Thanks for the advice! I didn't itemize - I took the standard deduction. Would that have made a difference with how the gambling income was handled? I'm definitely saving everything from TurboTax, including recording our phone conversations (with their knowledge).

Yes, that makes a significant difference. Gambling losses can only be deducted if you itemize deductions, and even then, they're limited to the amount of your gambling winnings. Since you took the standard deduction, you couldn't deduct those losses at all, which means your AGI should definitely have included all the gambling winnings. This actually makes TurboTax's error even more clear-cut. They should have included all gambling winnings in your AGI calculation regardless of your losses or deduction choice. Definitely consult with a tax attorney - this is a textbook case of preparer error.

Did H&R Block end up covering any of your penalties or offering any compensation for their mistake? I'm dealing with something similar right now.

Banks are required by law to keep those records! Ask to speak to a supervisor in their tax document department, not just a regular customer service rep. If they still refuse, remind them that per IRS regulations they MUST provide you with copies of tax documents for at least 3 years. If all else fails, you can try filing Form 4506-T with the IRS to get wage and income transcripts that might show the IRA contributions even if you don't have the bank's forms. I had to do this when my credit union "lost" my 5498 records during a system update.

Thanks for this advice! I called again today and specifically asked for the tax document department instead of regular customer service. They still gave me trouble but when I mentioned the IRS regulations about maintaining records, their tone changed completely. They're sending me copies of all my 5498 forms from the last 4 years. I had no idea about Form 4506-T either, that's super helpful as a backup option. I'm starting to feel like we need a complete guide for dealing with banks that "lose" or mess up IRA contribution records!

This is really important info, thank you! Our letter arrived yesterday, so I'm guessing our 90-day clock is already ticking. Should we hire a tax attorney to help with the Tax Court petition if we can't get this resolved quickly? I'm worried about messing up the paperwork and losing our right to challenge this.

That's really helpful actually. Is that something I can just write in on the form? Like a specific dollar amount to take out extra? How did you figure out that $50 was the right amount?

Yes, on the current W-4 form, line 4(c) is specifically for additional withholding. You just write in the extra amount you want withheld from each paycheck. We calculated our $50 amount by looking at how much we owed last year ($1800) and divided it by the number of paychecks we each get annually (we both get paid bi-weekly, so 26 paychecks each). That gave us about $35 per paycheck, but we rounded up to $50 to be safe. It's not a perfect science, but it worked well for us. You could do the same calculation based on what you've owed in previous years.

I tried it but found it confusing tbh. Ended up just doing what someone suggested above - using the "married but withhold at higher rate" option and adding a little extra. Way easier and had the same result.

This is actually smart af. What savings account do you use? I've been thinking about doing something like this because my refunds are always tiny but I suck at saving.

Yes, there are income limits for the Earned Income Tax Credit (EITC). For 2025, if you're single with no qualifying children, you can qualify with income up to about $18,000. With one child, that limit increases to around $43,000. If you're married filing jointly, the limits are higher. At $38k with no children, you'd likely be over the limit for EITC, but if you have a qualifying child, you might still be eligible. There are other credits worth looking into though, like the Saver's Credit if you contribute to retirement accounts, or education credits if you're taking classes.

Thanks for sharing your experience! Could you clarify which specific tax form or schedule you used to list these expenses? And did you have to itemize deductions or was this handled differently?

I used Form 8863 (Education Credits) and claimed the expenses as part of my qualified education expenses for the American Opportunity Credit. The great thing is you don't need to itemize deductions to claim education credits - they're available even if you take the standard deduction. The form has a line specifically for required course materials, which is where these project expenses can fit. Just make sure you have documentation that clearly shows the project was required for your degree program!

This is critical advice! I got audited because I used outdated tax advice from a blog post. Always check that you're looking at the most current IRS publications. For education expenses, Publication 970 is the bible - they update it every year.