That makes me feel a bit better actually. I was worried something was wrong specifically with my return. Do you think I should still try calling them or just wait it out at this point?

If you're at the 21-day mark, it's definitely worth checking in. The IRS won't really give you much info before that timeframe since they consider it normal processing. Once you're past 21 days, they can actually look into what might be causing the delay. I'd recommend either using the "Where's My Refund" tool daily or trying to get through to a representative to make sure nothing's actively wrong with your return. Sometimes there are simple verification issues they can resolve quickly once you're in contact with them.

Yeah I did claim the Child Tax Credit for my two kids. And I think you're right about the amount—it's definitely the largest refund I've ever had. Guess that could be triggering extra scrutiny.

Those are definitely two factors that can extend processing times. The IRS is particularly careful with refunds that include tax credits for children because there's been fraud in that area. And yes, larger refunds generally receive more scrutiny. I'd recommend waiting until you hit the full 21 business days (not calendar days) before getting too concerned. If you e-filed on February 10, that would put you around March 12 for the 21 business day mark. If you still don't have an update by then, that's when I'd try contacting the IRS directly.

Thanks for that tip! Do you know if using the FTA for an estimated tax penalty would prevent me from using it for other types of penalties in the future? Like if I somehow ended up with a late filing penalty next year?

Good question. The FTA policy is actually applied separately to different types of penalties. So using your FTA for an estimated tax penalty wouldn't prevent you from qualifying for an FTA on a late filing or late payment penalty in the future. The IRS treats each penalty type as its own category for FTA purposes. But you should still aim to avoid penalties altogether since FTAs aren't guaranteed and depend on your compliance history.

Isn't the Practitioner Priority Line only for tax professionals with CAF numbers? I don't think regular taxpayers can use that line - we're stuck with the normal IRS customer service line.

22 Is there a time limit for recharacterization though? I thought you had to do that by the tax filing deadline for the year of the contribution.

11 You're absolutely right about the time limit, and that's an important clarification. Recharacterization generally must be done by the tax filing deadline (including extensions) for the year of the contribution. Since the OP mentioned this was from "several years ago," recharacterization is unfortunately no longer an option. For anyone else reading this who recently made an excess contribution, recharacterization is a great option, but it has to be done quickly. For the OP, removal of the excess contribution (plus earnings) is likely the only remaining option to stop the ongoing 6% penalty.

1 Thanks for sharing your experience! Did you need to provide any specific documentation to your brokerage to prove the contribution was excess? Or did they just take your word for it and process the request?

6 They didn't require any documentation at all. I just had to tell them which contribution I wanted treated as excess (in my case it was the whole annual contribution). They have all the records of your contributions already in their system. They did warn me that the calculation of earnings might result in different numbers than I expected, especially if the market had gone up or down significantly since the contribution. In my case, the earnings portion was actually negative because the market had dropped after my contribution, which was actually better for tax purposes since I didn't have to pay tax on earnings that didn't exist.

Thanks for pointing that out! I've been careful to stay under the limits each year. I contribute just under half the max and my employer matches it, so together we don't exceed the annual limit. My main concern was just the reporting discrepancy and potential audit issues. I think I'm going to contact my former employer and request corrected W2s for the last couple years, but probably won't bother amending my tax returns since it sounds like my tax liability wasn't affected.

You're doing it exactly right then! Just to give you extra peace of mind - the IRS is mostly concerned about people exceeding contribution limits or claiming deductions they shouldn't. Since your situation doesn't involve either of those issues, it's very low risk. When you contact your former employer, be specific about the Box 12W coding requirements. Some payroll departments genuinely don't understand that both employer and employee contributions need to be included. If they give you any pushback, reference IRS Publication 969 which clearly states the reporting requirements.

Wouldn't this create a mismatch between your W2 and your tax return though? Seems like that would trigger an audit flag.

Thanks for pointing that out. I held most of these coins for over a year, but some of the DeFi stuff was shorter term. Do I need to separate those out specifically on different forms, or just calculate different rates?

You'll report them separately on your Schedule D and Form 8949. You'll use different sections of Form 8949 - Part I for short-term transactions and Part II for long-term. Each transaction gets reported individually with its purchase date, sale date, proceeds, and cost basis. This is where good record keeping becomes really important, as you need to know the specific purchase and sale dates for each position. If you're using tax software, it will guide you through this process and calculate the appropriate tax for each category.

Using $0 cost basis is the nuclear option though - definitely a last resort! I'd exhaust every possible method to reconstruct your basis before going that route. Bank statements, credit card statements, emails from exchanges confirming purchases - anything can help establish at least some basis.