Thank you for this tip! I didn't know about the transcript option. Would this show whether our CPA filed an extension for us? That's our biggest concern right now since the deadline has passed.

Yes, your tax transcript would show if an extension was filed on your behalf. When you access your transcript, look for a transaction code 460, which indicates an extension was filed. It should appear with the current tax year date. It will also show if a return was filed (transaction code 150) or if any payments were made. The transcript is basically a complete record of all transactions with the IRS for your tax account, so it's super helpful in situations like yours when you're in the dark about what actions were taken.

I agree with reporting to the state board, but be careful with threatening legal action. I did that with my accountant and it just made everything more complicated. I'd try the certified letter approach first before escalating.

1 Thanks for this additional info! The only gifts I gave were those three payments for my kids' down payments. I'm widowed, so no spouse to worry about for gift splitting. I definitely didn't exceed $17,000 per person - each payment was exactly $15,000 since that was the exclusion limit I remembered from a few years ago (before it increased).

22 You're all set then! The annual exclusion was $15,000 for 2018-2021, then increased to $16,000 for 2022, and $17,000 for 2023. Since your gifts were $15,000 each, you're well under the threshold even for 2022. And being widowed means you don't need to worry about the gift-splitting election. Just keep good records of these gifts for your own files - dates, amounts, and recipients. This can be helpful in case questions ever arise in the future, but you definitely don't need to file Form 709.

19 Gift tax extensions work differently than income tax extensions. Form 8892 extends the deadline to October 15th, but only if you also filed an extension for your income tax return (Form 1040). If you didn't extend your 1040, the 709 extension only goes to April 15th plus 6 months, which would also be October 15th. So either way, October 15th would be your deadline.

I hadn't thought about coworking spaces! That's a really smart alternative. Do you know if there are any specific documentation requirements for using coworking spaces as a business expense? And would that still work if I keep the hotel for personal comfort but also use a coworking space?

For coworking spaces, keep the receipts/invoices from the space and note the business activities performed there each day. Take photos of your workspace and save any digital check-ins. If you're producing deliverables while there, note that in your records. You could absolutely still keep the hotel for personal reasons while using a coworking space for business. This actually creates a much cleaner deduction situation because the coworking space has no personal use component - it's 100% business. The hotel would then be clearly personal and non-deductible, but your dedicated workspace would be fully deductible. This arrangement also makes it much harder for the IRS to question the business purpose since there's no mixing of personal and business use in the same space.

Going through an audit sounds terrifying. Did you end up owing a lot more in taxes after they disallowed your deductions?

Thanks for the tips! You know, I did receive a year-end bonus of around $2,000 that was taxed differently than my regular paychecks. Could that be part of the issue? Also, I have a high-yield savings account that earned about $800 in interest last year.

Yes, both of those things definitely contributed to your situation! Bonuses are typically withheld at a flat 22% supplemental rate, which might not be enough if you're in a higher tax bracket. And the $800 in interest income has no withholding at all, so you'll owe taxes on that amount when you file. For next year, you have two options to avoid owing: increase your regular withholding by submitting a new W-4 with additional withholding on line 4(c), or make estimated quarterly tax payments for your interest income. For someone in your situation, adding about $30-40 in additional withholding per paycheck would likely cover these extra income sources.

every time i use that irs withholding calculator thing i get different results lol. one time it said i should get an extra $50 taken out each check, then the next time it said i should get like $20 back each check. makes no sense

Thanks for this advice. I reached out to our payroll department yesterday and they're "looking into it." Did your company initially deny there was an issue? I'm getting some resistance from our HR coordinator who keeps insisting their reporting was correct.

Yes, at first they denied anything was wrong! It took about two weeks of me and other affected coworkers persistently following up before they finally investigated properly. Their initial response was "our system doesn't make mistakes" but clearly it did. Ask if anyone else in the company received similar notices - that was what finally got them to take it seriously when they realized multiple people were affected. If possible, get a copy of your "Last Pay Statement" for the tax year in question - this should show your year-to-date earnings and withholdings that should match your W-2.

What happens if you miss the 30 day deadline? My notice arrived when I was traveling for work and I just opened it yesterday. The response due date is in 5 days!