Omg thank you for mentioning this! I didn't realize there was a difference between withdrawing contributions vs earnings from my Roth. Is there an easy way to tell which is which when I go to make a withdrawal? And yeah I'll definitely try for the payment plan route first!

Your Roth IRA provider should be able to tell you exactly how much of your account balance is from contributions versus earnings. Generally, withdrawals come from contributions first, so if you've contributed more than you're planning to withdraw, you should be able to take that amount out without tax consequences. For example, if you've put in $12,000 over the years and your account is now worth $14,000, you can withdraw up to $12,000 penalty-free. Just contact your provider before making any withdrawals to confirm the exact amount of your contributions. And definitely pursue that payment plan with the IRS - they offer reasonable terms, especially for first-time issues.

I amended returns for 2 years of unreported scholarship income about 3 years ago. The process wasn't as bad as I expected. I used Form 1040-X for federal and had to fill out amended state returns too. The IRS charged interest on the unpaid taxes (inevitable), but I qualified for First Time Penalty Abatement which saved me hundreds in failure-to-file penalties. I wrote a letter explaining that I genuinely didn't understand scholarships were taxable, and they were pretty reasonable. Set up a payment plan for $150/month and it's almost paid off now.

My LLC is registered in Delaware. I think that's why the company I worked with only mentioned federal forms... Do you know if Delaware has any special requirements for foreign-owned LLCs with no physical presence in the state?

Delaware is actually one of the better states for your situation. They don't require a separate state income tax return for LLCs that don't have physical operations in Delaware. You'll still need to pay the annual Delaware franchise tax ($300 for most small LLCs) to maintain your business registration, but that's separate from income tax filing. Just make sure you've paid that annual franchise tax - Delaware will revoke your LLC status if you miss payments. They send the notice to your registered agent, so sometimes foreign owners miss these notifications if they're not in regular contact with their agent.

This is super important. My friend got hit with a $10,000 penalty for not filing FBAR even though he didn't owe any taxes. The IRS and Treasury Department don't mess around with foreign account reporting.

Wait I'm confused - is this different from the 1098-T forms I mentioned in my post? I thought the 1098-T was for the tuition I paid, but what's this 1098-E for? Also, I'm still in school so I haven't started paying back my loans yet - does that mean I don't qualify for this interest deduction thing?

Yes, they're completely different forms for different tax benefits. The 1098-T is for tuition payments and qualifies you for education credits like the American Opportunity Credit or Lifetime Learning Credit. The 1098-E is for student loan interest payments and qualifies you for the Student Loan Interest Deduction. Since you mentioned you're still in school and haven't started repayment, you probably haven't paid interest yet, so this deduction likely won't apply to you until you begin repayment. But it's good to know about for future tax years!

My community college has a VITA program (Volunteer Income Tax Assistance) that offers free tax help. They specialize in helping students claim education credits. Maybe check if your school has something similar?

I second this! My closing agent was super helpful when I had a similar question. Sometimes the simplest solution is best.

I didn't even think of that! I just emailed my agent and she got back to me right away. You're right - she had everything on file and sent me the state withholding form with the ID number clearly printed at the top. I was definitely overthinking this whole thing. Thanks for suggesting the obvious solution that I completely missed! Just finished my taxes and everything went through perfectly.

I had the opposite problem! TurboTax kept rejecting my entry when I included the dashes, but accepted it when I removed them. Seems like it might vary by state.

That's so strange! Must definitely depend on the state then. I'm in Illinois - where are you located? Maybe we should specify which states have which requirements when sharing advice like this. I guess the safest approach is to try both with and without special characters if the first attempt gets rejected. TurboTax isn't always clear about the exact format they want for these state-specific entries.

Wait, contributing to 401k actually reduces FICA too? I thought it only reduced income tax but not FICA/Medicare? Now I'm confused.

You're right to question this - I made a mistake. 401k contributions do reduce your federal income tax withholding, but they do NOT reduce FICA and Medicare taxes. Those taxes are still calculated on your gross pay before 401k deductions. However, certain other pre-tax deductions like health insurance premiums, HSA contributions, and dependent care FSA contributions do reduce both income tax and FICA tax bases. So while 401k won't help with FICA, other pre-tax benefits might reduce your overall tax burden if your employer offers them.

This happened to me too! Also check if they're taking out garnishments or something you didn't authorize. My company was taking out "uniform fees" that I never agreed to.