I tried both methods last year. My home is expensive (Bay Area) so Regular Method gave me about $3,200 more in deductions than Simplified. But honestly, the paperwork and record keeping wasn't worth the extra $700 in actual tax savings for me. This year I'm just doing Simplified. Life's too short to spend weekends calculating the square footage percentage of my utilities lol.

Great discussion here! I'm in a similar boat as the OP and this thread has been super helpful. One thing I'd add from my CPA's advice - if you're planning to sell your home within the next few years, the Simplified Method might be the safer bet to avoid the depreciation recapture headache that Zara mentioned. Also, for anyone considering the Regular Method, make sure you're tracking EVERYTHING throughout the year, not just at tax time. I learned this the hard way when I couldn't find receipts for repairs and utilities from 8 months ago. Now I use a dedicated folder (physical and digital) just for home office expenses. The audit risk thing seems overblown based on what I've read, but good documentation is key either way. Sean, with your 150 sq ft dedicated office, you're in a good position for either method - just comes down to whether the extra paperwork is worth the potential savings in your specific situation.

Have your parents considered creating a Spousal Lifetime Access Trust (SLAT) before 2026? My parents are in a similar situation (estate around $15M) and that's what their advisor recommended. Basically each spouse creates an irrevocable trust for the benefit of the other spouse and funds it with assets up to the current exemption amount. This "locks in" the higher exemption amount before it drops in 2026. The nice thing is that while the assets are removed from the taxable estate, the beneficiary spouse still has access to them if needed. It's not as simple as I'm making it sound (there are rules about not making them identical trusts), but it might be worth exploring.

Didn't see anyone mention this yet, but if a significant portion of your parents' $17M is in real estate or a family business, they might qualify for some additional exemptions or deferrals. Section 2032A can reduce the value of qualified real property for farms and businesses, and Section 6166 allows installment payments for estate tax when a business makes up a large portion of the estate. Also, don't forget about annual exclusion gifts - each of your parents can give up to $17,000 (in 2023, goes up periodically) to each recipient annually without touching their lifetime exemption. If they have multiple children/grandchildren, that can remove a significant amount from their estate over the next few years.

Has anyone tried just filing the amended return on their own? Im in a similar situation with a different company and don't trust them to fix it correctly at this point. Is the 1040-X form pretty straightforward to complete?

I'm dealing with a very similar situation right now with a different tax prep service. They missed including my HSA contributions on my return, and now I'm getting notices from the IRS about unreported distributions. One thing I learned is to immediately request a "Practitioner Priority Service" line callback if you have a tax professional involved (even if they messed up). The number is 1-866-860-4259. It's supposed to be faster than the regular taxpayer line, though still not exactly quick. Also, if TaxQuotes Inc. is an enrolled agent or CPA firm, you can file a complaint with the IRS Office of Professional Responsibility if they don't resolve this properly. That usually gets their attention pretty fast when their professional license could be at stake. Document everything - every phone call, email, and delay. If you end up owing penalties because of their error, you may be able to recover those costs from them later if you have good documentation of their negligence.

The community consensus on this is pretty clear: you're entitled to credits from previous tax years, but there's a right way to claim them. Most tax professionals recommend filing separate returns for each missed year rather than consolidating everything into your current return. This creates a cleaner record and reduces the likelihood of processing delays or verification issues. Remember that the IRS systems are designed to track tax obligations by year, and maintaining that structure typically results in fewer complications.

I went through this exact situation last year and can share what worked for me. I hadn't filed my 2022 return but needed to file 2023. My tax preparer advised me to file the missing 2022 return first, then file 2023 separately. This approach took about 6 weeks total, but I received all my eligible credits without any complications. The IRS processed both returns smoothly and I got separate refunds for each year. While it might seem tempting to try to claim everything on one return, filing each year individually creates a clearer paper trail and follows the IRS's preferred process. Just my two cents based on personal experience!

Quick tip from someone who worked in tax prep: File the unfiled returns ASAP using the actual forms for each tax year (don't use current year forms for past years). You can download prior year forms from the IRS website. The sooner you file, the sooner you'll get any refunds you're entitled to. Also, you might need to mail in prior year returns rather than e-file them. And if you're missing W-2s or other tax documents, you can request a "Wage and Income Transcript" from the IRS which shows all information reported to them under your SSN. You can request this online through the IRS website by creating an account at irs.gov.

I'm dealing with a very similar situation right now - about 3 years behind on filing with taxes withheld from my paychecks the whole time. The stress and embarrassment kept me from dealing with it, but I finally started the process last month. One thing I learned that might help you: even though you're probably owed refunds, the IRS may have already filed substitute returns (called Substitute for Return or SFR) on your behalf if you're far enough behind. These automated returns don't include deductions or credits you're entitled to, so they often show you owing money even when you'd actually get refunds if you filed properly. I discovered this when I finally called the IRS and found out they had filed SFRs for two of my missing years, showing I owed about $3,000 total. But when I filed the actual returns with my W-2s and standard deductions, I was actually owed refunds for both years. So don't panic if you get scary notices - just get those proper returns filed as soon as possible to correct the record. The key is acting quickly before more time passes and you lose eligibility for refunds you're entitled to.