14 What if I didn't officially claim the car for business use but I did use it sometimes for side gig deliveries? Do I still need to worry about this depreciation thing?

7 If you never claimed the car as a business expense on your tax returns, then you don't have to worry about depreciation recapture. The concern only applies if you took actual tax deductions for business use of the vehicle in prior years. However, if you did use it for your side gig but never claimed the deductions you were entitled to, that's a different issue - you missed out on potential tax savings in previous years, but it won't affect how you report the sale now. You'd simply use your original purchase price as your basis (minus any depreciation you actually claimed on tax returns, which in your case sounds like zero).

11 Technically, all capital gains should be reported regardless of size. But in reality, the IRS has bigger fish to fry than a $250 gain on a personal vehicle. Most people don't even report personal vehicle sales unless they're significant gains.

I filed through a CPA but want to check their work before asking them to amend. Does the interest paid on a home equity loan also count as mortgage interest for tax purposes? I know there used to be some difference.

Home equity loan interest is deductible only if the loan was used to buy, build, or substantially improve the home that secures the loan. If you used the money for other purposes (like paying off credit cards or student loans), the interest isn't deductible anymore. This changed with the 2017 tax law. Also, there's a limit on total mortgage debt for interest deductions - you can only deduct interest on the first $750,000 of mortgage debt ($375,000 if married filing separately) for loans taken out after December 15, 2017. For older mortgages, the limit is $1 million.

The IRS Tax Withholding Estimator is just for calculating paycheck withholding, not for figuring out amended returns. It's really confusing how few official calculators the IRS actually offers! I ended up just using FreeTaxUSA to recalculate - you can enter all your info there for free and it shows you the result without paying unless you actually file.

Oh crap, I didn't even think about state taxes. I lived in Illinois for two of those years and New York for part of another before moving abroad. Are the processes similar for catching up on state taxes? Do I need to file state returns before federal?

The processes are similar but each state has its own forms and procedures. Illinois and New York both have relatively straightforward processes for filing past-due returns, but they'll have different forms than what you're filing federally. Both states maintain prior year forms on their tax department websites. You don't necessarily need to file state before federal - you can work on them simultaneously. However, since most state returns start with your federal AGI or taxable income, it often makes practical sense to complete your federal return first. Just be aware that both states may have their own penalties and interest for late filing, separate from the IRS penalties. New York in particular can be quite aggressive with penalties, so don't delay getting those filed once you start the process.

This! The FBAR penalties are no joke. My cousin got hit with a $10,000 penalty for a non-willful violation. If they determine it was willful, penalties can go up to $100,000 or 50% of the account balance. Definitely something to take seriously!

Should they still file identity theft paperwork if it was just the check that was stolen and not someone filing a fake return? Is that still considered tax identity theft or just regular check fraud?

Yes, they should absolutely still file the identity theft form. The IRS defines tax-related identity theft as anytime someone uses your personal information for tax purposes without permission. When someone manages to intercept and deposit a tax refund check, they've typically obtained enough personal information to compromise your tax identity. They likely know your name, address, SSN, and filing status. This level of information means they could potentially file a fraudulent return next year before you file your legitimate return.

I had this exact situation! In my case, someone had accessed my online tax account and changed my direct deposit information before my refund processed. The IRS initially told me it was my error too, but after filing Form 3911 and being persistent, they admitted their system showed the banking info had been changed after I filed. Make sure you specifically ask if your banking details were altered after your return was accepted. Sometimes the frontline representatives don't check the account change logs unless you specifically ask.

I hadn't even thought about state taxes! I'm in California - do you know if their rules are similar to the federal ones for discharge?

California generally follows similar rules to the federal discharge rules for income taxes, but there are some important differences. California has its own timing requirements, and certain types of California tax debts (like sales tax if you had a business) are never dischargeable. The key with California is making sure all required tax returns have been filed with the state before bankruptcy. California can be particularly aggressive with tax collection after bankruptcy if they determine any taxes weren't properly discharged. I'd definitely recommend discussing your specific California tax situation with your bankruptcy attorney, as state-specific issues can sometimes be overlooked.

How did you handle filing taxes after that? Did you have to file separately or could you still file jointly? We're in a similar situation.