Sometimes tax preparers use incorrect terminology with clients. A good CPA would never tell someone who's still legally married that they can file as "Single" - that's just wrong. But they might have been referring to Head of Household status, which is technically a separate filing status from both "Single" and "Married Filing Separately.

That's really important info - thanks for pointing this out! Do you know how long after a foreclosure a lender typically waits before sending a 1099-C? I'm trying to budget and plan for the worst-case scenario.

In my experience, lenders usually issue the 1099-C in January of the year following when they make the decision to forgive the debt. However, this can vary widely. Some lenders will issue it the same year as the foreclosure, while others might wait several years. The tricky part is that the decision to forgive the debt (and thus issue a 1099-C) is separate from the decision not to pursue a deficiency judgment. A lender might not seek a deficiency judgment but still keep the debt on their books for years before officially "canceling" it and triggering the tax consequences.

This is good info, but I'm confused about how to calculate the value of assets. Do I use market value? And do I include retirement accounts and other stuff I can't easily liquidate?

Wait, so I'm already in trouble for not paying quarterly taxes this past year? Will I get penalties? How do I even figure out how much I was supposed to pay each quarter?

Yes, you may face penalties for not making quarterly payments. The IRS calls these "failure to pay estimated tax" penalties. The penalty rate is currently around 3-4% of what you should have paid. To figure out what you should have paid, you generally need to pay either 90% of this year's tax or 100% of last year's tax (110% if your income was over $150,000) divided into four equal payments. For a first-time 1099 earner, this is tricky since you don't have a previous year of self-employment to reference. Moving forward, use Form 1040-ES to calculate your quarterly payments for the new tax year.

Be careful with deducting "every coffee you buy when working." That's not how it works. Regular coffee while you're working at home isn't deductible - that's just personal consumption. You can only deduct meals when you're traveling for business or having a business meeting with a client or potential client, and even then it's only 50% deductible in most cases.

Thank you everyone for the advice! I checked my IRS transcript like you suggested and it looks like my return is still being processed. I think I'll try the Claimyr route to speak with someone before filing the amendment. One question - if I do end up needing to amend, should I wait until I receive my original refund first or can I submit the amendment while the original is still processing?

Definitely wait until your original return is fully processed and you receive your refund before filing an amendment. Filing an amendment while the original is still in process creates a high risk of the two filings conflicting with each other, which can lead to significant delays or even trigger unnecessary review flags. When you call the IRS, ask them to check if they're already planning to adjust your Recovery Rebate Credit automatically. Many taxpayers are finding that the IRS is fixing these stimulus payment issues without requiring an amendment. The agent should be able to tell you if you need to amend or if they can handle it on their end.

I had the same experience with my 2019 amended return. The tool showed "received" for almost 8 months before finally updating to "adjusted." If you need a more accurate status, you'll have better luck calling and speaking with a representative. They can see more detailed status info in their system than what shows on the public tracker.

Thanks for mentioning Form 3921. Will this form show the AMT adjustment amount or do we need to calculate that ourselves? Our state (California) doesn't have different rates for capital gains vs regular income, but I'm still trying to maximize the federal tax benefits and use up those carryover losses if possible.

Form 3921 won't calculate the AMT adjustment for you - it just provides the information you need to do that calculation yourself (or that your tax software will use). The form shows the exercise price, fair market value at exercise, and date information you need. California is indeed one of those states that taxes all income at the same rates regardless of whether it's capital gains or ordinary income. But given your federal carryover losses, it's worth talking to a tax professional about timing. Even though the ISO exercise+immediate sale would be ordinary income, there might be other strategies to utilize those capital loss carryovers in the same tax year.

TurboTax can handle basic ISO scenarios, but honestly, if you're dealing with a significant amount (sounds like you are), I'd go with a CPA who specializes in equity compensation. I made the mistake of using TurboTax last year and missed an AMT credit carryforward that cost me about $3,400. A good CPA will save you more than they cost.