Take the time to verify their calculations before paying.

Has anyone tried just not checking the waiver box? I underpaid last year too (about 20k short) because of unexpected consulting income, and I just calculated and paid the penalty. It was like $700 on a $20k underpayment. Seems easier than trying to get a waiver approved.

I went through almost the exact same situation two years ago with stock sales! Here's what worked for me: I did include a written explanation even though my software didn't require it. I kept it simple and focused on three key points: (1) this was my first time dealing with significant investment income, (2) I wasn't aware of the estimated tax requirements for capital gains, and (3) I paid the full amount owed when I filed my extension before the deadline. The IRS accepted my waiver request. I think the key was showing that I acted in good faith by paying everything as soon as I realized the issue during tax prep. Don't just say "I didn't know" - emphasize that this was an unusual circumstance for you and that you corrected it promptly. If your software won't let you attach the explanation, you can either mail your return instead of e-filing, or e-file and then mail a separate letter referencing your return. I'd definitely recommend trying for the waiver since your underpayment sounds substantial and the penalty could be significant.

Has anyone used TurboTax to report RSUs with blackout periods? I'm trying to figure out how to input this correctly to avoid IRS issues.

I've been dealing with RSUs and blackout periods for about 3 years now, and it definitely gets confusing! Just to add to what others have said - the vesting date is indeed your acquisition date for tax purposes, but here's something that tripped me up initially: make sure you're getting the correct cost basis on your 1099-B forms. My brokerage (also Fidelity) sometimes reports the cost basis as $0 for RSU sales, which would make it look like the entire sale amount is taxable gain. But since you already paid income tax on the FMV at vesting, you need to adjust this. Your actual cost basis should be the fair market value on the vest date that was reported on your W-2. For the wash sale concern - yes, be very careful if you have quarterly vesting. I made the mistake of selling some underwater RSUs in November and then had new ones vest in December of the same stock. Had to deal with wash sale adjustments that were a real headache. Now I time any sales to avoid the 30-day window around vesting dates. One tip: keep really good records of your vest dates and the stock price on those dates. You'll need this info for years to come, especially if you hold shares long-term.

This whole section 751 thing is why I've avoided partnerships like the plague. The tax complexity is just insane. My brother had a similar situation last year and ended up getting an IRS notice because his accountant misclassified some gains that should have been ordinary income as capital gains. Anyone know if LLCs taxed as partnerships have the same issue? I'm considering investing in a friend's business but worried about the tax headaches down the road.

This is exactly the kind of situation where having a knowledgeable tax professional is crucial. From my experience working with partnership distributions and sales, the K-1 reporting varies significantly between partnerships - some are very thorough with section 751 information while others provide bare minimum details. One thing to keep in mind is that the partnership's final K-1 for you should include your ending capital account balance and basis information, which your accountant will need for the overall gain calculation. But as others mentioned, the specific section 751 ordinary income calculation typically falls on you and your tax preparer. I'd recommend gathering all your partnership agreements, any amendments, and previous K-1s showing your basis adjustments over the years. Your accountant will need this historical information to properly calculate both the section 751 ordinary income portion and the capital gain/loss on the remaining interest. The more documentation you can provide upfront, the smoother (and less expensive) the process will be.

CPA here. The issue is that lenders want to see a history of money actually flowing to you personally. Box 1 on your K-1 shows your share of business profits, but that doesn't necessarily mean you took that money home. Standard mortgage underwriting guidelines typically look at a 2-year history of distributions plus your W-2 wages from the S-Corp. The issue is that money left in the business (undistributed earnings) is at risk - you could lose it if the business fails, so lenders don't count it as stable personal income. My advice: Ask your accountant to provide a detailed analysis of both your W-2 income and actual distributions over the past 2 years. Also, look for lenders who specialize in self-employed borrowers or business owners. They often have more flexible underwriting for S-Corp situations.

Has anyone tried getting a loan through a credit union instead of a traditional bank? I've heard they sometimes have more flexible requirements for self-employed people and S-Corp owners. My brother-in-law got approved through his local credit union after being rejected by three banks.