I went through this last year! You don't need to send a 1095 form if you didn't have insurance - that's the whole point. The IRS is just asking for verification because their system flagged your return when you indicated no coverage. Call them and explain your situation - that you couldn't afford coverage. For 2025 filing (2024 tax year), the individual mandate penalty isn't even enforced anymore at the federal level, though some states still have their own requirements.

Has anyone actually paid a penalty for no health insurance recently? I haven't had insurance for 3 years and never got any letters or penalties. I'm wondering if they're just randomly auditing some people?

Not sure if this helps, but I had a similar situation with my daughter at UCLA. Our tax advisor explained it this way: If you never received a bill, there was no expense. If there was no expense, there was no support provided for that expense. For the kiddie tax, they look at actual support provided, not theoretical costs that were waived. In our case, we were able to exclude the tuition waiver from the support calculation, which meant her part-time job provided more than 50% of her support. This only works with true tuition waivers though - not scholarships where money actually changes hands. Worth asking your accountant about this specific distinction.

One thing to consider that I haven't seen mentioned - look at how your university reported the tuition waiver on your 1098-T. Check Box 5 which shows "Scholarships or Grants." If they included the waiver amount there, the IRS might consider it support regardless of whether cash changed hands. I found this out the hard way. My daughter had a "presidential tuition waiver" but the university reported it in Box 5 of her 1098-T as a scholarship. When we got audited (bad luck!), the IRS considered it as support provided by the university, which meant her earned income wasn't over 50% of her support.

One thing to double check is if you're eligible for the American Opportunity Credit (AOC) vs the Lifetime Learning Credit (LLC). The AOC is generally better but can only be claimed for 4 years, while the LLC can be claimed for unlimited years. AOC gives you up to $2,500 per eligible student (100% of first $2,000 in expenses, 25% of next $2,000), while LLC only gives 20% of up to $10,000 in expenses (max $2,000). Also, make sure you're considering books and required course materials - those can count as qualified expenses even if not paid directly to the school! Those wouldn't show up on your 1098-T but you can still claim them if you have receipts.

Have you checked if your qualified education expenses already got factored into your tax calculation? Sometimes it's not showing up as a separate item but is still reducing your overall tax liability. Also, double check box 7 on your 1098-T. If box 7 is checked, it means the amounts in Box 1 include amounts billed for the first three months of 2025 (next year's academic term). Those amounts wouldn't count for this year's taxes.

Virginia resident here! Just wanted to add that updating your name with Virginia DMV and tax department can be done separately from your federal tax filing. You'll need to update your name with Social Security first, then DMV, then everything else. For Virginia state taxes, you'll file under whatever name is on your federal return for consistency. The Virginia tax department actually recommends filing under your old name if that's what your W-2 and Social Security records still show, even if you have a court order.

Honestly the worst part of changing your name is updating EVERYTHING. I changed mine last year and taxes were the least of my worries lol. Had to update my bank, credit cards, mortgage, car title, insurance, utilities, email addresses, subscriptions, professional licenses... the list goes on forever 😩 The key with taxes is definitely making sure your W-2 name matches your Social Security card name. Otherwise it'll get flagged in the system.

The one thing nobody has mentioned yet is to check that whoever you hire has experience with YOUR SPECIFIC type of audit. There are different kinds: - Correspondence audit (mail only) - Office audit (you go to IRS office) - Field audit (they come to you - the most serious) My brother hired an expensive tax attorney for what turned out to be a simple correspondence audit that an EA could have handled for half the price. Meanwhile, I had a field audit for my construction business and definitely needed the attorney because they found some serious issues. Also ask about their audit success rate! A good representative should be able to tell you what percentage of their audit cases result in reduced or no additional tax owed.

One approach nobody's mentioned - I used a COMBINATION when I was audited last year. I started with an EA who handled most of the basic documentation and preparation, then brought in a tax attorney specifically for negotiating the final settlement when it looked like penalties might be applied. The EA charged $200/hr and handled about 80% of the work. The attorney was $450/hr but only needed for about 5 hours total. This "tiered approach" saved me money while still getting specialized help when needed. For what it's worth, in my experience: - EAs know the tax code extremely well and are great for most audit situations - CPAs are best when there are complex accounting issues beyond just tax - Tax attorneys are essential if there's any hint of penalties, fraud accusations, or if you need attorney-client privilege protection Don't be afraid to ask any professional if your situation might benefit from a combined approach!