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Don't forget part-year resident returns! Since you moved to Idaho, you're a part-year resident there, and you were a part-year resident of the last state you lived in. Part-year returns can be tricky but they're designed to make sure you're only taxed once on each dollar you earn.
Thanks for mentioning this. I didn't even think about the part-year resident situation. So even though I haven't earned income in Idaho yet, I still need to file there as a part-year resident?
If you haven't earned any income in Idaho and don't have any Idaho-source income (like rental property there), then you generally wouldn't need to file an Idaho part-year resident return just for moving there. You'd only need to file in Idaho once you start earning income there. However, you should check if your last state of residence requires a part-year resident return to properly close out your tax obligation there. This is especially important if you had state tax withheld from your final paycheck in that state, as you'll want to file to potentially get a refund of any overwithholding.
I went through a very similar situation a few years ago when I worked in multiple states! One thing that really helped me understand the double taxation issue was checking whether any of the states you worked in have reciprocity agreements with each other. For example, if you lived in Pennsylvania but worked in a neighboring state with a reciprocity agreement, you might only need to file in your home state. However, since you worked in Wisconsin, Nevada, and Pennsylvania, you'll likely need to check each combination. Also, keep all your W-2s handy and look at Box 17 (State income tax) on each one. If you see state taxes withheld, that state will expect you to file a return there. The key is that when you file multiple state returns, each state's tax software should ask about taxes paid to other states - that's where you claim the credit to avoid double taxation. Since Nevada has no state income tax, that's one less return to worry about! But definitely file in Wisconsin and Pennsylvania for the income earned there.
Just a heads up - I filed my Robinhood taxes myself last year using Credit Karma Tax and it messed up some of my wash sales. I ended up having to file an amended return. Make sure whatever software you're using properly handles wash sales if you've bought and sold the same stock within 30 days!
As someone who went through this exact situation last year, I'd strongly recommend double-checking that whatever free tax software you choose can handle investment income properly. Some of the truly "free" versions have limitations when it comes to investment reporting. I started with IRS Free File and quickly realized it wasn't going to cut it for my Robinhood trades. Ended up using FreeTaxUSA which was free for federal (small fee for state) and handled everything including some tricky wash sales that Robinhood flagged on my 1099. The key thing is to take your time when entering the information. Don't rush through it - investment income can get complicated fast, especially if you had a lot of trades. And definitely review everything twice before submitting. Better to spend an extra hour double-checking than to deal with an IRS notice later!
Make sure you actually check with your company's payroll department before filing. There could be an error! Last year my W-2 had a $3,000 difference between boxes and when I asked payroll, they realized they made a coding error and had to issue a corrected W-2. Better to check than assume its correct!
This is good advice! My company made a similar mistake two years ago and issued a corrected W-2 in late March. I had already filed and had to amend my return. What a headache.
That's a good point - I just emailed our payroll person to verify. Better safe than sorry! Did you have to wait a long time for your corrected W-2? I'm hoping to file by end of February.
Another thing to consider is whether you have any pre-tax benefits that changed this year. I had the same confusion when I started using a dependent care FSA (flexible spending account) for my kid's daycare. The FSA contributions reduced my federal taxable wages in Box 1, but my state doesn't recognize dependent care FSAs as pre-tax, so those amounts stayed in my state wages in Box 16. Also check if you have any employer-paid life insurance over $50,000 - that gets added to federal wages but some states handle it differently. The good news is that TurboTax will handle all these differences correctly as long as you enter the W-2 exactly as printed. Just make sure to double-check that you're entering the right numbers in the right boxes!
Have you considered talking to a tax attorney before doing anything? Most give free consultations. I went through something similar (not reporting about 30k in gig work) and the attorney advised me on the best approach. In my case, they recommended filing amended returns rather than waiting for an audit. Cost me about $1200 for their help but they structured everything to minimize penalties. They also helped me set up proper tax planning for future years so I wouldn't be in the same situation again. Also worth noting - the risk isn't just the federal IRS. State tax agencies share data with the IRS and sometimes are even more aggressive about collections.
how long ago was this and did the irs accept your amended returns without further questions? i'm in a similar boat and nervous about drawing attention to myself.
This was about 3 years ago. The IRS accepted my amended returns without an audit, though they did send one clarification letter asking about the source of the additional income I was reporting. My attorney had me include a detailed explanation letter with the amended returns, which I think helped prevent further scrutiny. Was still nerve-wracking waiting to see if they'd come back with more questions, but ultimately they just processed the amended returns, charged the appropriate penalties and interest, and that was it. Just make sure you're 100% honest on the amendments - don't create a bigger problem by only partially coming clean.
I'm dealing with something similar and appreciate everyone sharing their experiences here. The stress of wondering "what if" has been eating me alive for months. After reading through all these responses, it seems like the consensus is pretty clear - coming forward voluntarily is almost always better than waiting to get caught. The penalties are lower, you avoid potential criminal charges, and you can actually sleep at night again. I'm curious though - for those who amended their returns, how did you handle the payment? Did you pay everything upfront or were you able to set up payment plans? The amount I'd owe is more than I can pay immediately, so I'm wondering what options the IRS typically offers for people in our situation. Also, has anyone here actually been audited for unreported income? I keep seeing advice about audit triggers and red flags, but would love to hear from someone who actually went through the audit process to understand what that's really like.
Ashley Simian
Has anyone found a way to speed up the videos in the training modules? They talk soooo slowwww and there's no 2x option that I can find. I'm dying of boredom here ๐ฉ
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Oliver Cheng
โขThere's a Chrome extension called Video Speed Controller that works on most video players! I used it for the entire training and it saved me hours. You can set it to whatever speed you want and it even works on their weird proprietary video player.
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Jamal Brown
I went through the Intuit certification process about 6 months ago and completely understand your frustration! The platform definitely has its quirks, but here are a few things that helped me get through it: 1. Make sure you're using a desktop/laptop rather than mobile - the interface works much better on a full browser 2. Clear your browser cache regularly - I had issues with practice exams not loading properly until I started doing this 3. Don't rush through the course modules. I know they're tedious, but they really do prepare you for the specific way Intuit phrases questions on the exam One thing that wasn't obvious to me at first: you can retake practice exams as many times as you want, so don't stress if you don't do well initially. I probably took each practice exam 3-4 times before I felt confident enough for the real thing. The certification exam itself was actually easier than I expected after all the practice - just make sure you read each question carefully since they can be tricky with wording. Good luck!
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