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Just an FYI for future reference - if you don't have your exact AGI, you can usually just enter $0 for electronic filing. This works if: 1. You're a first-time filer 2. You didn't file last year 3. You can't access your previous AGI for whatever reason The IRS added this option specifically for people who have trouble accessing their previous returns. Might save someone some stress next tax season!
I tried the $0 trick and my return got rejected. Does that only work with certain tax software? I was using FreeTaxUSA.
The $0 AGI option works with all tax software that uses the IRS e-file system, but there are some specific conditions. It's most reliable for first-time filers. For returning filers, it works if you didn't file last year or if you've had a significant change (like filing status). With FreeTaxUSA specifically, make sure you're selecting the right option - there should be something like "I don't have last year's AGI" or "I don't have access to my previous return." The software might have a specific workflow for this situation.
The IRS queue system is ridiculous. You know what's equally frustrating? When you finally get through the queue, verify your identity, and then the site crashes while you're trying to access your transcript. Happened to me TWICE today. Does anyone know if there's a penalty if I file tomorrow instead? I'm just about ready to give up for tonight.
If you don't file by midnight tonight and you owe taxes, you'll face a failure-to-file penalty of 5% of unpaid taxes for each month your return is late, up to 25%. There's also interest that accrues daily. HOWEVER - if you're getting a refund, there's no penalty for filing late! You just won't get your refund until you file. So if you're getting money back, you can file tomorrow without any penalty.
The difference between a new W-2 and a W-2 C is actually really important for IRS processing. When your employer files a W-2 C, they're notifying the Social Security Administration about the correction, which then gets transmitted to the IRS. Without this, the IRS computers will still have the old incorrect information on file. From my experience working in payroll, I can tell you that smaller employers sometimes don't understand the proper procedure. Using a replacement W-2 instead of a W-2 C might seem like the same thing to them, but it creates a mismatch in government systems that could trigger unnecessary notices or delays for you.
So if OP files with the new W-2 info, will they get flagged for audit since the IRS has the old numbers?
It's not an automatic audit trigger, but it does create a mismatch that could result in a notice from the IRS. Their systems will show the original W-2 amounts reported by your employer, while your tax return will show different figures. This discrepancy typically results in a CP2000 notice (proposed tax adjustment) rather than a full audit. The IRS will basically say "We have different numbers than what you reported" and ask for an explanation. You'd then need to respond with copies of your new W-2s and explain the situation. It's manageable but definitely an unnecessary headache that proper W-2 C forms would avoid.
I think everyone's overcomplicating this. I've received new W-2s instead of W-2 Cs twice over the years and just filed with the corrected info. Never had any issues. The IRS probably has bigger things to worry about than whether your employer used the exact right form for corrections.
This is terrible advice. The IRS absolutely notices these discrepancies and it's not about them "having bigger things to worry about" - their automated systems flag mismatches between what employers report and what individuals report. I do tax prep professionally and have seen numerous clients get notices because of exactly this situation.
Maybe I just got lucky then! I guess everyone's experience is different. I was just trying to reassure OP that it might not be the end of the world if they can't get proper W-2 Cs.
FYI - for anyone using FreeTaxUSA for crypto reporting, look for the "Capital Gains" section, then select "I'll enter my transactions manually" when it asks about your 1099-B forms. You can then enter each transaction with the date acquired, date sold, proceeds, and cost basis from your CSV file. Make sure you classify them correctly as short-term or long-term! That's a common mistake people make and it can significantly impact your tax situation. Short-term is for anything held less than a year and is taxed at your normal income rate.
Thanks! Is there a way to attach the CSV file directly or do I have to manually type each transaction? I have about 74 trades to report from last year.
Unfortunately FreeTaxUSA doesn't have a direct CSV import feature for crypto transactions. You'll need to enter them manually if you're not using a third-party tool like some others mentioned. If you have a lot of transactions, you might want to consolidate them by date if they're similar (like multiple small trades on the same day with the same cryptocurrency). FreeTaxUSA has a "Form 8949" checkbox that lets you indicate you're reporting summary information rather than each individual trade. Just make sure your totals are accurate.
Quick warning from someone who learned the hard way - don't skip reporting your crypto even with losses and no 1099-B. I thought since I lost money and received no forms, I didn't need to report anything last year. The exchange ended up sending information to the IRS later and I got a CP2000 letter about unreported transactions. Had to file an amended return and pay interest on the difference (though in my case it was actually a refund since reporting the losses properly reduced my tax bill).
Another option nobody has mentioned is to see if you qualify for an SBA loan modification. If your business has experienced hardship, you might be eligible to have your loan terms adjusted more permanently. I did this last year and got my 30-year term extended and interest rate reduced slightly. You'll need to provide documentation showing your business income and expenses to prove hardship, but it can make a big difference in the monthly payment without the negative effects of just paying less on your existing terms.
Do you need a specific reason for hardship? My business is struggling mainly because I made some bad inventory decisions, not because of any external factors. Would that still qualify?
You don't necessarily need a specific external reason like a natural disaster. The SBA recognizes that small businesses face various challenges. Poor business performance itself can qualify as hardship, regardless of the cause. What matters is demonstrating that your current financial situation makes the original loan terms unmanageable. You'll need to provide financial statements showing reduced revenue or increased expenses that impact your ability to make payments. Your inventory decision issue would likely qualify as long as you can document its impact on your business finances.
Have you considered looking into SCORE mentoring? It's free business mentoring sponsored by the SBA. I was drowning in debt with my landscaping business and they paired me with a retired finance exec who helped me restructure everything.
Savannah Vin
Check if you accidentally entered any numbers wrong. Last year I typed my W-2 income as $2,456 instead of $24,560 and got a massive refund calculation because the system thought I'd paid way too much in withholding compared to my income. Caught it before filing thank goodness! Also, some of the pandemic-related credits were pretty substantial. Did you get all your stimulus payments? If the system thinks you didn't receive stimulus money you were entitled to, it might be adding those as a credit.
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Ellie Lopez
ā¢That's a really good point about the stimulus payments. I moved twice last year and I'm not 100% sure if I received all of them or if they got lost in the mail during one of my moves. I'll double check the amounts I received against what the system thinks I should have gotten. Thanks for pointing that out!
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Savannah Vin
ā¢Happy to help! You can check on the IRS website to see exactly which stimulus payments were sent to you and when. Log into your IRS account and look for "Economic Impact Payment Information" - it will show the dates and amounts of all stimulus payments sent to you. Compare this to what you're claiming on your tax return. If you're still concerned after checking everything, filing on paper instead of electronically might be an option - sometimes that triggers a manual review which could catch any issues before processing your refund.
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Mason Stone
Have you considered that your refund might actually be correct? I had a similar situation where my refund was nearly double what I expected. Freaked out, had an accountant review it, and turns out everything was right. Between earned income credit, child tax credits, education credits, and some pandemic relief stuff, the tax code was actually pretty generous for certain situations last year. Not saying don't double check, but also don't assume it's wrong just because it's bigger than expected!
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Makayla Shoemaker
ā¢This is so true! People don't realize how many refundable credits exist in the tax code. My sister is a single mom who works part-time and goes to school, and her refund was over $8,000 last year which was WAY more than she paid in. But it was 100% legitimate because of EITC, education credits, and child tax credit. The system is designed to provide financial support to certain groups through the tax code.
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