Does he need to do anything special on his tax forms to show it was his primary residence even though he didn't meet the 2-year test? Is there a specific form or something?

There's no special form specifically for declaring a primary residence that doesn't meet the 2-year test. He would report the sale on Schedule D and Form 8949 like any capital gain, but the key is keeping those supporting documents we discussed in case of questions. If he qualifies for a partial exclusion due to work-related move, health reasons, or unforeseen circumstances, he would need to fill out Form 2119. But from what you've described, planned retirement and moving overseas probably wouldn't qualify as an unforeseen circumstance, so he should plan on paying the full capital gains tax.

Did they use TurboTax or some other tax software to figure all this out? I'm trying to decide if I need an accountant for my situation or if the tax software can handle these kinds of scenarios.

This is terrifying. So even though my spouse handled all the finances and made the decision not to pay these taxes without telling me, I could still be held personally liable? Do they ever consider these kinds of circumstances?

They do consider circumstances, but you'll need to prove you weren't a "responsible person" as defined by the IRS. The fact that you were an owner and involved in the business creates a presumption that you had authority. However, your tax attorney can help build a case based on your specific role. Key factors they look at: Who had check-signing authority? Who made financial decisions? Who had the power to determine which creditors got paid? If you can demonstrate your spouse exclusively controlled these functions and deliberately kept you in the dark, you may have a case. Document everything about your roles and responsibilities in the business.

This! I got transcripts and found out the collection agency was trying to collect on some taxes where the assessment date was 12 years ago. When I pointed this out, they immediately removed $9k from what I "owed" because it was past the statute. Collection agencies often don't check this.

1 Oh geez I hadn't even thought about state taxes! Do you know if Missouri has the same 6-year lookback period as the IRS? Or do I need to file all 10 years with the state?

22 Missouri generally follows the federal statute of limitations, so the 6-year lookback period is similar. However, there are some important differences. Missouri's Department of Revenue can be a bit more aggressive about collecting on older debts than the IRS in some cases. The good news is that Missouri offers voluntary disclosure programs that might help reduce penalties if you come forward voluntarily before they contact you. I'd recommend checking the Missouri DOR website or calling them directly after you get your federal situation straightened out. In my experience, state tax agencies are actually easier to reach by phone than the IRS.

8 Most of those "pennies on the dollar" tax relief companies are extremely misleading. What they're referring to is the IRS Offer in Compromise program, which is legitimate but has very strict qualification requirements that most people don't meet. These companies often charge thousands upfront with no guarantee of results. The reality is that if you have assets or a decent income, you likely won't qualify for significant reductions. The IRS has standard formulas they use to determine eligibility. You're better off working directly with the IRS or hiring a reputable local tax professional who charges reasonable fees. The IRS provides payment plans that most people can qualify for without needing a special "tax relief" company.

Thanks for the tip about checking that box on the W-4! I didn't know there was a specific option for multiple jobs. Does this mean I should check this box on both job W-4s or just the second one?

You should only check the multiple jobs box on one of your W-4 forms, not both. If you check it on both, you'll likely have too much withheld and end up with a large refund (which means you're giving the government an interest-free loan all year). For the most accurate withholding, I'd recommend using the IRS Withholding Estimator on their website. It lets you enter info from both jobs and will tell you exactly how to fill out both W-4 forms for the perfect withholding amount.

Did you find that working that many hours was worth it financially? After taxes, did you still come out way ahead? Wondering if killing myself with 70-hour weeks would actually leave me with much after Uncle Sam takes his cut.

But they did withhold Social Security and Medicare - just not federal income tax. Does Form 8919 still apply in my situation?

You're right - Form 8919 wouldn't apply in your situation since your employer did properly withhold Social Security and Medicare taxes. I misunderstood your original post. For federal income tax withholding issues, there unfortunately isn't an equivalent form. Since you correctly filled out your W-4, this is definitely the employer's mistake, but as others have mentioned, the IRS still considers the tax liability yours. Your best options are still to speak with management about potential compensation and set up a payment plan with the IRS for any amount you can't pay immediately.

This! I had a similar situation and got the penalties removed. You still have to pay the base tax but it saved me a few hundred in penalties. The IRS form to request this is pretty straightforward.