I got the same email and was panicking too! Thanks to everyone who shared their experiences here - it really helped calm my nerves. I decided to check my 2018 return by manually comparing my W-2s to what was imported into TurboTax, and thankfully everything matched up correctly. For anyone still worried about this, the key takeaway seems to be that even if there was an error, the 3-year statute of limitations has passed for most 2018 returns (unless you had major underreporting). So while it's worth checking for peace of mind, you're probably not going to get hit with surprise back taxes at this point. The bigger concern would be if you overpaid and missed the window to get that money back, but there's nothing you can do about that now. Really appreciate all the helpful info from the tax professionals in this thread!

I'm an enrolled agent and wanted to add some clarity here. The TurboTax notice is legitimate - they discovered their W-2 import feature had bugs that affected some 2018 returns. The most common issues I've seen are incorrect withholding amounts in boxes 2 and 17, and problems with box 12 codes (like retirement plan contributions). For most people, you're protected by the statute of limitations at this point. However, I'd still recommend doing a quick manual comparison of your actual W-2 against what's showing in your 2018 TurboTax return, especially if you remember having multiple W-2s or complex box 12 entries that year. If you do find discrepancies, don't panic. Document what you find, but remember that for routine errors on 2018 returns, both the IRS collection period and your refund claim period have likely expired. The peace of mind from knowing your situation is usually worth the 15-20 minutes it takes to check.

DONT CALL THE IRS PHONE NUMBER its completely useless. Waited 2 hours just to be told they cant help me. Do the online verification if u can

Just went through this whole process myself! Got the 5071C letter about 3 weeks after filing. The ID.me verification was actually pretty smooth - took maybe 20 minutes total. Had to upload my driver's license and take a selfie, then they did a video call to verify my identity. After that, it was a waiting game. My refund finally showed up 7 weeks later. Pro tip: keep checking your transcript every Friday - that's when they usually update with new processing dates. Hang in there!

im in exactly the same boat as u right now lol. verified last thursday, status changed yesterday. from the research I've done, the change in wording is definitely step 1 of good news. Now we just gotta wait til our cycle days (I'm 05 too). Hoping we both wake up to good news tmrw!!!

This is exactly what happened to me! Filed in March, stuck on "still processing" forever after getting the dreaded ID verification letter. Finally verified online and within 4 days saw that same status change to "being processed." My transcript was still blank too at first, which had me worried. But sure enough, on my cycle day (Thursday morning) my transcript updated with all the codes including my DDD. Got my refund deposited exactly 5 business days later. The status change really is a good indicator that your verification went through and your return is moving again. Hang tight - Thursday morning should bring good news for you!

Quick tip - make sure you're tracking business use vs personal use percentages for that equipment! The IRS can be picky about this. If you use the equipment 80% for business and 20% for personal, you can only deduct 80% of the cost.

Great question! As someone who just went through this exact situation with my small consulting business, I can confirm what others have said about Schedule C being the way to go. One thing I'd add - keep detailed records of when you placed the equipment in service for your business. The IRS cares about the "placed in service" date, not just the purchase date. So if you bought equipment in November but didn't start using it for business until December, that December date is what matters. Also, since you're new to business expenses, consider keeping a simple spreadsheet or log of all business-related purchases throughout the year. It makes tax time so much easier when you have everything organized ahead of time. I learned this the hard way my first year when I was scrambling to find receipts in March! The Section 179 deduction is definitely your friend here - being able to write off that full $1,800 immediately rather than depreciating it over several years will give you a nice tax benefit this year when your business is still growing.

Slight tangent but might be useful - watch out for the "substantially equal periodic payments" rule getting confused with the rollover rule. My advisor messed this up for me. I thought I could take out regular payments from my IRA without penalty using the 72(t) SEPP program AND do a 60-day rollover in the same year. Turns out doing a rollover terminates your SEPP plan and triggers penalties on ALL previous distributions. Cost me thousands in surprise taxes. Just mentioning this because sometimes when people are looking at ways to access retirement funds early, these different rules get mixed up.

Great question about Roth IRA rollovers! I've been through something similar and learned the hard way about the complexity of these rules. One important detail I haven't seen fully addressed - when you withdraw from a Roth IRA, the IRS considers withdrawals to come from contributions first (FIFO - first in, first out). So if you've contributed $20,000 over the years and your account is worth $25,000, your first $20,000 withdrawn would be considered contributions and wouldn't face the 10% penalty regardless of the rollover. However, once you hit the earnings portion (that $5,000 in my example), those ARE subject to the 10% penalty if you're under 59½ - unless you complete a valid 60-day rollover or qualify for an exception. The tricky part with your dual withdrawal scenario is that even if both withdrawals combined stay within your contribution basis, you still can only do ONE rollover per 12-month period. So if something goes wrong and you can't complete the rollover for any reason, you'd want to make sure your total withdrawal amount doesn't exceed your contribution basis to avoid penalties on earnings. I'd strongly recommend getting documentation from your IRA custodian showing exactly how much you've contributed versus earned before making any withdrawals. This gives you a clear picture of your penalty-free withdrawal capacity.