You're absolutely in the right position here - reporting income you actually received is never going to get you in trouble with the IRS, even if the payer hasn't filed their forms yet. I've seen this scenario dozens of times in my work, and the IRS consistently prioritizes catching unreported income over minor discrepancies where taxpayers over-reported. Keep your payment records (bank deposits, invoices, emails, etc.) in case you ever get a CP2000 notice asking about the discrepancy, but honestly that's unlikely since you already paid tax on the income. The company that hasn't filed their 1099-NEC is the one who could face penalties, not you. Don't amend - that just opens up your return to more scrutiny for no benefit. You did everything correctly by reporting the income when you filed.

I had this exact same situation happen to me two years ago! Filed my return with a 1099-NEC for about $3,200 in freelance income, but the company never submitted their paperwork to the IRS. I was panicking thinking I'd get audited or something, but absolutely nothing happened. The key thing everyone here is saying is true - you're protecting yourself by reporting the income. The IRS gets suspicious when people UNDER-report income, not when they over-report it. I kept all my records (invoices, payment confirmations, bank deposits) just in case, but I never even got a letter about it. The company eventually filed their 1099s about 10 months late and still nothing came of it. You did the right thing by including it on your return, so don't stress about it!

Does anyone know if there's any difference in how this works for different types of brokerage accounts? Like would the deduction rules be different for a trust account vs an individual account?

I appreciate all the detailed discussion here. One thing I want to emphasize for anyone considering this strategy is the importance of keeping meticulous records regardless of which approach you choose. If you decide to roll the interest into new loans, document everything: the original loan amount, each year's interest that gets rolled over, and the cumulative totals. Create a simple spreadsheet tracking the "investment interest basis" versus the actual loan balance. This becomes crucial not just for tax purposes, but also for your own financial planning. Also consider your broker's policies carefully. Some brokerages have restrictions on how they handle rolled-over interest or may charge fees for loan modifications that could eat into any tax benefits. I learned this the hard way when my broker charged me $50 each time I wanted to roll interest into the loan balance. The tax treatment is important, but make sure the overall financial picture (including fees, rate risks, and cash flow impact) still makes sense for your situation.

Did you claim EIC or CTC? Those returns take longer to process and might explain the delay

Same thing happened to me last year! The disconnect between WMR and transcripts is super confusing but totally normal. WMR updates first when they receive your return, but transcripts don't populate until they actually start processing it. I'd say give it another week or two - processing times have been all over the place this season. You're not alone in this!

3 Does anyone know if tax-loss harvesting would help in this situation? I have some underwater investments I could sell to generate losses. Would those offset the capital gains before determining what rate applies?

Great discussion everyone! One thing I'd add is the importance of considering the Net Investment Income Tax (NIIT) when planning large capital gains realizations. If your modified adjusted gross income exceeds $200,000 (single filer), you'll pay an additional 3.8% tax on investment income including capital gains. With the scenario described ($42K regular income + $380K gains + $63K dividends), you'd definitely hit this threshold and pay NIIT on the investment income portion. This effectively makes your capital gains rate 18.8% instead of 15% on most of those gains. It's another reason why spreading the sales across multiple years could be beneficial - you might be able to stay under the NIIT threshold in some years. Also worth noting that if you're subject to NIIT, it applies to the lesser of: (1) your net investment income, or (2) the amount by which your MAGI exceeds the threshold. So careful planning around that $200K line can make a real difference.

One thing I learned the hard way - make absolutely sure you specify the correct tax year when requesting the removal! My provider had a confusing form that made me think I was requesting removal for the correct year, but they processed it for the wrong year. Also, double check that the 1099-SA you receive next January actually shows distribution code "2" for excess contributions. Mine initially came with code "1" (normal distribution), which would have messed up my taxes completely. I had to request a corrected 1099-SA.

Great question about getting corrected 1099-SA forms! I had to call my HSA provider's customer service and explain that the distribution code was incorrect. They initially pushed back saying their system was right, but I had to escalate to a supervisor. The key was having documentation - I kept copies of my original excess contribution removal request form that clearly stated it was for excess contributions. I also referenced the specific IRS guidelines about distribution codes (Publication 969). Once I showed them the written request and cited the IRS rules, they agreed to issue a corrected 1099-SA. It took about 3 weeks to get the corrected form, so definitely don't wait until tax season to check this! I'd recommend reviewing your 1099-SA as soon as you receive it in January and calling immediately if the code is wrong. Also, for anyone dealing with this - save EVERYTHING related to your excess contribution removal request. Having that paper trail made all the difference when I needed to prove what I had actually requested.