Thank you all for the advice! I feel much better about waiting now. Quick follow-up question - once I do get my refund, should I file the amendment immediately or is there any benefit to waiting a bit longer? And will FreeTaxUSA walk me through the process step by step?

I'd recommend waiting about 2-3 weeks after receiving your refund just to be sure everything has fully processed in the IRS systems. That timing worked well for me with no issues. Yes, FreeTaxUSA has a pretty straightforward amendment process. When you log in to your account, there should be an option for "Amend Return" that will walk you through each step. It will pull all your original information and then guide you through adding the 1099-G details. It automatically generates the 1040-X form with the correct before/after columns that the IRS requires.

Georgia does the same thing! I had to go hunting for mine this year too. They claim they send an email notification but I never got one. I think most states are moving this direction to save money on postage.

Thanks for confirming I'm not alone! Makes me feel slightly better about missing it. I really wish they'd at least send a text or email reminder that the forms are available. Seems like states are saving money at the expense of taxpayer convenience.

That's a great point about the state agencies. Do you know if there's an easy way to find out which agency handles this in my state? I'm in Michigan if that helps.

For Michigan specifically, you'd want to contact the Department of Licensing and Regulatory Affairs (LARA). They handle professional licensing and regulation for tax preparers. Their website has a complaint form you can fill out. If your preparer claimed to be a CPA but wasn't, that's also something LARA would be interested in knowing about. In addition to filing with them, the Michigan Attorney General's office has a Financial Crimes Division that takes complaints about financial fraud, which this could qualify as.

Exactly! Check box 128 on your Form 1040 from last year (or corresponding box if it was a different tax year). A legitimate preparer must sign and include their PTIN. If they didn't, that's an immediate violation.

Thanks for this advice! I'm still waiting on those statements from T-Rowe, but this gives me a good framework for organizing everything. Do you think I should attach some kind of explanation with my tax return explaining why I'm reporting different figures than what's on the 1099-Q?

You don't need to attach an explanation to your regular tax return. When you report a distribution from an education account on Form 8863, you're only reporting the taxable portion anyway. If you're concerned, you can certainly keep a written explanation with your tax records that you could provide in case of questions. But don't send additional documentation unless specifically requested by the IRS.

I had this issue spanning 4 years of distributions. What worked for me was calculating the initial ratio of contributions to earnings before ANY distributions started, then applying that same ratio to all distributions. So if your account was 80% contributions and 20% earnings when you first started taking money out, you'd consider all distributions to be split that same way.

Thanks, that makes sense. I think I've actually been doing it wrong then. I've been trying to recalculate the ratio each year which has been a total nightmare with all the market fluctuations. I'll try using the initial ratio approach instead.

This is actually not correct advice for home office expenses. Taking distributions instead of proper reimbursements can cause you to miss out on legitimate business deductions. Distributions aren't deductible by the S-Corp, while properly documented home office expenses are.

You're right that distributions themselves aren't deductible, but my point was more about simplifying the overall approach. I should have been clearer - the S-Corp can still pay for legitimate business expenses, but the remaining profits can be taken as distributions rather than creating complex reimbursement structures. The key is making sure you're taking reasonable salary first before any distributions, which keeps the IRS happy. I think people get too caught up in maximizing every possible deduction and end up creating paperwork nightmares that increase audit risk.

I use QuickBooks for my S-Corp and handle home office reimbursements through the "Expense" feature. I categorize them as "Office Expenses" and make sure to put detailed memos about the business purpose. Then when I run payroll, I don't include these amounts since they're business expenses, not compensation. Also important: keep a separate spreadsheet showing your calculation of the business percentage of your home to support the reimbursement amount. QuickBooks doesn't have a built-in way to track that part.

That's super helpful, thank you! I've been lumping everything together which probably explains why I've been confused about the W-2 reporting. I'll separate them out as you suggested.

Thank you so much! I'll send you a message right away. When you implemented it, what was the most challenging part for a very small operation? And did you find any particular resources helpful for the risk assessment portion?

The most challenging part was definitely creating reasonable security controls for customer data without breaking the bank. Simple things like implementing password managers and enabling two-factor authentication gave us big security improvements without major costs. We also created a very basic security training that takes about 20 minutes to go through with new employees. For the risk assessment, NIST has a publication called "Small Business Information Security: The Fundamentals" (NISTIR 7621) that was incredibly helpful. It has a straightforward approach to identifying your most important information assets and the realistic threats to those assets. Much more practical than the enterprise-focused guides I found elsewhere.

Great question about applicability. A WISP is legally required in some states (like Massachusetts) for any business that collects personal information of residents, regardless of size. In other states, requirements vary. However, even when not strictly required by law, many client contracts and cyber insurance policies now require a documented security program. So it really depends on what kind of information the business handles, where their customers are located, and what contractual obligations they have. Since the original poster mentioned it's required for a new client, that's likely a contractual requirement rather than a statutory one.