That's similar to what I was thinking! Do you guys have kids? And if so, do you factor in the child tax credits at all when figuring out the split? Since those credits directly reduce your tax liability and increase the refund.

Yes, we have three kids. We don't specifically factor in the child tax credits separately because we feel like the proportional split based on withholding already accounts for everything fairly. We look at it this way - whatever our total withholding was throughout the year is what created the refund. If I contributed 60% of that pool of money, I should get 60% of what comes back. The child tax credits and other deductions just determine the total amount that comes back, but don't change the proportion of who contributed what in the first place.

This is actually really smart. Why argue over a refund when you could just keep more of your money throughout the year? I did this last year and got my refund down from $3,200 to just $400. That extra money in my paychecks made a huge difference.

Do you know if the company itself is required to send you any tax forms annually or only when there's a sale/distribution? The startup I invested in hasn't sent me anything tax-related.

Private companies typically don't send tax forms annually unless they're making distributions to investors. When they do make distributions or when there's an acquisition, you should receive either a 1099-DIV (for dividends), 1099-B (for sale proceeds), or sometimes a Schedule K-1 if it's structured as a partnership. During the holding period, many startups send annual updates about the company status but not formal tax documents. That's why keeping your own records is so important. If they're not sending you any communication at all, I'd reach out to them directly to confirm your investment is properly recorded in their cap table. You don't want surprises when a liquidity event happens!

With a SAFE agreement, you generally don't report anything on your tax return at the time of the initial investment. SAFEs are considered open transactions for tax purposes, and nothing is reportable until a triggering event occurs (like conversion to equity during a priced round). When the SAFE converts to equity, that conversion itself is typically not a taxable event - your cost basis in the shares you receive will be the amount you initially invested in the SAFE. The holding period for capital gains purposes usually starts when the SAFE converts to equity, not when you purchased the SAFE.

That's a good point I hadn't considered. I don't think it would push me into another bracket - I'm solidly in the middle of my current one. And yes, they were qualified dividends. Should that change how I approach the amendment?

For qualified dividends, you'll need to make sure you're reporting them correctly on Schedule D since they're taxed at the lower capital gains rates rather than ordinary income rates. This shouldn't change your basic approach to filing the amendment, but it does affect which forms you'll need to update. If you're solidly in your tax bracket then you're right - the impact should be minimal. The tax difference will likely just be the capital gains rate on that $75, which at 15% would be around $11.25 plus maybe a small amount of interest. Not worth stressing too much over.

Did you have to pay any penalties? Or just the tax difference?

Thanks for this tip! I hadn't even thought about how to physically submit multiple years. Do they need to be sent to the same address or are there different addresses for back tax returns?

For most people, all prior year returns go to the same IRS processing center based on your state. The addresses are listed in the instructions for each year's 1040 form. But double-check each year's instructions separately because they do occasionally change the processing centers. If you end up owing for any year, I'd recommend sending those returns certified mail with return receipt. It costs a bit more but gives you proof of when you filed, which can be important for penalty calculations.

This! I got caught up on federal but forgot about state taxes. The state came after me with WAY worse penalties than the feds did. They even put a lien on my bank account which the IRS never did.

Ugh, good point. My state's tax system is completely separate from federal, isn't it? So I'll need to go through this whole process twice basically - once for federal and once for state.

That's really smart! I did claim them on last year's taxes so the EIN should definitely be on my old Form 2441. I'll check my copy of last year's return tonight. If I can't find my copy, is the transcript free to get from the IRS website?

Yes, getting your tax transcript from the IRS website is completely free! Just go to IRS.gov and search for "Get Transcript Online." You'll need to create an account if you don't already have one, and they'll verify your identity with some security questions. Once you're in, you can request a "Tax Return Transcript" for the previous year. It should show up immediately and you can download it as a PDF. Form 2441 will be included, and line 1 should have the provider's name, address, and EIN. Super easy and definitely faster than waiting for the IRS on the phone.

This happened to me 2 years ago. I wrote "BUSINESS CLOSED" in the EIN field and attached a statement explaining my attempts to locate the information. The IRS accepted it without any issues.