Has anyone here actually been audited as a self-employed person? What was that experience like and how did you prepare?

Great thread! I'm in a similar situation - been freelancing for about 8 months now and definitely feeling overwhelmed by all the business structure options. Reading through everyone's experiences, it sounds like the consensus is that LLC formation is pretty straightforward, but the real decision point is whether to elect S-Corp status based on your income level. @Luca Russo - at $72k income, you're definitely in the sweet spot where S-Corp election could provide meaningful savings. From what I've read elsewhere, the general rule of thumb is that S-Corp makes sense when you're making $60k+ in profit, since the administrative costs and complexity start to pay for themselves at that level. One thing I'm curious about - has anyone dealt with quarterly estimated tax payments as an S-Corp? I'm already struggling to stay on top of those as a sole prop, and I'm wondering if the payroll requirements make that more or less complicated. Also really appreciate the tool recommendations in this thread. Always helpful to have resources that can run the numbers objectively rather than just getting generic advice.

I'm so sorry you're dealing with this stressful situation. The 45-day review process is unfortunately quite common, especially during peak filing season, and I know how frustrating it is when you're depending on that refund. From what you've described, this sounds like a routine verification rather than anything you did wrong. The fact that you filed the same way as previous years and your state refund went through without issues are both good signs. These reviews often get triggered by automated systems that flag returns for various reasons - sometimes it's just random selection, income verification, or confirming credits like the Child Tax Credit or EITC. A few things that might help while you wait: - Set up an IRS online account to view your transcript if you haven't already. It often shows more detailed codes than the "Where's My Refund" tool - Most of these reviews resolve much faster than 45 days - I've seen many people get their refunds in 2-4 weeks - If it does take longer than 45 days from your filing date, the IRS will automatically add interest to your refund The different explanations from phone reps are normal - they often don't have access to the specific details of why your return was flagged and are working from general scripts. Try not to read too much into the conflicting information. Hang in there - the vast majority of these reviews end with the refund being released without any issues. You're going to get through this!

I completely feel your pain and frustration - went through this exact nightmare in 2023 and it was absolutely devastating for my mental health. Filed early February, state came through fine, then federal got stuck in that awful 45-day review black hole. What really helped me cope was understanding that this happens to WAY more people than you'd think - the IRS just doesn't advertise how common these reviews are. In my case, it turned out they were verifying my dependent information even though I'd claimed the same dependents for years without any issues. The most important thing I learned is that the phone reps genuinely don't have access to the specific details of your case. They're looking at the same basic codes you can see in your transcript and giving you their best guess based on limited information. That's why you're getting different stories - it's not that they're lying, they just don't have the full picture. My review took exactly 28 days and my refund was deposited with no changes to the amount. The waiting was horrible but it did work out. Since you mentioned you have kids and really need this money, you might want to look into local emergency assistance programs or food banks to help bridge the gap while you wait. Check your transcript weekly for updates (code changes usually happen on Fridays), and try to remember that no news is usually good news with these reviews. You're going to get through this, and your refund will come. Hang in there!

Don't forget about the primary residence exclusion! If this was your brother's primary residence for at least 2 of the 5 years before the sale, he might qualify to exclude up to $250,000 of gain from his income (or $500,000 if married filing jointly). Based on what you described, he lived there for about 2 years before moving out 2 years ago, so he might just barely qualify if the timing works out exactly. This could potentially eliminate any tax liability from the sale, even if he has to report it.

This is definitely a tricky situation that requires careful documentation. From what you've described, your brother needs to report the sale even though he didn't receive proceeds from the actual sale, because he was still legally on the deed. The key is treating this as a two-part transaction: (1) the original buyout he received when they split up, and (2) the formal sale that just happened. On Schedule D, he should report the sale with his cost basis being the original purchase price plus improvements, and his proceeds being only the buyout amount he received years ago (not the recent sale proceeds). You'll definitely want to include a detailed explanation with the return describing the situation. Also, try to get documentation of the original buyout agreement if possible - this will support your position if the IRS has questions. One important thing to check: make sure you understand whether he received a 1099-S form. If he did, the IRS will be expecting to see this sale reported. If the ex-girlfriend also reports part of the sale, you want to make sure there's no double-reporting of the same income.

Has anyone used tax software to file casualty losses? I'm trying to use TurboTax for mine but it's not very clear on how to enter all this information.

I went through this exact situation after tornado damage to my property last year. One thing that really helped me was creating a detailed inventory with photos for each damaged item or area. For your basement flooding, document everything that was damaged - flooring, drywall, electrical work, etc. - and get separate repair estimates for each category. Since you mentioned you have receipts for $15,700 in repairs, make sure you're separating these by casualty event if the IRS requires it (your two separate storms). Each storm event gets reduced by $100, so you might want to check if combining them or keeping them separate gives you a better deduction. Also, don't forget that you can deduct costs for things like temporary housing, storage, or cleanup that were necessary because of the disaster. I missed claiming some of these expenses initially and had to amend my return. Keep every receipt related to the disaster - even seemingly small expenses can add up! The key thing I learned is that "fair market value" doesn't have to be a formal appraisal for most residential property. Your repair costs, contractor estimates, and before/after photos are usually sufficient documentation for the IRS.

I'm dealing with a similar situation right now! Based on all these responses, it sounds like there are really three main paths: 1) Use a specialized service like taxr.ai that can extract data from your original return PDF and auto-generate the 1040X, 2) Re-enter everything in commercial tax software that supports amendments (like TaxAct), or 3) Fill out the paper forms and mail them in. Given that you only need to add interest income, the automated extraction approach seems most efficient - especially since you already have your accepted return as a PDF. The time investment looks much better than re-entering everything or waiting months for paper processing. Has anyone else used similar automated services for simple amendments like this?

As a tax preparer, I can add some insight to this discussion. For simple amendments like adding missed interest income, the automated extraction services mentioned (like taxr.ai) do handle the cascading calculations properly - when you add interest income, the system will recalculate your AGI, taxable income, and tax liability automatically, just like professional tax software would. Regarding the explanation section on Form 1040X, most of these services do auto-populate basic explanations based on the changes detected. For example, if you're adding a 1099-INT, it might automatically write "Adding previously unreported interest income from [Financial Institution]" in the explanation field, though you can usually customize this. One important tip: make sure you have your original return's AGI handy when using any method, as the IRS uses this to verify your identity during electronic filing. Also, if the missed interest income is substantial enough to trigger additional tax owed, you'll want to include payment to avoid interest and penalties from the original due date. The electronic route is definitely worth the effort over mailing - paper amendments are taking 16-20 weeks to process currently versus 8-12 weeks for electronic submissions.