Do you know if you can amend through a different service than you originally filed with? I used FreeTaxUSA for my original return, but I've heard their amend feature isn't great.

Unfortunately, you generally need to amend through the same service you used for your original return. This is because the amend feature needs to access your original tax data as a starting point. If you're not happy with FreeTaxUSA's amend feature, you could try contacting their customer support to see if they can help walk you through it. Alternatively, you could use a different service to create that "practice return" I mentioned to calculate your corrected amounts, but you'd still need to manually fill out the 1040X form. The IRS also has fillable PDF forms on their website that do some basic calculations for you.

This is really important info! Is there a way to calculate exactly how much interest I might owe? My amendment is from last year's taxes and I only just realized my mistake now.

The IRS uses a quarterly interest rate that changes periodically. For a rough estimate, the rate has been around 5-7% annually for the past couple of years. To calculate it, take the additional tax you owe, multiply by the interest rate (let's say 6%), and then calculate based on how many months have passed since the original due date. For example, if you owe $500 additional tax from last year's return that was due about a year ago, you'd be looking at roughly $30 in interest (500 × 0.06 = 30). There could also be a failure-to-pay penalty of 0.5% per month up to 25% of the unpaid tax. Your best bet is to pay as soon as possible to stop additional interest and penalties from accruing.

Couldn't those incentives be handled through direct spending programs instead of tax code complexity tho? Why mix revenue collection with social policy?

That's a valid point in theory. Direct spending programs could replace tax incentives, but there are practical challenges. Our political system has historically found it easier to create tax incentives than to approve new spending programs. Tax benefits are less visible and often face less opposition. The other issue is implementation. The IRS already has mechanisms to verify income, process claims, and issue refunds. Creating new agencies or programs to handle what the tax code currently does would require significant infrastructure. Just look at how complicated some benefit programs are to administer compared to tax credits.

This is such an important point that gets overlooked! A true flat tax would need to treat all income the same regardless of source. Otherwise it's just shifting more burden to wage earners.

That's absolutely wrong information. The IRS has been massively increasing their enforcement staff and technology. They're specifically targeting incorrect filing status claims because they're easy to detect with automated systems. The "they only audit poor people" thing is outdated - they're now using AI to flag suspicious returns across all income levels.

maybe ur right but all i know is my cousin has been filing hoh for years with no dependents and hasnt been caught. but yeah i guess the risk isnt worth it for most people. just saying the system is already rigged against regular people. i did hear they got a bunch more funding recently so maybe they will start catching more people. still think its stupid that we have such a complicated system in the first place.

Thanks for this insight! That makes more sense than them all incorrectly filing as HoH. I'll ask them about their W-4 withholding. I've always just chosen the standard withholding, but maybe they're having additional amounts taken out. That would explain the bigger refunds without them actually doing anything wrong!

So what happens if they never fix it and tax season ends? Can you still file with the wrong W-2 and fix it later?

You can file your tax return with the information you have and later amend it when you receive a corrected W-2. However, I recommend trying to get the corrected W-2 before filing if possible. If you must file before receiving the correction, you should consider filing Form 4852 (Substitute for Form W-2) along with your tax return. This form allows you to provide what you believe are the correct numbers based on your paystubs and other documentation. Be sure to explain the situation in the form and keep copies of all your evidence showing the correct withholding amounts.

This is the best advice here. My company messed up my W-2 last year, but I was able to show them my December paystub with YTD totals that proved their numbers were way off. Print everything out and highlight the numbers!

Thanks for this! The corporation is definitely a DFIC in our case. The problem I'm having is that the client acquired the SFC in 2016, so we do have that year's info, but I wasn't sure if we needed to somehow account for pre-acquisition E&P for the Section 965 calculation or if we could just start with the E&P as of the acquisition date.

You should use the acquisition date as your starting point. The Section 965 inclusion applies to the shareholder's pro rata share of accumulated post-1986 E&P, but only for the period during which the foreign corporation was an SFC with respect to your specific U.S. shareholder. Pre-acquisition E&P wouldn't be included because your client didn't have a pro rata share of that E&P (they weren't a U.S. shareholder of the SFC during that time). Start with the E&P as of acquisition and then track forward to the measurement dates.

Generally, no. FTCs related to Section 965 inclusions should only be available for the taxes paid during the period your client was a US shareholder. The same principle applies - if they weren't a shareholder when the taxes were paid, they can't claim the credits associated with that pre-acquisition period.