Maybe Im just dumb here but im confused about something - if robinhood sent the 1099 to the IRS, wouldn't they have also sent it to your brother? Didn't he get any tax forms from them for 2021? Those forms should have all the info he needs to fix this

This is exactly why I always tell people to be super careful with crypto taxes from day one. The IRS has been cracking down hard on unreported crypto transactions, and they have access to all the 1099 forms from exchanges. One important thing to add - when you file that amended return, make sure to include a detailed explanation letter with it. The IRS processors appreciate context about why you're amending, especially when there's such a big discrepancy. Something like "Originally failed to report cryptocurrency transactions due to misunderstanding of reporting requirements. Amended return includes complete Schedule D with all crypto transactions and correct cost basis." Also, don't panic about the timeline. You generally have 3 years from the original filing date to amend a return, so you're well within that window for 2021. The IRS will recalculate everything once they process your amendment, including removing those penalties and restoring the earned income credit. The good news is this is totally fixable, and you're definitely not the first person to go through this exact situation!

Just want to add another perspective on the health insurance piece - we handled this by having our LLC reimburse partners for their actual health insurance costs rather than paying the premiums directly. This way it shows up as a business expense for the LLC and reduces the taxable income allocated to all partners proportionally, rather than creating guaranteed payment income for just the insured partners. At year-end, we adjust distributions to account for these reimbursements so everyone ends up with their intended net amounts. Partners who got health insurance reimbursements receive smaller cash distributions, while others get larger ones. This approach has worked well for us and keeps the tax treatment simpler since there are no 1099s to deal with. Your operating agreement should definitely include flexible distribution language as others mentioned. We use wording that allows distributions "in such amounts and proportions as determined by unanimous consent of the members, which may differ from membership percentage interests." Having this flexibility built in from the start saves you from needing amendments later.

This thread has been incredibly helpful! I'm dealing with a similar situation in my 3-member LLC where we want flexibility for unequal distributions based on varying time contributions and expenses. One thing I haven't seen mentioned yet is how these distribution decisions affect your capital accounts for tax purposes. When you do disproportionate cash distributions, you need to make sure your capital account tracking reflects the actual economic arrangements, not just the cash flow. Our tax preparer explained that if your capital accounts get out of whack with the underlying economics, it could cause issues with loss limitations or if someone exits the partnership later. We ended up having to maintain detailed capital account records that track both the tax allocations (which stay proportional to ownership) and the actual cash distributions. Also want to echo what others said about state law - definitely check your state's requirements. Some states have restrictions on distributions that could impair the LLC's ability to pay debts, so you want to make sure your distribution policy doesn't run afoul of those rules. The operating agreement language is crucial. We added a section that specifically allows distributions to be made "in amounts and at times as may be determined by the members, taking into account the business needs of the Company and the individual circumstances of the members." This gives us flexibility while making it clear that business considerations come first.

Same boat here! Filed 2/3 and Oregon site says deposit on the 15th. Using Varo and they usually drop deposits 2 days early but nothing yet. Really hoping it hits tomorrow or Tuesday 🤞 The waiting game is brutal when you're counting on that money!

I'm still waiting too! Filed on 2/5 with Credit Karma Money and they usually do early deposits but nothing yet. The anticipation is killing me 😅 At least it sounds like some Cash App users are getting theirs early which gives me hope. Maybe tomorrow will be our lucky day!

I'm dealing with a similar CP134R situation right now and this thread has been incredibly helpful! Just wanted to add that when you file the 941-X, make sure to check Box 1 on line 1 to indicate it's correcting an error on a previously filed return. Also, in Part 2 where you explain the corrections, be very specific about what the IRS entered incorrectly vs. what the correct amounts should be. One thing I learned from my tax preparer is to also include a copy of your original 941 along with the 941-X so they can easily see the discrepancy. It might seem redundant since they should have it on file, but given that they made the data entry error in the first place, having a clean copy attached can speed up the process. Also, don't forget to sign and date the 941-X - sounds obvious but it's easy to miss when you're stressed about the whole situation!

This is such a frustrating but unfortunately common issue! I went through something very similar last year where the IRS had transposed two digits in my wage amount on a 941. What really helped me was creating a simple comparison chart showing their incorrect entry vs. my actual filing vs. my EFTPS payment history - all side by side. When I sent in my 941-X, I included this one-page chart as an attachment along with screenshots from my EFTPS account showing the payment dates and amounts. It made the discrepancy crystal clear for whoever was processing my correction. I think having that visual comparison really helped speed things up because I got my corrected account statement back in about 10 weeks instead of the 16+ weeks they initially quoted me. Also, pro tip: when you void the refund check, write "VOID - DATA ENTRY ERROR - SEE ATTACHED 941-X" across it. That extra context might help the person processing your return understand the situation immediately without having to dig through files.

atleast ur helping ur kids out. had same situation last year, rest came like a month after offset

Been through this exact situation before. The offset process can be confusing but you'll definitely get your remaining $4k. Just keep monitoring your transcript for code 766 (credit to your account) and code 898 (offset). Once the offset processes, you should see the remainder deposit within 2-4 weeks. The wait is annoying but at least you know the money is coming!