Just wondering if anyone has tried Credit Karma Tax? I've been using it for the past two years. It doesn't have a fancy "find all deductions" feature, but it's FREE and does ask a pretty comprehensive set of questions. Found a few deductions I didn't know about last year.

As someone who's been doing my own taxes for over a decade, I can relate to this struggle! The frustrating thing is that you're absolutely right - there ARE tons of deductions buried in the tax code that most people never discover. I've found that the best approach is actually a combination of tools rather than hoping for one perfect app. I use TurboTax for the basics, then cross-reference with IRS Publication 17 (it's free online) which lists pretty much every individual deduction with examples. It's dry reading but worth it. Also, don't overlook state-specific deductions! Many apps focus on federal but miss local opportunities. For example, my state has deductions for energy-efficient home improvements that saved me $300 last year. The taxr.ai recommendation from Keith sounds promising though - might have to check that out before next tax season. An AI that actually cites tax code sections would be a game changer.

Little-known fact: if you e-file, the IRS actually gets digital copies of your W-2s directly from your employer in most cases! That's why e-filing is less prone to these kinds of errors. The W-2 attachment requirement is mainly for paper filing. If you do need to paper file again, remember to sign in BLUE ink (makes it easier for them to identify original signatures vs photocopies) and attach all W-2s with paper clips, not staples.

One thing that helped me when I had a similar situation - make sure to double-check that all your W-2 information is entered correctly in TurboTax before you e-file. Even a small typo in the employer name or wage amounts can cause issues. Also, since you mentioned this is your first time filing independently, here's a helpful tip: after you e-file, you should get email confirmations from both the IRS (for federal) and Illinois (for state) within 24-48 hours confirming your returns were accepted. If you don't get those confirmations, log back into TurboTax to check the status. Don't stress too much about the delay - getting your return sent back actually happens to a lot of people, especially first-time filers. The important thing is you caught the mistakes and can fix them now!

Did you submit your reasonable cause statement via certified mail with return receipt? This is crucial for dealing with the IRS, especially for something with potential large penalties like Form 3520. If you didn't, you have no proof they actually received your materials. I learned this the hard way when the IRS claimed they never received my response to a similar issue. Now I send everything certified and keep a copy of EVERYTHING. Its annoying but worth it.

I went through almost the exact same situation with Form 3520 penalties for educational gifts. After 9 months of silence, I finally got through to the IRS and learned that my case was actually resolved months earlier - they had accepted my reasonable cause statement but never sent confirmation due to what they called a "correspondence processing error." The key thing that helped me was getting my Statement of Account (different from regular transcripts) which showed the internal case activity. You can request this by calling and specifically asking for a "Statement of Account for Form 3520 submissions" - it shows processing codes that regular transcripts don't include. Also, I'd recommend documenting everything from this point forward. Create a timeline of all your submissions, the May 28th letter, and any attempts you've made to contact them. If you do end up needing to escalate to the Taxpayer Advocate Service, having this documentation ready will speed up the process significantly. The fact that you haven't received any penalty assessment notices after 10 months is actually encouraging - in my experience, the IRS is pretty quick to send penalty notices when they're rejecting reasonable cause statements.

Everyone saying "report all your cash tips" must not work in the industry 😂 nobody reports 100% of cash tips and we all know it. But definitely report your credit card tips since those are tracked. For real tho, all my server friends have been talking about this no-tax tip thing and nobody seems to know what's actually happening. Thanks for clearing it up that it's not a thing yet.

As someone who's been working in restaurants for over 8 years, I can confirm what others have said - there is NO current law that makes tips tax-free. The confusion is understandable because politicians have been talking about it a lot, but talking about something and actually passing it into law are very different things. Here's what you need to know RIGHT NOW for your 2024 taxes: - ALL tips (cash and credit card) are taxable income - You must report them on your tax return - Your employer already reports your credit card tips to the IRS - Not reporting tips can result in penalties, interest, and potential audit I know it sucks because tips are such a huge part of our income, but the current law is clear. Keep doing what you're doing and report everything properly. If any tip tax law does pass in the future, it will be widely announced through official channels, not just workplace rumors. Stay safe and file correctly!

Make sure you actually set up your business properly! Don't just start buying stuff and assume the IRS will see it as a business. Get an EIN, open a separate business bank account, maybe file for an LLC depending on your situation. I made the mistake of mixing personal and business expenses my first year and got audited. Total nightmare trying to prove what was actually for business vs personal. I'm not saying you need to incorporate right away but at minimum keep EVERYTHING separate.

One thing to keep in mind is the timing of when you can actually deduct these startup costs. The IRS distinguishes between true "startup costs" (like market research, legal fees to set up the business) and regular business expenses once you've begun operations. Equipment purchases like laptops are generally considered regular business expenses once you're actively in business, not startup costs. The good news is you can typically deduct equipment immediately under Section 179 or bonus depreciation rules, but make sure you're actually "in business" when you buy it - meaning you're actively pursuing clients and revenue. If you buy everything months before you start marketing your services, the IRS might question whether you were truly in business yet. Consider timing your equipment purchases closer to when you actually begin operating. Document everything showing you're actively working toward generating income!