Has anyone tried just using the IRS e-file system instead of faxing? I've submitted most of my documents electronically through their portals and haven't needed to fax anything for the past two years.

I've been using RingCentral Fax for sending documents to the IRS and it's been solid. What I really like about it is that they provide detailed transmission reports that include not just delivery confirmation, but also the exact time stamps and even the quality of the transmission. One thing I learned the hard way - always double-check the IRS fax number you're sending to. Different departments have different fax numbers, and I once sent my documents to the wrong one and had to resend everything. The IRS website has a directory of fax numbers by department and form type. Also, if you're sending multiple pages, I'd recommend calling the IRS first to confirm they received everything. Even with confirmation receipts, pages can sometimes get separated or lost in their system. Better to verify than to find out months later that they're missing page 3 of your submission!

Michigan has a flat state income tax rate of 4.25%, so you'll want to set aside an additional $1,530 (4.25% of $36,000) on top of whatever you're saving for federal taxes. So if you're setting aside 25-30% for federal, you're looking at roughly 29-34% total when you include state taxes. The good news is Michigan's tax is pretty straightforward - it's just a flat rate on all income, so no complicated bracket calculations like with federal. But definitely don't forget about it! I've seen people get caught off guard by state taxes on large one-time payments because they only planned for federal. You might also want to check if Michigan requires estimated tax payments for large income increases. I'm not 100% sure on their specific rules, but it's worth looking into to avoid any penalties.

Just wanted to add another perspective here - I work as a tax preparer and see this situation all the time. The key thing to remember is that settlement income is typically taxed as ordinary income, not capital gains, so you'll pay your regular tax rates on it. One strategy I often recommend to clients is to not just set aside the tax money, but actually put it in a separate high-yield savings account immediately when you receive the settlement. That way you're earning a little interest on the money while you wait to pay the taxes, and you're not tempted to spend it on something else. Also, since this is a contract dispute settlement, make sure you get proper documentation (1099-MISC) from whoever is paying you. Sometimes there are delays in getting the tax forms, and you want to make sure you report the income correctly even if the 1099 is late. Keep all your settlement paperwork - it'll make tax filing much smoother. The 25-30% federal plus 4.25% state advice others have given is solid. Better to overestimate and get a refund than to be scrambling to find money you don't have come April!

I went through this exact same situation about 8 months ago and completely understand your stress! The duplicate EIN issue is actually more common than most people realize, especially with the processing backlogs the IRS has been dealing with. Here's what worked for me: Call the Business & Specialty Tax Line at 800-829-4933 and clearly explain that you received two EINs despite only submitting one application. The misspelling on your second EIN letter is actually perfect evidence that this was an IRS processing error, not something you did wrong. Timing is crucial - I had the best luck calling on Tuesday mornings right at 7 AM Eastern. The wait times are significantly shorter then compared to other days. Have both EIN letters ready with the exact numbers and dates they were issued. The IRS representative will mark one EIN as "inactive" in their system (they don't actually delete EINs, just deactivate them). Definitely keep the first one since it has the correct business name. This is super important: ask for written confirmation of the resolution. It takes about 2-3 weeks to arrive, but you'll want that documentation for your records. Since you haven't used either EIN for any business activities yet (banking, vendor accounts, payroll, etc.), this should be a very straightforward 15-20 minute call once you get connected. You'll only need to file taxes under the active EIN going forward. Don't worry too much - this is a known issue with a standard resolution process, and the IRS handles these situations regularly. You'll have it sorted out soon!

I completely understand your frustration - dealing with duplicate EINs can be really stressful! Based on everyone's experiences shared here, it sounds like you have a very manageable situation that the IRS handles regularly. The consensus seems clear: call the Business & Specialty Tax Line at 800-829-4933, ideally on Tuesday or Wednesday morning right at 7 AM Eastern for the shortest wait times. Having both EIN letters ready with exact numbers and dates will help the call go smoothly. Since your second EIN has the misspelled business name, that's actually perfect evidence this was an IRS processing error rather than something you did wrong. The representative will mark one as "inactive" (keep the first one with correct spelling) and you should definitely request written confirmation for your records. The fact that you haven't used either EIN for any business activities yet (banking, vendor accounts, etc.) means this should be a straightforward 15-20 minute resolution once you get connected. You'll only need to file taxes under whichever EIN remains active. Don't stress too much about this - from all the experiences shared in this thread, it's clear the IRS has a standard process for these duplicate situations and you're definitely not the first person they've helped with this exact issue. You'll have it sorted out soon!

