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You can absolutely use a different preparer. I recommend calling your original preparer and simply asking for a complete copy of your return if you don't already have it. Then take that to any preparer you choose. H&R Block charges around $125-150 for basic amendments, while independent CPAs might charge $200-300 depending on complexity. Some preparers even offer free amendments if they made the error.

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Yes, you can absolutely use a different tax preparer for your amendment! There's no legal requirement to stick with your original preparer, and given that you already paid $600+ and they want to charge you more for the amendment, shopping around makes perfect sense. A few things to keep in mind: - Make sure you have a complete copy of your original return (all pages and schedules) - The new preparer will need to understand what was filed originally to prepare the 1040-X correctly - Get quotes from multiple preparers - amendment fees can vary significantly - Some preparers offer free amendments if they find additional errors that benefit you I'd recommend calling around to local CPAs or tax services to compare pricing. Many charge flat fees for amendments ($150-250 is typical) rather than hourly rates. Just make sure whoever you choose has experience with amended returns since the process is a bit different from original filings. Good luck getting this sorted out without paying your original preparer even more money!

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This is such helpful advice! I'm new to dealing with tax amendments and had no idea that preparers could charge such different amounts. The flat fee range you mentioned ($150-250) is really useful to know when I start calling around. I'm curious though - when you mention that some preparers offer free amendments if they find additional errors that benefit you, do you mean they waive their fee if they find you're owed more money? That sounds almost too good to be true but would be amazing if that's actually a thing some places do!

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Kayla Morgan

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Another option to consider - instead of remodeling your current kitchen, what about adding a separate small kitchenette in another part of your home specifically for the business? My sister did this in her basement for her cake business. The benefit is that you can deduct 100% of that kitchenette since it's exclusively for business, rather than trying to calculate percentages for a shared space. It might also be cheaper than a full kitchen remodel, depending on your situation. She was able to deduct the entire cost of the installation over time (had to depreciate it), plus all the appliances and equipment. Plus, she keeps her family kitchen separate from her business which makes health inspectors happy!

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James Maki

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Did your sister have to get any special permits to add the kitchenette? I'm wondering if adding a second kitchen to a single-family home would trigger zoning issues. Also, did she have to run new plumbing and electrical, or was she able to tap into existing lines? I've been thinking about doing something similar.

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Great question about kitchen remodeling deductions! As someone who's helped many home-based food entrepreneurs navigate this, here are the key points to consider: **Yes, you can deduct portions of your kitchen remodel**, but documentation is crucial. Since you use the kitchen for both personal and business purposes, you'll need to establish a reasonable business-use percentage. I recommend keeping a detailed log for at least 3-4 months showing when the kitchen is used for catering prep versus family meals. **For appliances**: If an appliance is used more than 50% for business, you can deduct that percentage of the cost. A commercial-grade refrigerator used 80% for catering could have 80% of its cost deducted. **For structural improvements** (countertops, cabinets, flooring): These typically need to be depreciated over time rather than deducted immediately, but you still claim the business-use percentage of that annual depreciation. **Pro tip**: Consider whether any improvements are required by health department regulations for your catering permits. These can often be justified as 100% business expenses since they're legally required for your food service business. The fact that you're scaling up to serve 300+ people shows this is clearly a legitimate business operation, not a hobby. Just make sure you have all proper permits and keep meticulous records. A tax professional familiar with food service businesses would be worth the consultation fee to maximize your deductions while staying audit-safe.

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Kyle Wallace

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This is really helpful advice! I'm just starting to think about tax planning for my small home bakery. You mentioned keeping a detailed log for 3-4 months - is there a specific format the IRS expects for this documentation? Like, do I need to track hours spent or just note which days I used the kitchen for business? Also, when you say "audit-safe," what are the red flags that typically trigger IRS scrutiny for home business deductions? I want to make sure I'm claiming legitimate deductions without painting a target on my back.

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Those 2025 dates are definitely concerning and not normal for a 2024 return. The fact that you're seeing "Additional tax assessed" with a future date suggests there might be a system error or your return got flagged for review. The long number (71254-415-05330-5) is likely a notice reference code. I'd recommend trying to call the Taxpayer Advocate Service at 1-877-777-4778 - they can sometimes help when regular IRS lines aren't useful. Also, definitely keep an eye on your mail for any notices even though the transcript shows they were "issued" - sometimes there's a delay between when they show up on transcript vs when you actually receive them.

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This is really helpful advice! I didn't know about the Taxpayer Advocate Service - definitely going to try calling them. The 2025 dates have been keeping me up at night wondering if something went seriously wrong. Thanks for explaining what that reference number might be too. Have you dealt with similar transcript errors before?

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The 2025 dates are definitely a red flag - that's not normal for a 2024 return and suggests either a system glitch or your return got kicked into a special review cycle. The EIC being added then immediately removed usually means they're verifying your eligibility, possibly questioning dependents or income levels. That notice reference number (71254-415-05330-5) typically corresponds to CP letters they send out. Even though your transcript shows notices issued, sometimes there's a 2-3 week delay before you actually receive them in the mail. I'd suggest setting up informed delivery with USPS so you can track what's coming. If you don't receive anything by next week, definitely call that Taxpayer Advocate number Jordan mentioned - they're your best bet when the regular IRS lines are useless.

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Zara Khan

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This is super helpful! I'm definitely going to sign up for informed delivery - didn't even know that was a thing. The part about EIC being removed due to verification makes sense now. I was panicking thinking I did something wrong on my taxes. Really appreciate you breaking down what that reference number means too. How long did similar cases take to resolve in your experience?

