One thing to consider - if you were receiving pandemic unemployment during that same period, reporting the additional income might affect your eligibility for those benefits. The unemployment system might determine you were overpaid benefits based on your actual income.

Just want to emphasize what others have said - definitely file that amended return ASAP. I had a similar situation in 2020 where I underreported by about $15k from freelance work. The longer you wait, the more interest accumulates, and the IRS has that 6-year window for substantial underreporting like yours. One thing that helped me was keeping detailed records of when I discovered the error and what steps I took to correct it. I included a letter with my 1040-X explaining the honest mistake and how I found the missing records. The IRS actually waived most of the penalties because of the voluntary disclosure and good faith effort to correct it. Also, double-check that your business deductions are solid before filing the amendment. Since you're already drawing attention to that tax year, make sure everything else is bulletproof. Better to be conservative on deductions than give them any reason to dig deeper.

Has your employer given you any info about COBRA? When I had surgery last year, my HR dept told me COBRA might actually be cheaper than paying the full premium directly to them. Weird but true in some cases! Worth asking about.

One thing to keep in mind - make sure you get documentation from your employer stating that these premium payments are being made with after-tax dollars and that you're maintaining the same coverage you had while employed. The IRS may want to see proof that this isn't duplicating any pre-tax deductions. Also, since you're looking at substantial medical expenses with the hip replacement, consider timing any elective medical procedures or expenses for this same tax year if possible. Since you'll likely exceed that 7.5% AGI threshold anyway, it makes sense to bunch as many qualifying medical expenses as you can into 2025 to maximize your deduction. Hope your surgery goes well and recovery is smooth!

could be identity theft... happened to me last year. somebody was stealing my mail

I went through the exact same thing last year! After the third "30 day wait" I finally got fed up and called my congressman's office. They have a constituent services team that can contact the IRS directly on your behalf. Got my refund within 2 weeks after months of runaround. Sometimes you need someone with actual authority to light a fire under them. Worth a shot if the payment trace doesn't work!

Anyone have good recommendations for tracking all these different taxes throughout the year? I've tried to keep receipts for sales tax but it's such a pain. Would love a simpler system.

This is such an important question that more Americans should be asking! I've been down this rabbit hole myself and found that most people drastically underestimate their total tax burden because we only think about the big, visible ones like income tax. From my research and personal calculations, here's what I've found for a typical middle-class household: - Federal income tax: 10-12% - FICA/payroll taxes: 7.65% (15.3% if self-employed) - State income tax: 0-9% depending on your state - Property taxes: 1-3% of income (varies hugely by location) - Sales taxes: 1-2% of income on average - Gas, excise, and other "hidden" taxes: 0.5-1% This usually adds up to somewhere between 28-35% for most middle-income families, which is substantial but not quite the 50% you suspected. The variation depends heavily on where you live - states like Texas have no income tax but higher property and sales taxes, while states like California have high income taxes. What's really eye-opening is realizing how much of our tax burden comes from sources we don't actively think about. Property taxes embedded in rent, sales taxes on every purchase, gas taxes every time we fill up - it all adds up to a significant chunk of our income going to various levels of government. The lack of easy-to-find comprehensive data on this topic definitely seems intentional. Nobody wants to advertise the total take!

Has anyone actually tried doing a check-the-box election to be treated as a foreign corporation instead? I've heard this might be simpler than maintaining a US C-Corp if you truly have no US activities.

This is a complex area where small details can have huge tax implications. I went through a similar transition from Dubai to the EU with a US entity, and there are several nuances that aren't immediately obvious. First, even if you have zero US-sourced income, you're absolutely right that Form 1120 filing is still required annually for the C-Corp. But here's what caught me off guard - the "effectively connected income" determination isn't just about where your clients are located, but also includes factors like where you're performing services, where you're making key business decisions, and even where your business bank accounts are located. For someone moving to Sweden specifically, you'll want to pay close attention to the US-Sweden tax treaty provisions. Sweden has a relatively aggressive approach to taxing foreign corporations controlled by Swedish residents, so you might end up with Swedish corporate tax obligations even on your US C-Corp's income. One thing I wish I'd understood earlier: if you're planning to take distributions from the C-Corp as a Swedish resident, you'll likely face Swedish personal income tax on those distributions regardless of whether the underlying corporate income was US-taxed or not. Have you considered whether maintaining the LLC structure might actually be simpler for your situation? The transparency for Swedish tax purposes might be easier to manage than dealing with both US corporate reporting and Swedish CFC rules.