Thanks for this tip! I just created an account and checked my transcript. Looks like the casino did submit my W-2G to the IRS about a week ago (which is frustrating since they never sent it to me). At least now I can see the exact amounts to report on my return. Gonna file tomorrow. Really appreciate everyone's help here - I've been stressing about this for weeks! So relieved to know I'm not facing penalties since I'm due a refund.

Happy to help! That's exactly why I mentioned checking the transcript - casinos are usually good about reporting to the IRS but sometimes slow about sending the actual forms to winners. Now you have all the official information you need to file accurately. The transcript method is super useful for all kinds of missing tax documents. I've used it for missing 1099s and W-2s in the past. Makes filing much easier when you can see exactly what's been reported under your SSN.

I'd recommend FreeTaxUSA over TurboTax for this situation. It's way cheaper and handles missing forms just as well. I used it for a similar casino winning situation last year.

Your accountant is partly right, but timing is crucial. Recharacterization was an option before the tax filing deadline (including extensions) for the year of the contribution. For 2019 contributions, that deadline would have been around July-October 2020 (extended due to COVID). Since we're in 2025 now, recharacterization is no longer an option for 2019 contributions. The OP will need to go with the Form 5329 and penalty approach. But your suggestion is definitely good advice for anyone who catches their over-contribution more quickly!

That's a really good point I hadn't considered. I haven't calculated the exact earnings on the excess portion, but given market performance since 2019, it's probably significant. If I'm using the "absorption" method by under-contributing in 2021, do I still need to worry about the earnings issue? Or does that only apply if I'm physically removing the excess contribution?

If you're using the "absorption" method by under-contributing in a later year, you don't need to worry about withdrawing the earnings. The earnings stay in your Roth IRA and continue growing tax-free, which is actually a nice benefit! The earnings only become an issue if you physically withdraw the excess contribution. In that case, you'd need to calculate and withdraw the proportional earnings as well. Since you've already effectively "fixed" the excess through your 2021 under-contribution, you just need to file Form 5329 for 2019 and 2020 to pay the penalty for those years. The earnings can stay put in your account.

Do loan interest and registration fees count as separate deductions with standard mileage too? Or are those already included in the standard rate?

Loan interest and registration fees are already included in the standard mileage rate, so you can't deduct those separately if you choose that method. That's one reason why actual expenses might be better for some drivers, especially in states with high vehicle registration fees. If you use your vehicle for both personal and business use, you'd need to calculate the business percentage of these expenses if you go with the actual expense method. For example, if you use your car 70% for delivery driving and 30% for personal use, you could only deduct 70% of your registration fees and loan interest.

What if you forget to turn on the app sometimes? Does the IRS accept reconstructed mileage logs? I'm terrible at remembering to track this stuff consistently.

Do you have to wait until they assess the penalty before requesting abatement? Or can you be proactive and request it when you file?

You generally need to wait until they assess the penalty before requesting abatement. The IRS typically sends a separate notice about penalties after processing your return. When you get that notice, that's when you should call and request the First Time Penalty Abatement. You can't really request it proactively when filing because the IRS needs to calculate the penalty first. The good news is that if you qualify, they'll usually grant it without much hassle as long as you've had a clean compliance record for the previous 3 years.

This is such a good point. I'm in California and their underpayment penalties are actually worse than the federal ones. Had to pay almost 9% penalty on what I owed to the state.

Did they ever come to your house or anything? That's what I'm worried about. Also did it affect your credit score?

They never came to my house - that's pretty rare unless you're being investigated for tax fraud involving large amounts of money or criminal activity. The IRS generally handles everything through mail notices and phone calls before taking more serious collection actions. It absolutely destroyed my credit score for years. The tax liens showed up on my credit report and dropped my score by over 100 points. This affected my ability to get apartments, car loans, and credit cards. Even after I paid everything off, the damage lingered for a while. The credit reporting rules have changed somewhat since then, but tax problems can still indirectly affect your credit when they impact your financial situation.

Wait so if I file for an extension I still need to pay what I think I might owe? How do I even calculate that without my W-2??

Yes, you're expected to make a good-faith estimate of what you might owe and pay that amount when you file the extension. Without your W-2, you can estimate based on your final paystub of the year, which usually has year-to-date information. Most paystubs show how much federal tax was withheld throughout the year. If you don't have your last paystub, you could also estimate based on last year's return if your income situation was similar, or check your bank deposits to calculate approximately what you earned and estimate taxes from there. Even if your estimate isn't perfect, showing that you made a reasonable effort to comply will usually help reduce penalties.