That's really helpful - I'll make sure she focuses on those specific credits first. Is there anything else she should have ready besides the Form 8867 and supporting documentation?

She should also have her written due diligence procedures available - even if it's just a basic checklist of what she asks clients and what documents she collects. The IRS wants to see that she has a consistent process. Also have her review her records for any cases where she might have rejected claiming a credit when a client couldn't provide adequate documentation. This shows the IRS she's not just rubber-stamping everything. And remind her that they'll likely ask questions about her knowledge of the eligibility requirements for these credits, so a quick review of the current rules wouldn't hurt.

Is there a way to know which returns they'll select? My practice got notice of a visit too and I'm freaking out trying to organize everything!

I've never heard of the Taxpayer Advocate Service. Do they help with complicated situations involving multiple years and different income sources? Also, do they help negotiate payment plans or is that a separate process?

Yes, they absolutely help with complicated multi-year situations - that's actually their specialty. My case involved W2 income, freelance work, and some investment income across several years. They're particularly helpful when your case has special circumstances or when you've tried to resolve issues through normal IRS channels without success. The advocate can help with the entire process including setting up payment plans and exploring options like Offers in Compromise if you can't pay the full amount. They'll look at your financial situation holistically and recommend the best approach. They can even request holds on collection activities while you're working with them. To contact them, call 1-877-777-4778 or find your local office on the IRS website.

This is a really good point. My brother thought he'd owe thousands, but ended up getting about $1,500 back because his W2 withholding more than covered what he owed from his side gig. Don't assume you'll owe until you run the numbers!

How do you calculate the right amount for line 4(c)? Is there a formula or something? Also, is there any risk to withholding too much?

A quick way to estimate is to take the amount she owed this year ($320) and divide by the number of paychecks she receives annually. If she's paid biweekly, that's 26 paychecks, so about $12.50 per check. I suggested $25 to give a buffer for a small refund rather than owing. There's no real risk to withholding too much except that you're giving the government an interest-free loan of your money until you file your taxes and get a refund. Some people actually prefer larger refunds as a form of forced savings, even though financially it's not optimal.

This happened to me too! My employer reclassified me as a different type of employee with the same hours and slightly higher pay, but my withholding dropped by almost 40%. Ended up owing $900 and was NOT happy about it.

Do you know which states offer free filing? I'm in Ohio and always end up paying for state filing even when I get the federal for free.

I don't have a comprehensive list for all states, but I know Ohio has something called Ohio I-File which is a free electronic filing service. It's separate from the IRS Free File program though, so you'd need to go directly to the Ohio Department of Taxation website to access it. Many states actually do offer some form of free filing, but they don't advertise it well. Check your state's tax department website and look specifically for terms like "free file" or "e-file." Sometimes you need to dig around a bit to find the free options.

Next time try FreeTaxUSA - they handle HSA and basic investment stuff on their free version. I've used them for years and only pay like $15 for state filing. Their federal filing is free regardless of complexity for most situations.

Is there any way for an employee to confirm that their employer actually submitted the corrected W2 to the SSA? I'm worried my employer might have given me a corrected one but forgotten to update it with the government.

Unfortunately, there's no direct way for employees to verify SSA submissions in real-time. However, you can indirectly check by creating an account on the SSA website (my.ssa.gov) and viewing your reported wages after tax season. This won't help immediately for filing, though. Your best approach is to contact your payroll or HR department directly and ask them to confirm they've submitted the corrected W2 to the SSA. Most payroll systems automatically handle this when generating a replacement W2, but it's fair to ask for confirmation. If they're using proper payroll software, they should be able to tell you the submission date of the corrected information.

Good advice. I keep all my tax docs for 7 years just to be safe. Electronic copies are fine too - I scan everything and keep it in a secure folder.