I didn't know about checking the transcript! Just created an account and looked it up. There's a code 570 from March 11 and a code 971 from March 18. What does that mean exactly? Should I be worried?

The 570 code means there's temporarily a hold on your refund while they review something. The 971 code means they're sending you a notice in the mail explaining what they need or what the issue is. Don't panic! This is actually good news because it means there's specific action happening on your return rather than it just sitting in a queue. Watch your mail for the notice over the next week or so. Often it's something simple like verifying your identity or confirming information. Once you respond to whatever they're asking, things usually move pretty quickly.

I've filed almost the same return for the last 3 years (same job, same deductions) and this year is definitely taking longer. My tax preparer said they're seeing delays across the board, especially for anyone claiming credits or deductions.

I've been wondering about this too. What level of income would you say justifies paying for professional tax help vs doing it myself for freelance teaching?

How do I request the First Time Abatement? Do I need to file a specific form with my amended return or call them directly?

You can request First Time Abatement in your letter that accompanies your amended return. Specifically state that you're requesting "penalty abatement under the First Time Abatement policy" and mention that you have a history of filing and paying on time before this incident. If you've already filed your amendment without requesting it, you can also call the IRS directly or submit Form 843 (Claim for Refund and Request for Abatement). The most important thing is to use those specific words - "First Time Abatement" - as it's a formal program the IRS offers but doesn't heavily advertise.

This! My wife and I had a baby in 2020 too and used our HSA. Make sure you have all the EOBs (explanations of benefits) from your insurance company and any receipts. The IRS is pretty strict about HSA documentation.

That's an interesting perspective I hadn't considered. My investments have actually done pretty well - they're up about 40% since I made the contributions. But wouldn't I continue accruing the 6% penalty EVERY year going forward as long as the excess contributions remain in the account? That seems like it would eat away all the gains eventually.

You're absolutely right about the continuing 6% penalty - I should have been clearer. The 6% excise tax continues each year until you either withdraw the excess contribution or until you have sufficient earned income in a future year to "absorb" the previous excess contribution. So if you plan to stay in the US after graduation and will have earned income later, you could potentially "absorb" these past contributions against future years' contribution limits. But if you don't expect to have US earned income, then yes, the penalty would continue indefinitely and probably isn't worth it.

This is good advice. I work at a brokerage (not naming which one) and we help with this all the time. The key is asking specifically for the "excess contribution removal department" or sometimes called "retirement tax services." Regular customer service reps might not know the proper procedure.

Thank you so much for the straight answer! Just to make sure I understand completely - if I file without the 1099 and I'm off by like $100 on my calculated gains, will I definitely get flagged for an audit? Or is there some margin of error the IRS is ok with?

The IRS doesn't have a specific "margin of error" they officially accept. Any discrepancy between what's reported on the 1099 forms and what you report on your return could potentially trigger an automated notice. It doesn't necessarily mean a full audit, but you would receive a letter asking for clarification or additional tax payment. Even small differences can cause issues because the IRS's automated matching system flags returns where the numbers don't match the forms they've received from financial institutions. This is especially true with crypto transactions where the IRS has been increasing scrutiny in recent years.

Yep, happened to me too. They claimed "mid-February" but it was February 27th when I finally got mine. I ended up filing in early March and still got my refund in reasonable time. Better to file correctly than deal with amendments.

Thanks for confirming I wasn't the only one! That makes me feel better about potentially waiting. Did your 1099 end up having any surprises compared to what you were expecting based on your own records?