How do you know if you qualify for that Recovery Rebate thing? I filed in 2020 but honestly can't remember if I got all the stimulus payments or not.

The easiest way to check is to look at your 2020 tax return - there should be a Recovery Rebate Credit Worksheet or a line on the Form 1040 itself (Line 30). If that line is blank or zero, you might have missed out. You qualify if you didn't receive the full stimulus payments you were entitled to in 2020. The first payment was $1,200 per adult and $500 per qualifying child, and the second was $600 per adult and per qualifying child. If your income wasn't too high and you didn't receive these full amounts, you might be eligible for the credit.

You generally have 3 years from the original due date to claim a refund for a given tax year. Since 2020 taxes were originally due May 17, 2021 (extended due to COVID), you have until May 17, 2024 to file an amended return or respond to an IRS letter about potential additional refunds. I wouldn't wait too long though - processing times can be lengthy, especially for amended returns or responses to IRS inquiries.

Thanks for mentioning that! I do have a dependent I claim and had withholding from my paychecks. Does the 1099-C income affect my eligibility for earned income credit? That's been a big help for me in past years.

Cancelled debt income reported on a 1099-C does count toward your AGI, which can affect the amount of earned income credit you receive. However, it's not considered "earned income" for purposes of calculating the EIC itself. The higher AGI might reduce your EIC amount, but you'll still qualify if you meet the other requirements. The best approach is to enter all your information including the 1099-C into your tax software and see what happens. Many people are surprised that the impact isn't as bad as they feared once all credits and deductions are calculated.

The statute of limitations applies to their ability to sue you to collect the debt, not to their right to cancel it and issue a 1099-C. Even if they can't legally force you to pay through the courts, they can still decide to write it off and report it to the IRS. Kind of a crappy system if you ask me.

Do you know if most tax pros are willing to do this kind of "review and submit only" service? I always assumed they wanted to do the whole return from scratch. How did you find one willing to just handle the e-filing part?

Most independent tax professionals (not the big chain places) are flexible with their services. I called a few local accountants and asked specifically if they would review and e-file my completed return for a reduced fee. Three out of four said yes. The key is to be upfront about what you want. Just call and say "I've already completed my tax forms but need someone to review them and handle the e-filing process. Do you offer this service and what would you charge?" The chains like H&R Block usually have fixed packages, but independent CPAs and enrolled agents are often willing to customize their services to what you actually need.

I had the same experience. Free File Fillable Forms actually messed up calculating my student loan interest deduction last year. The numbers didn't transfer properly between forms and I almost submitted with errors.

That's exactly the kind of issue I ran into! The worst part was that I didn't catch it until the very end of the process when reviewing the final calculations. By that point I'd already spent hours entering everything. I think I'll try one of the options mentioned above this year. Either getting a tax pro to handle the e-filing part or trying that taxr.ai service that converts the PDFs. Anything to avoid the buggy free forms again!

Thanks for this perspective! So if I understand correctly, I need to make sure I return the full $3,200 before December 31st, and get some kind of written confirmation from them that they won't issue the 1099-NEC? Is there any specific form or documentation I should ask for?

Yes, return the full amount before December 31st if you want to avoid the 1099-NEC entirely. Ask them for a receipt or formal acknowledgment of the returned payment that specifically states the date and amount returned, and that no 1099-NEC will be issued for this transaction. There's no specific IRS form for this situation, but you want something on company letterhead that clearly documents what happened in case you're ever questioned about it. Also, keep your own records - bank statements showing both the initial payment received and the return payment you made. Having a paper trail from both sides provides the best protection.

This is the most sensible comment here. Plus if you return the money... you don't have the money anymore! Why give up $3,200 just to avoid some paperwork and maybe a few hundred in taxes? That makes no financial sense.

That's really helpful, thanks! Do you know if I need to include any special forms besides Schedule D for the capital loss carryover? And will Free File guide me through that process?

You'll need Form 1040 (the main tax return), Schedule D (Capital Gains and Losses), and possibly Form 8949 (Sales and Other Dispositions of Capital Assets) depending on your specific situation. These forms work together to document your capital loss carryover. Yes, the IRS Free File program will guide you through completing these forms. Most Free File software will ask about capital losses from previous years and help you properly document the carryover. Just make sure you have your previous year's tax return handy so you can accurately enter the carryover amount.

Did you end up losing the deduction completely or were you able to fix it somehow?