A common mistake people make with homestead exemptions is not realizing that you need to reapply when you refinance your mortgage. The title company might not tell you this! When I refinanced two years ago, I lost my exemption and had to reapply.

I went through a similar denial situation last year and want to share what worked for me. The key thing I learned is that "documentation insufficient" often means they need proof of continuous occupancy, not just ownership. What ultimately got my appeal approved was creating a timeline document that showed my occupancy from day one. I included: utility connection dates (gas, electric, water, internet), my first grocery delivery receipt to the address, photos of me moving in with timestamps, and even my employer's records showing when I updated my address for payroll. The county assessor told me later that many people just submit a driver's license and deed, but they really want to see that you were actually living there as your primary residence during the required time period. They're looking for patterns of daily life, not just legal ownership. Also, don't be afraid to be persistent with the appeal process. My first appeal was also denied, but I submitted additional evidence and got approved on the second try. The $2,200 savings you mentioned is definitely worth the effort - that's real money that stays in your pocket every year going forward.

Has anyone tried just calling the state tax department directly? I had a similar issue and the NJ tax department gave me a generic number to use for out-of-state employers without NJ registration. It was something like "9999999" that basically told their system "yes, this employer exists but doesn't have a state ID.

I work for a state tax department and can confirm that this is a very common situation that we see all the time. The key thing to understand is that your employer's lack of a state ID in your resident state doesn't affect your tax filing obligations at all. Here's what you need to know: 1) You're still required to report all your income to your resident state regardless of where your employer is located, 2) Most tax software will let you leave the employer state ID field blank or you can enter "N/A" or "NONE", 3) Your state return will process normally without this information. The real issue you should be focusing on is whether your employer withheld the correct amount of state taxes for your resident state. If they didn't withhold any state taxes because they're not registered in your state, you might owe a significant amount when you file. I'd recommend checking your paystubs to see what state taxes (if any) were withheld throughout the year. If you need to speak with someone at your state tax department about this, most states have dedicated helplines for wage and withholding questions. They can give you the exact guidance for your specific state's requirements.

Has anyone else gotten a CP2000 notice before? I had a similar situation last year where I forgot to report some income. Return was accepted no problem, then 8 months later I got a CP2000 notice saying they found a discrepancy between what I reported and what was reported to them. They automatically calculated the additional tax I owed plus interest.

Just to add some perspective - your $750 in unreported income probably won't trigger a major issue, but it's definitely worth addressing proactively. The IRS gets copies of payment records from apps like Venmo, PayPal, Square, etc., so if any of those cash payments went through digital platforms, they likely already have that information. Even if it was all truly cash with no paper trail, filing an amended return shows good faith effort to comply. The additional tax on $750 of self-employment income would probably be around $100-150 depending on your tax bracket, plus maybe some interest. Much better to handle it yourself than wait and potentially face accuracy penalties later. I'd recommend keeping better records going forward - even a simple spreadsheet or phone notes can help track cash payments as they happen. Makes tax time so much less stressful!

Has anyone considered if they actually filled out a 1099 form instead of a W4? Sometimes insurance companies mess up paperwork. If you filled out a W4, they should be giving you a W2, not a 1099. Might be worth calling them to clarify.

Thanks for the update Omar! That clears up the W-4/1099 confusion. Since the insurance company has confirmed you're classified as an independent contractor, you're definitely on the right track with Schedule C filing. One thing I'd suggest is requesting a corrected 1099-MISC if there were any periods where you should have been treated as an employee vs. contractor, especially if the classification change happened mid-year. This could affect your tax liability since employee wages have different withholding requirements. Also, make sure to set aside money for quarterly estimated taxes going forward if you continue this work - as a contractor, you're responsible for paying taxes throughout the year rather than having them withheld. The IRS expects quarterly payments if you'll owe more than $1,000 in taxes. Good luck with your filing!

Has anyone actually been audited over this specific issue? I'm in the same boat (S-corp with rental property, managed by property management company) and my CPA says no W-2 needed either. Just wondering if this is something the IRS actually targets or if it's more theoretical risk?

I'm dealing with the exact same situation and honestly, the conflicting advice is driving me crazy! My S-corp has a rental property that's fully managed by a property management company, and I literally just sign the annual tax forms and pay insurance. That's it. My CPA insists no W-2 is needed since I'm not materially participating in the business operations, but then I read horror stories online about people getting audited and owing back taxes. The gray area nature of this rule is so frustrating. What's really concerning me is that even if my CPA is technically correct, will the IRS see it the same way during an audit? I'm starting to think it might be worth just taking a small salary (maybe $2-3k annually) just to have documentation that I'm following the rules, even if it's not technically required in my situation. Has anyone found any definitive IRS guidance specifically about S-corps with fully managed rental properties? The general "reasonable compensation" rules seem to be written more for active businesses, not passive rental investments.