I actually tried this already but unfortunately the company I worked for in 2018 was bought out in 2020 and the new owner purged a lot of the old records. They told me they only kept the "legally required minimum" which apparently didn't include my 2018 W-2. Really frustrating since this would've been the easiest solution!

That's definitely frustrating! In that case, your next best option is to request a Wage and Income Transcript from the IRS, which will show all reported W-2 information. This is different from the Tax Return Transcript you tried to access online. You can request this specific transcript using Form 4506-T (check box 8 on the form). Even though the online system only goes back to 2020, the IRS can provide Wage and Income Transcripts going back 10 years when requested via mail or fax using this form. This would show exactly what was reported to them on your W-2, including state withholding information.

This is not entirely accurate. While the burden of proof does shift in certain circumstances, the general rule is that taxpayers bear the burden of proving their income, deductions, and credits. If the state is claiming you had income but paid no tax, they usually have some evidence of the income (like W-2 reporting) but are claiming you never filed or paid. The statute of limitations point is valid though - worth checking your state's specific rules.

Can you actually enforce something like that legally though? I thought tax benefits were separate from custody agreements?

You absolutely can include tax arrangements in your custody agreement, and the court can enforce it. Many parenting plans specifically address who claims the child in which years (alternating, always one parent, etc). If it's not in your custody order yet, you can still create a separate written agreement. While not as strong as a court order, it's still evidence of your agreement if there's a dispute later. Some parents even use a service like Our Family Wizard to document these agreements, which gives them more weight since the communication is timestamped and can't be altered later.

No, you can't split federal and state. Most states require your filing status and dependents to match your federal return. It would raise red flags if two different people claimed the same kid on federal vs state returns.

Have you noticed any difference between tax prep software? Like does using TurboTax vs H&R Block vs FreeTaxUSA change how fast the IRS processes things?

I haven't noticed any consistent difference in processing speed between tax software options. I've used TurboTax, H&R Block, and FreeTaxUSA over the years, and the refund timing seemed to depend much more on when I filed and what was on my return rather than which software I used. All the major tax software providers use the same electronic filing system to submit to the IRS, so once your return is accepted, the processing time should be the same regardless of which program you used to prepare it. The IRS doesn't prioritize returns based on which software was used.

Totally agree. And the really annoying thing is when it says "We cannot provide any information about your refund" and tells you to call, but then when you call they just tell you to check the website. It's a never-ending cycle of frustration!

What happened after you got hit with the tax bill? Did you ever try to get it corrected or did you just pay it? I'm in a similar situation but with a restaurant that closed down, so I'm not even sure if the owner is still around to issue a corrected form.

I ended up paying it the first year because I didn't know any better. The second year, I filed the SS-8 form proactively and got a determination letter from the IRS saying I was indeed an employee. I took that to the owner, who initially resisted but changed his tune when I mentioned the potential penalties for misclassification. He issued a corrected W-2 for that year. For the previous year, I filed an amended return with the determination letter and got about $1,600 back. Even if your restaurant closed, you can still file the SS-8 and possibly get a determination that helps with your taxes. The owner being gone doesn't prevent the IRS from making a ruling on your status.

Getting paid through Cash App doesn't determine your worker status - that's based on the nature of your working relationship. However, you're right about the reporting change. Cash App (and similar payment services) are required to issue 1099-Ks for accounts receiving over $600 in payments for goods and services. This is separate from whether your employer issues a 1099-NEC or W-2. The IRS may notice if you receive a 1099-K from Cash App but don't report that income, regardless of whether you also get a 1099 or W-2 from the employer. So the income definitely needs to be reported either way, but the classification as employee vs. contractor determines HOW you report it and how much tax you pay.

Thanks for explaining! So if I'm understanding right, I could potentially get both a 1099-K from Cash App AND either a 1099-NEC or W-2 from my employer for the same income? That seems like it would cause confusion with the IRS. How would I make sure I'm not double-reporting the same income?

This is extremely helpful, thank you! One question - when creating this transaction log, should I calculate the USD value of the BTC at each transfer point? Or just focus on the final gain/loss numbers?

Yes, you should definitely record the USD value of the BTC at each transfer point. This is crucial because the IRS considers each crypto-to-fiat or crypto-to-crypto exchange a potentially taxable event, and those values establish your cost basis. When you transfer BTC to your forex broker and convert to fiat, you technically have a taxable event based on whether your BTC gained/lost value since purchase. Then your forex trading creates separate taxable events. Finally, when converting back to BTC, there's another taxable event. Recording the USD values at each step creates a clear audit trail that properly separates the crypto transactions from the forex transactions.

Forex trades under Section 988 (which is the default for most retail forex traders) are NOT subject to wash sale rules. They're treated as ordinary income/loss rather than capital gains/losses. However, if you elected to use Section 1256 treatment (which most retail traders don't), then different rules would apply. Make sure you're consistent in your treatment though. You can't cherry-pick which trades fall under which section to maximize tax benefits.

Thanks for clearing that up! I've definitely been treating everything as Section 988 since I'm doing short-term day trading, so I should be good. I'll override the flag in my tax software and make a note explaining that these are forex trades under Section 988 and therefore exempt from wash sale rules.