I hadn't even thought about checking if the amounts are correct! Where exactly would I find Box 1 and Box 5 on the form? And if something isn't right, do I just call the financial aid office?

Box 1 is near the top of the form labeled "Payments received for qualified tuition and related expenses" and Box 5 is labeled "Scholarships or grants." Compare those amounts to your actual payment records and financial aid statements. If you notice a discrepancy, yes, call your school's financial aid office or sometimes they have a dedicated bursar or student accounts office. Explain the issue and ask them to issue a corrected 1098-T. They're usually pretty good about fixing these errors since they're required by law to report accurate information to the IRS.

This is good advice! I lost access to my 1098-Ts after graduating and had to pay my old university $25 per form to get copies when I needed them later. Such a pain.

Thanks for the response! Do I need to send the physical copies of Form 8949 or can I do this electronically? Also, should I be calling the number on the notice or is there a better way to handle this?

You should respond in the same format as the notice you received. If they sent a physical letter, send back physical forms. The notice should have specific instructions about how to respond - follow those exactly. There should be an address listed specifically for responses. Calling can be helpful, but honestly, with basis issues like this, written documentation is more important since you need to provide proof of your purchase prices. Make sure to keep copies of absolutely everything you send them. I'd also recommend sending it certified mail so you have proof of when it was delivered.

Do you need to include statements from the exchanges too or is the spreadsheet enough? I'm in a similar situation but some of my records are incomplete.

Does H&R Block have a free version? Cash App and FreeTaxUSA are appealing because they offer free or really cheap filing options. I don't want to spend $50+ on tax prep if I can avoid it.

H&R Block does have a free version but like all the "free" tax services, it's only free for simple returns. If you have anything slightly complicated (investment income, self-employment, itemized deductions, etc.), you'll end up having to upgrade to a paid version. Honestly, FreeTaxUSA is probably your best bet for affordable filing - their federal filing is free and state is only like $15. Cash App might be convenient for banking, but as you've discovered, it's pretty limited as a tax service. Whatever you choose, just stick with ONE service next year to avoid this headache!

Nothing complicated really - just standard W-2 income from one job and some basic interest income from my savings account. No major life changes or anything fancy. I just got lured in by Cash App's free filing and didn't realize they couldn't do my state taxes until after I'd already submitted the federal return.

If it's a simple return like OP described, they should definitely be able to file state-only through most services. I've used TurboTax for state-only before when I had a similar situation. Just make sure to select "I've already filed my federal return" option when you start.

Has anyone here actually successfully used the TAS recently? I tried back in 2023 for a different tax issue and they sent me a letter saying they were too backlogged to take new cases except in extreme hardship situations.

You're right that they've been overwhelmed in recent years, but their backlog has improved significantly in the last 6-8 months. The key is to clearly demonstrate the financial hardship the audit is causing you - be specific about any loans you've had to take, mental health impacts, inability to make financial decisions due to the uncertainty, etc. I've found that if you include supporting documentation of hardship with your Form 911, you're much more likely to be accepted. Also, calling your local TAS office directly (rather than just mailing in the form) can help get your case prioritized.

Thank you so much for this suggestion! I never would have thought of contacting my representative. Did you reach out to your House rep or Senator? And did they ask for anything specific besides the privacy form?

That sounds helpful! Do I need some kind of professional evaluation to do this component depreciation thing or can I figure it out myself?

For a single small rental property, you can probably DIY it with good documentation. Basically, you need to break out the costs of appliances, carpet, window treatments, etc. and depreciate them separately on a 5-7 year schedule instead of lumping them into the building's 27.5 year schedule. Professional cost segregation studies are typically used for larger properties or commercial buildings where the potential tax savings justify the cost. For your situation, just keep good records of anything you replace or upgrade, note the value, and depreciate those items on their shorter schedules. Most tax software can handle this if you set up each component separately.

This is so important! My brother didn't know this when he inherited our dad's rental property and he used the original purchase price. He missed out on thousands in depreciation deductions before his accountant caught the mistake.