Oh crap I didn't even think about the state return. Is that a separate amendment process or can I do both at the same time?

You'll need to file separate amendments - one for federal (Form 1040-X) and one for your state. Each state has its own amendment form (usually called something like "Amended State Tax Return" or "[State] Form X"). Most tax software can handle both amendments together, generating all the required forms, but they're submitted separately. Your state amendment usually needs to reflect the changes you made on your federal amendment, so it's best to do the federal one first or at the same time.

Did they just send you a bill or did you get audited? I'm scared of triggering a full audit over something small.

It wasn't a full audit - just an automated notice (CP2000) basically saying "hey, we got this 1099 that doesn't match your return." They calculated what I owed and gave me the option to agree or disagree. Since the math was correct, I just paid it, but the interest and penalties made it way more expensive than if I had just amended originally. A full audit is different and much more intensive - this was just their computer systems catching the discrepancy.

Actually the IRS doesn't make interest on held refunds. That's not how government accounting works. They do these holds to prevent fraud, which is a massive problem.

@profile34 ok whatever you say mr irs man 🙄

Thanks for sharing your experience! It's really reassuring to hear from someone who went through the same thing. The waiting really is the hardest part - my mind keeps going to worst case scenarios even though logically I know I didn't do anything wrong on my return. Did you have to provide any documents during the ID.me process or was it just the online verification questions?

That's a really good point I hadn't considered. I make about $65,000 a year, and I've probably lost around $9,000 gambling this year (sadly). Would that raise red flags? Most of those losses were small amounts over many casino visits throughout the year.

That level of losses relative to your income likely wouldn't raise immediate red flags, especially since it's spread out over multiple visits rather than a few large losses. The IRS understands that people don't typically lose their entire gambling budget in one session. Just make sure you've got some supporting evidence beyond just the losing tickets - bank withdrawals at casino ATMs, credit card statements showing charges at gambling establishments, etc. The more documentation you have connecting your financial activity to your claimed gambling losses, the stronger your position would be if questioned. And remember, you're only claiming these losses to offset the winnings you already reported - you're not trying to generate a tax loss beyond that.

Does the player's card tracking actually work for slots too? I mostly play slots and video poker and wasn't sure if those machines track losses accurately.

Yes, player's cards track slot and video poker play very accurately! The machines record every spin, bet amount, and payout when your card is inserted. Most casinos can provide detailed win/loss statements that break down your activity by date, machine type, and even specific machine numbers. Just make sure to always insert your card before you start playing - I see so many people forget and then lose out on tracking their losses. Some casinos can even email you monthly statements automatically if you set it up, which makes tax time much easier. The win/loss statements from casinos are considered excellent documentation by the IRS since they're generated by the casino's computerized systems.

Check your Summary Plan Description (SPD) document - employers are required to provide this to all participants. It should list all contribution types allowed, including after-tax if available. Also look for terms like "in-plan Roth conversion" or "in-plan Roth rollover" in the document.

This is really helpful context! I'm in a similar situation where I think my employer contributions might be eating up most of the available space for after-tax contributions. One follow-up question - when you mention rolling traditional 401k contributions to a traditional IRA and then doing a Roth conversion, would that be subject to the pro-rata rule if I have other traditional IRA balances? And would there be any advantage to doing that versus just changing future contributions to Roth within the 401k (assuming my plan allows it)? Also, is there a typical timeline for when employers make their matching contributions? Like if they do it at year-end, would I potentially have more room for after-tax contributions earlier in the year?

This is really helpful info about checking state-specific processing times! I didn't realize there could be such a big difference between states. Do you know if there's a reliable website that tracks all the different state processing times, or do I need to check each state's tax department individually? I'm filing in Texas and want to make sure I have realistic expectations for when my refund will arrive.