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Miguel Silva

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Just adding that if you use tax software like TurboTax or H&R Block to file late, they'll usually calculate all these penalties for you automatically. Saves a lot of headache trying to figure it out yourself.

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Zainab Ismail

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Are you sure about that? I used TurboTax last year for a late filing and didn't see anything about penalties being calculated.

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Omar Farouk

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I went through this exact same situation last year and can confirm what others have said - the late filing penalty does start from your extended October 15th deadline, not April. So you're not immediately hit with the maximum 25% penalty, which was a huge relief when I found out. However, here's what really caught me off guard: even though I filed an extension, I still owed estimated tax payments that should have been made quarterly throughout the year. Since I missed those AND the final payment due on April 15th, I was hit with both the failure-to-pay penalty (0.5% per month since April) plus interest on the unpaid amount. My advice is to file your return IMMEDIATELY to stop the late filing penalty from growing. Even if you can't pay the full amount owed, filing stops that 5% monthly penalty clock. Then you can set up a payment plan with the IRS for what you owe. The payment plan fees are usually much less painful than letting those penalties keep accumulating. Also, definitely look into first-time penalty abatement if you've been compliant for the past 3 years. It's basically a "get out of jail free" card that many people don't know about.

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Tyrone Hill

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I went through something very similar with a trust I was administering last year. The key thing to remember is that you need to be extremely thorough with your documentation since the IRS will likely scrutinize theft loss claims on trust returns. Beyond what others have mentioned about Form 4684 and the year of discovery rule, make sure you're properly handling the impact on beneficiary distributions. If the theft affected distributions that should have been made to beneficiaries, you may need to adjust the distribution deduction on Schedule B of the 1041. Also, consider whether you need to file Form 3520-A (Annual Information Return of Foreign Trust With a U.S. Owner) if any of the stolen funds were moved offshore - I've seen cases where embezzling trustees tried to hide money internationally. One practical tip: keep detailed records of all legal and forensic accounting costs related to recovering the stolen funds. These are generally deductible as administration expenses on the 1041, separate from the theft loss itself. Our trust was able to deduct over $50,000 in legal fees pursuing the former trustee. Don't forget to notify the beneficiaries about the situation and how it affects their Schedule K-1s. They have a right to know about material changes to the trust's financial position.

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James Maki

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This is incredibly helpful, especially the point about beneficiary distributions. I hadn't even considered how the theft might affect what should have been distributed to beneficiaries. In our case, the trustee was definitely reducing distributions by claiming inflated expenses, so we'll need to look at adjusting the distribution deduction. The international aspect is also something we should investigate - we found some wire transfers to accounts we couldn't immediately identify. Do you know if there's a specific threshold that triggers the Form 3520-A requirement, or is it any amount moved offshore? Also, can you clarify about the legal fees being separate from the theft loss? Our attorney bills are getting pretty substantial and it would be great if those are fully deductible as administration expenses rather than having to be netted against any potential recovery.

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Yara Nassar

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Regarding the Form 3520-A, there's no specific dollar threshold - any foreign trust with U.S. beneficiaries or U.S. owners generally needs to file it. If your embezzling trustee moved ANY trust funds to offshore accounts, even temporarily, you should consult with a tax professional about whether filing is required. The penalties for not filing when required are severe. On the legal fees - yes, they're generally fully deductible as administration expenses under IRC Section 212. These are different from the theft loss itself because they're legitimate costs incurred to protect and recover trust assets. Just make sure to separate the fees: costs directly related to recovering stolen funds vs. general trust administration. Both should be deductible, but they may go on different lines of the return. One more thing I learned the hard way - if you're planning to pursue insurance claims (fiduciary liability, crime coverage, etc.), make sure your theft loss calculation on the 1041 properly accounts for any potential insurance recoveries. You'll need to reduce your deductible loss by the amount of any reasonably expected recoveries, even if you haven't received them yet.

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I'm dealing with a similar trust embezzlement situation and wanted to share some additional considerations that might help. One thing I learned from our forensic accountant is that you should also review whether any of the "stolen" funds were actually legitimate trustee compensation that just wasn't properly documented or approved. In our case, about $15,000 of what initially looked like theft turned out to be reasonable compensation that the trustee had taken without following proper procedures. Also, if your trust has multiple classes of beneficiaries (income vs. remainder), you'll need to determine whether the theft should be allocated against principal or income for purposes of the beneficiaries' interests. This can significantly impact the Schedule K-1s you'll need to issue. One practical tip: consider filing Form 8886 (Reportable Transaction Disclosure Statement) if the theft loss exceeds certain thresholds. While theft losses aren't typically "reportable transactions," very large losses sometimes trigger additional disclosure requirements, especially if they involve complex trust structures. Finally, make sure you understand your state's laws about trustee liability and recovery. In some states, remaining trustees have specific duties to pursue recovery that could affect how you report potential recoveries on the federal return. Our state required us to pursue all reasonable collection efforts before claiming the full loss, which delayed our ability to finalize the theft loss calculation.

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This is really comprehensive advice, thank you! The point about reviewing whether some amounts were actually legitimate but improperly documented compensation is crucial - we should definitely have our forensic accountant look at that angle. I'm particularly concerned about the allocation between principal and income beneficiaries. In our situation, the trustee was taking money that should have been distributed as income to current beneficiaries, so I think the theft loss should be allocated against income rather than principal. Does anyone know if there's specific IRS guidance on how to make this allocation, or is it generally based on what type of trust assets were actually stolen? Also, the Form 8886 requirement is news to me - our theft loss is definitely over $2 million, so we should probably look into whether that triggers any additional reporting. Has anyone dealt with large theft losses and the reportable transaction rules?

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