This thread has been incredibly helpful for understanding these situations! I wanted to add my perspective as someone who works in healthcare administration - we see these automatic renewal cases frequently, especially from the COVID period when states suspended many eligibility reviews. A few additional points that might be helpful: 1. Most states have a "discovery grace period" - usually 30-90 days from when you become aware of the coverage to report income changes without penalty. Since you're reporting this during tax season when you naturally discovered it, you're likely well within any grace period. 2. The fact that you looked into marketplace coverage and decided against it actually works in your favor - it shows you weren't trying to "double-dip" or hide income. That's important context to mention when you call. 3. Keep your tax forms showing the Medicaid coverage along with any documentation of your marketplace research. This timeline helps demonstrate you acted in good faith throughout. 4. When you call, ask specifically about "retroactive eligibility determination" - this is the formal process they use to review these cases, and using the correct terminology can help ensure you're transferred to the right department. The system really wasn't designed to handle the pandemic-era automatic renewals smoothly, so you're definitely not alone in this situation. States are generally being reasonable about resolving these cases when people come forward voluntarily.

This thread has been incredibly enlightening! I'm dealing with a nearly identical situation where I discovered Medicaid coverage for 2023 that I wasn't aware of, and my income was definitely above the eligibility threshold. Reading through everyone's experiences has transformed this from a terrifying situation into something that feels manageable. The key takeaways that have given me confidence are: 1. This is apparently much more common than I thought, especially due to pandemic-era automatic renewals 2. States have established procedures for handling these "discovery" cases differently from fraud cases 3. Voluntary reporting is crucial and seems to significantly impact how cases are classified 4. Documentation is key - both for protecting yourself and demonstrating good faith I'm planning to call my state office this week using the advice shared here: - Ask for an eligibility specialist who handles retroactive determinations - Emphasize that I'm voluntarily reporting a potential discrepancy I discovered during tax preparation - Request written documentation of whatever resolution they provide - Mention that I had researched marketplace coverage but chose not to enroll due to cost The professional insight from Avery about "discovery grace periods" and using proper terminology was particularly valuable. It's clear that while this situation is stressful, there are established pathways to resolve it without major penalties when handled proactively and honestly. Thanks to everyone who shared their experiences - this community support has been invaluable for navigating what initially felt like an impossible situation!

I'm dealing with this exact same situation right now! Got a W2 from my employer's disability provider with zeros in all wage boxes but about $5,200 in Box 12 Code J from when I was out on medical leave. After reading through everyone's responses here, I feel much more confident about just leaving this W2 off my return entirely. It sounds like multiple people have successfully done this without any issues from the IRS. The fact that Code J specifically indicates non-taxable benefits makes sense - why would I need to report income that isn't actually income? I was initially worried about "hiding" a W2 from the IRS, but now I understand they're not expecting me to report non-taxable amounts anyway. Going to go ahead and e-file without including it. Thanks everyone for the detailed explanations and real-world experiences - this community is so helpful for navigating these confusing tax situations!

I just went through this same situation a few months ago! Had a W2 from my company's short-term disability provider with $0 in all wage boxes but about $3,100 in Box 12 Code J. After doing some research and calling the IRS directly (which took forever to get through), they confirmed that Code J amounts are non-taxable sick pay benefits that don't need to be reported as income on your return. The agent told me that many people get confused by this because they think every W2 has to be included, but that's not the case when there's no taxable income involved. I ended up leaving it off my return completely and e-filed through FreeTaxUSA without any issues. Got my refund processed normally and never heard anything from the IRS about the "missing" W2. The key thing to remember is that your employer sends this W2 for documentation purposes - they're required to report any payments they made to you, even if they're non-taxable. But you're only required to report taxable income to the IRS, which in this case is zero. Don't let H&R Block's software limitations force you into mailing your return. Just file electronically without this W2 and keep the physical copy with your tax records for your own documentation.