That's a really good point I hadn't considered. Do you know if there's any way to "make up" for those missed Social Security contributions? Or am I just permanently losing those quarters of coverage for retirement calculations?

When you file your back returns with Schedule SE for each year, you'll essentially be making up those Social Security and Medicare contributions (albeit with penalties and interest). The good news is that once you pay these taxes, those quarters will count toward your coverage for Social Security benefit calculations. There's no permanent loss of credit. The bad news is that self-employment tax is a significant amount (about 15.3% of your net earnings) on top of income tax. This often catches people by surprise when filing back returns. Make sure your tax professional looks for all legitimate business deductions on Schedule C to reduce your net profit, which in turn reduces your self-employment tax liability.

This is solid advice. I did exactly this when dealing with my unfiled returns. Filed the current year on time, then worked backwards. The revenue officer specifically mentioned this showed "good faith" and it seemed to help during negotiations. Also helped psychologically to feel like I wasn't continuing to dig the hole deeper.

Thank you so much for this checklist! I definitely didn't realize I needed my bank statements showing interest. How much interest needs to be reported? My savings account only earned like $25 last year.

You should report all interest income, even small amounts. Your bank should have sent you a 1099-INT form if you earned more than $10 in interest. Even if it's only $25, it's technically required to be reported. Don't stress too much about small amounts though. The IRS is mainly concerned with larger discrepancies. Just enter what you have documented and keep good records going forward. Tax software makes it really easy to enter these small amounts.

It depends on your situation, but generally if you're single and earned less than $12,950 in 2022, you're not required to file. HOWEVER, you should probably file anyway because you'll likely get back all the federal taxes that were withheld from your paychecks!

Is it worth paying for the deluxe or premium versions of these tax programs? I always use the free versions but wonder if the paid ones catch more deductions?

For most simple tax situations, the free versions are perfectly adequate. The paid versions add value mainly if you have more complex situations like self-employment income, rental properties, investments, or itemized deductions. The other benefit of paid versions is better support options - some offer tax pro review or the ability to chat with a tax expert if you get stuck. But if you just have W-2 income and take the standard deduction, you're generally fine with free versions. Just make sure you're using the actual free version and not getting upsold on features you don't need.

Second this! Been using FreeTaxUSA for 3 years now. When I switched from TurboTax I actually got a BIGGER refund with FreeTaxUSA because it found an education credit TurboTax missed. Plus they don't constantly try to upsell you on stuff.

Thanks for the validation! I was worried I'd missed something since it was so much cheaper. Good to know about the education credit too - I'll have to double-check that section since I'm taking some community college classes.

Thanks for the Free File link! Do you know if they handle state taxes too or just federal? I always get confused about which services include both.

Some of the Free File partners include free state returns, but not all of them. When you go to the IRS Free File site, you can see which providers offer free state filing along with federal. It varies by state too - some states have their own free filing programs separate from the federal Free File program. I'd recommend checking the specific provider details when the program opens in January. The IRS usually has a tool that helps you find which Free File option is best for your situation, and it will show whether state filing is included or not.

Great idea with the calendar reminders! Does anyone know if there's some kind of email alert system from the IRS where they notify you when filing season begins?

What kind of documentation did you need from your parent? My mom isn't great with paperwork and I'm worried about this exact situation.

I had my mom write a simple statement saying: "I confirm that [my name] provided over 50% of [brother's name]'s total support for the tax year, including [list specific things I paid for]." She signed and dated it, and I had it notarized just to be safe, though that might be overkill. The key was having her acknowledge that my contributions exceeded half of his total support. You could help your mom draft something similar - it doesn't need to be complicated. The IRS just wants confirmation from the person they live with that you're the primary financial supporter.

Yes, the value of lodging counts as support! The IRS considers the fair rental value of the home as part of the total support calculation. So if your dad provides free housing valued at say $1,000/month ($12,000/year), that counts as support from him.

Thanks for explaining that. Looks like I might not meet the 50% threshold then. The rental market where they live is really expensive, so even though I'm paying probably $15k annually for my sister's other expenses, the housing value might push my dad's contribution higher than mine.