Quick question for anyone who's done this before - does the 1099-C amount affect the calculation of estate taxes at all? My grandma's estate has a similar situation with almost $28,000 in canceled debt.

I went through almost the exact same situation last year when my father-in-law passed away. We received two 1099-C forms after his death - one for about $12,000 and another for $7,500. It was really confusing at first because we didn't know if we needed to include this as income on our personal taxes or handle it through the estate. What we learned is that you definitely want to check the "reason codes" on each 1099-C form. If they have Code D (death of debtor), then the canceled debt isn't taxable income to the estate. But you still need to report it on Form 1041 and file Form 982 to show the exclusion. The tricky part was figuring out the timeline - one of the debts was actually settled before he passed away due to financial hardship, so that one was potentially taxable to the estate. We ended up having to dig through his records to understand exactly when each debt was canceled and why. My advice would be to gather all the documentation you can about when and why the debt was canceled, then either work with a tax professional who handles estates or use one of the tools others mentioned to make sure you're reporting everything correctly. The IRS will definitely be expecting to see that 1099-C addressed somewhere in your filing.

Maybe unpopular opinion but not getting a refund is actually better financial planning. When you get a big refund, it means you've been giving the government an interest-free loan all year. I intentionally try to owe a small amount (under $1000 to avoid penalties) every year because I'd rather have that money in my paycheck each month than wait for a lump sum refund.

I'm in the exact same situation! Usually get around $1,800 back and this year I owe $47. I had no idea about the withholding table changes either. What's really frustrating is that my HR department never mentioned this when they had us fill out new W-4s a couple years back. They just said "fill this out" without explaining that claiming zero allowances doesn't exist anymore and the whole system works differently now. I guess the silver lining is that we technically had more money in our paychecks throughout the year, but like others have said, most of us don't really notice an extra $20-30 per paycheck the way we notice a missing $2,000 refund. Going to have to figure out how much extra to withhold for next year so I don't get hit with this surprise again.

Anyone know if having incorrect codes in Box 12 could trigger an audit? I just realized my W2s have been missing the AA code for Roth contributions for like 3 years now...

I went through something very similar last year! My employer had been missing the AA code for my Roth 401k contributions on my W2 for two years running. Here's what I learned: while it's technically an error that should be corrected, you're right that it likely won't impact your tax liability since Roth contributions are already included in your Box 1 wages as taxable income. The AA code is mainly for informational/record-keeping purposes. That said, I did end up requesting corrected W2s from my employer for my own peace of mind and record-keeping. It was actually easier than I expected - I just sent an email to payroll explaining the discrepancy and referencing IRS guidelines that Roth 401k contributions should be reported with code AA in Box 12. They issued the corrected forms within about 2 weeks. Even though I got the corrected W2s, I didn't need to file amended returns since my tax liability didn't change. But having the accurate records gives me confidence for future retirement planning and potential rollovers. If you're meticulous about your financial records like I am, it might be worth the small hassle to get it corrected, especially for peace of mind.

Just wanted to chime in and say your parents might notice in other ways even if they don't see it on taxes. My parents found out about my "secret" job when they saw deposits in my bank account that I couldn't explain. If you share any bank accounts with them or they can access your statements, they might notice that way.

As someone who went through this exact situation a few years ago, I can confirm what others have said - your parents absolutely will NOT see your income on their tax return when they claim you as a dependent. The dependency claim is completely separate from your earnings. However, I'd recommend being proactive about a few things: 1) Make sure your employer has an address where your parents won't see mail (like a PO box or friend's address), 2) Set up your own bank account if you haven't already, and 3) File your own tax return since you're over the $2,300 threshold - but mark that you can be claimed as a dependent. The tax system is designed to keep individual returns private, even within families. Your parents' return will only show that they're claiming you - nothing about what you earn or where you work. You've got this!

Anyone know if the IRS has a program for servers specifically? My tax guy mentioned something called the "Voluntary Disclosure Program" but wasn't sure if it applies to simple tip reporting issues.

I'm going through something similar right now and wanted to share what I've learned from my tax attorney. The most important thing is to act quickly but methodically. Here's what worked for me: 1. **Gather ALL your records** - bank statements, work schedules, even old pay stubs. You'd be surprised how much you can reconstruct from these. 2. **Calculate conservatively** - The IRS expects servers to report at least 8% of food sales as tips. If you can't prove exact amounts, use this as your baseline but try to be as accurate as possible. 3. **File Form 1040-X for each year** - Don't try to lump everything together. Each year needs its own amended return. 4. **Write a clear explanation** - Include a statement explaining this was an honest mistake, not intentional fraud. The IRS appreciates transparency. For your mortgage situation, consider asking your lender about a "bank statement loan" program if they offer it. Some lenders will accept 12-24 months of bank statements showing regular deposits instead of tax returns for self-employed or commission-based workers. The amendment process typically takes 3-4 months, so your 45-day timeline might be tight. But being proactive about fixing this now is absolutely the right move. Good luck!