Wouldn't this system potentially hurt consumers though? If retailers have to implement complex new compliance systems, those costs will just get passed along to buyers. Plus, I imagine the definition of "production state" could get messy - what if components come from multiple states?

That's a legitimate concern about costs, but the proposal actually addresses this by building on existing systems rather than creating entirely new ones. Many retailers already use automated systems for multi-state sales tax compliance post-Wayfair. Extending these to include origin data isn't as big a leap as starting from scratch. Regarding the multi-state production issue, you're right that it complicates things. A workable approach might be to use the final assembly location or implement a proportional system based on value-add at each production stage. The automobile industry already tracks this kind of data for regulatory compliance, so there are existing models to follow.

This is exactly why I moved all my sales to Amazon last year. The compliance burden post-Wayfair was just too much for my small operation. I was spending more time on tax research than actually running my business. The irony is that marketplace facilitator laws were supposed to level the playing field, but they've pushed more of us smaller sellers onto the big platforms. If this hybrid system gets implemented, I bet even more sellers will decide it's not worth the hassle of compliance.

Oh that's a huge relief! I was stressing about trying to track down decades-old purchase records. So I just need to document what the value was on the date he passed away? That's much easier since it was only last year and I can look up the historical prices online. Do I need any special documentation to prove that value in case of an audit? Or is just having the date of death and the corresponding stock values enough?

Yes, just document the closing price on the date of death. For additional protection, I suggest taking screenshots or printing the historical price information from a reputable financial website and keeping that with your tax records. If the estate was large enough to file an estate tax return (Form 706), that document would also have the valuation information and would be excellent documentation. But for most people, good records of the date of death values from reliable sources are sufficient for audit protection.

The IRS generally keeps transcripts available for the current tax year and the prior three years through their online system. But they actually maintain records for much longer - typically 7-10 years. For 2016 records, you'll probably need to complete Form 4506-T and mail or fax it to request older transcripts. Or call them directly. There's usually no fee for transcripts (unlike actual tax return copies which cost $50 each).

Isn't there something called "innocent spouse relief" that protects you in situations like that? I thought the IRS had procedures for when one spouse didn't know about the other's tax shenanigans?

Yes, there is innocent spouse relief, but it can be extremely difficult to qualify for and prove. You have to demonstrate that you had no reason to know about the underreporting or false deductions, which is a high bar to clear especially for married couples who live together. The process is lengthy and stressful, often requiring professional help. In my experience, it's much easier to just file separately from the start if you have ANY concerns about your spouse's tax situation. Prevention is better than trying to fix things after the fact with the IRS.

Wow this is really good to know! I'm on IBR for my loans and didn't even think about how filing status would affect that. Does this work for all income-based repayment plans?

I honestly hadn't considered identity theft! I did trade on the platform, but definitely not enough to generate $29,800 in proceeds. Is there a way to check if someone else accessed my account? I'm going to download my credit reports right now just to be safe.

Most trading platforms have login histories you can request that show IP addresses, devices, and timestamps of account access. Contact WealthSurge's security team specifically and ask for this information - explain your situation and they should provide it. Also, when you get your trading records, look carefully for any transactions you don't recognize or that happened after you thought you stopped using the platform. If you do find evidence of unauthorized access, file a police report immediately - you'll need it to dispute the tax bill on grounds of identity theft.

What's the best way to respond? Should you call or send a letter? And does it have to be certified mail or anything specific?

I checked with HR specifically about the filing status and they confirmed it shows HOH in the system. But the tax exempt thing is interesting - I hadn't thought of that! I'll definitely ask if something got checked wrong during the transition. Thanks for the Form 843 tip. I'm definitely keeping copies of all my emails with HR and the responses from the payroll companies as documentation. Did you need any specific documentation from your employer when you filed that form?

For the Form 843, I included copies of my W-4 showing the correct information, emails with HR where they acknowledged the error, and a short statement explaining the situation. The key is proving it was the employer's error, not yours. The most helpful document was a letter from my HR department acknowledging the mistake in their system. If your employer is cooperative, ask for something similar - a simple statement confirming there was a system error in the payroll transition that affected your withholding despite your W-4 being filled out correctly. That carries a lot of weight with the IRS.

The Earned Income Credit suggestion is good, but be careful - at $59k for HOH, you're probably over the income limit unless your dependent is qualifying for the child tax credit. For 2024 taxes (filing in 2025), the EITC income limit for HOH with one qualifying child is around $53k.

Thank you! I hadn't thought about making estimated payments directly - that's a great idea to handle this myself rather than relying on the employer fix. I'm going to check out the IRS calculator today to see exactly where I stand. And yeah, I'm probably just over the limit for EITC based on what the other commenter said, but I should still get the child tax credit which will help. My daughter is 12 so she definitely qualifies.