Would it be better to fax the response instead of mailing it? I've heard the IRS processing centers have huge backlogs of mail but faxes get entered into their system faster.

In my experience, faxing can be faster but only if you have confirmation the fax went through successfully. The IRS fax lines are often busy or don't connect properly. I'd recommend doing both if possible - send via certified mail for your records and also try faxing. The key thing regardless of method is making your documents super clear and organized. Put your notice number, SSN (last 4 digits only for security), and tax year on every single page. The IRS processes millions of pieces of correspondence and making yours easy to identify with the right case helps tremendously.

That doesn't sound right. If someone incorrectly claimed you as a dependent when you weren't actually qualified to be one, you should still be eligible for your own stimulus payment. The IRS even has procedures for resolving these exact situations.

Thank you for explaining this! The owner is coming in next week and I'm definitely going to bring this up. Should I bring anything specific to show him, or just explain the situation?

Bring a copy of your most recent pay stub that shows the discrepancy. If you can, calculate the approximate difference between what you actually received in tips versus what was reported as your income. Having specific numbers will make your case stronger. Also mention that correcting this benefits the restaurant too since they're currently overpaying employer-side payroll taxes (around 7.65% of the inflated amounts). Most owners respond better when they realize they're losing money. Good luck with the conversation!

Yes! You can file a Form 843 "Claim for Refund and Request for Abatement" along with an amended return (Form 1040-X) for up to 3 previous tax years. You'll need documentation though - any records of your actual tip distribution will help. I did this for 2022 and 2023 and got back almost $1,400 in total.

Thanks for bringing this up. I actually have been confused about which table to use. My birthday is in August, so I guess that would be the second half of the year? Do you know which specific IRS table I should be looking at for this calculation?

Since your birthday is in August (second half of the year), you would use the Uniform Lifetime Table for calculating your RMD. The IRS updated these tables in 2022 to reflect longer life expectancies, which actually gives you slightly smaller required distributions. Just take your IRA balance as of December 31, 2023, and divide by the factor that corresponds with your age in 2024. For example, if you turned 73 in 2024 (which is now the RMD starting age for many people), your factor would be 26.5, meaning you divide your balance by 26.5 to get your RMD amount.

The same basic rules apply to 401ks - distributions are taxed in the calendar year received. However, there's one important difference with 401ks: if you're still working at the company where you have the 401k, you might be able to delay RMDs from that specific 401k until you retire (doesn't apply to IRAs or old 401ks from previous employers). This is called the "still working exception.

He did get a special completion grant in his final semester that wasn't expected. But it was only about $5k, nowhere near these massive amounts showing up. And nothing that would explain an extra $80k in box 5 when his actual grants were only about $22k total for the year. I'm definitely going to contact the university tomorrow. Just needed to make sure I wasn't missing something obvious about how these forms work before I start that process.

The completion grant could be part of it, but you're right that it doesn't explain the magnitude of these discrepancies. One other possibility is if there was some loan forgiveness or conversion of loans to grants. Some schools have programs where initial loans get converted to grants upon graduation or completion of certain requirements. These conversions get reported in a really confusing way on the 1098-T. Either way, it's definitely worth getting clarification from the university. Ask them for a full accounting of how they arrived at each box amount.

But wouldn't the American Opportunity Credit be unavailable if the student already claimed it for 4 years? I thought that was the maximum lifetime limit?

That's a really interesting approach I hadn't considered! Did you have to present this to just your direct supervisor or did you have to go higher up the chain? And approximately how long did the process take from proposal to actually seeing the increase?

I started with my direct supervisor to get their support, but the actual presentation was to both my supervisor and the department director since salary adjustments required director approval in our county structure. The entire process took about 7 weeks from my initial proposal to seeing the increase in my paycheck. The longest part was waiting for the HR committee to review the justification, which took about 3 weeks. The key was framing it as a "market adjustment" based on added skills rather than a traditional raise, which allowed them to use a different budget category than the frozen raise pool.

This is actually a great workaround! My agency does something similar with a "professional development day" policy where we get 16 hours annually to use for approved courses/conferences. You still pay the registration fees, but at least you're on the clock. Worth asking if your county has any similar policies.