IRS
CommunityGovernment Services
Can't reach IRS? Claimyr calls for you, so you don't have to wait on hold.
Claimyr is a pay-as-you-go service. We do not charge a recurring subscription.
160,000+ people connected since 2021
Using Claimyr will:
- Connect you to a human agent at the IRS
- Skip the long phone menu
- Call the correct department
- Redial until on hold
- Forward a call to your phone with reduced hold time
- Give you free callbacks if the IRS drops your call
Ask the community...
- DO post questions about your issues.
- DO answer questions and support each other.
- DO post tips & tricks to help folks.
- DO NOT post call problems here - there is a support tab at the top for that :)
How should I handle a refundable business permit deposit for tax purposes with my LLC?
Hey tax folks! I run a small photography business as a single-member LLC (disregarded entity for tax purposes) and I'm confused about how to handle something on my books. I had to pay a $500 security deposit to my state to get my sales and use tax permit. They'll refund it after 2 years if I'm in good standing with filing returns. Should I be counting this as an expense for this year? Or is it more like an asset since I'll get it back? Do I need to reverse the transaction when I eventually get the deposit back? I use QuickBooks for my accounting if that matters. Thanks for any advice! This is my first year with the business and I'm still figuring things out.
Join the conversation
Accountant filed extension without my consent - can they do that with taxes owed?
I've got a situation with my accountant that's really bothering me. They handle both my business and personal taxes. The business stuff was completed fine, but as of April 14th (just 4 days before deadline), I hadn't heard anything about my personal return. I had to email them first to ask about the status, and they replied saying they needed more information from me. The weird thing is, the information they requested was either not applicable or not actually needed for my filing. Today I finally received my tax documents and noticed not only did they miss including a dependent, but there's also a penalty/interest fee added. I owe around $9,500 so I'm guessing the fee is interest on that amount. After doing some research, I've read that tax preparers can't file extensions without taxpayer consent if money is owed. Is this correct? Can I hold my accountant responsible for filing an extension without contacting me until the last minute (and only after I reached out first)? If they're at fault, is there any way to get the penalty/interest fee removed or avoid paying it? Update: Sounds like filing the extension was actually the right move. I do wish their communication had been better, which might have prevented needing the extension altogether, but at least I'm avoiding more serious late penalties.
Join the conversation
I'm a little late to this, but there's an important distinction no one has mentioned yet. There are actually two different penalties that could be at play here: 1. Failure-to-file penalty: 5% of unpaid taxes each month (max 25%) 2. Failure-to-pay penalty: 0.5% of unpaid taxes each month (max 25%) The extension prevented the big failure-to-file penalty, but you're still on the hook for the failure-to-pay penalty since the money was due April 18th. Plus interest, which compounds daily. Your accountant should have estimated what you owed and advised you to make a payment by the deadline even if the return wasn't ready. That's where they dropped the ball.
Thanks for breaking that down! So basically, even though the extension was filed, I should have made an estimated payment by April 18th to avoid the failure-to-pay penalty? Is there any recourse now, or am I just stuck with these fees?
Exactly right. The extension only gives more time for paperwork, not payment. For future reference, always make your best estimate payment by the deadline even if your return isn't ready. As for recourse now, your best option is to request a First Time Penalty Abatement if you've had a clean tax record for the past 3 years. You can call the IRS directly or use the number on your bill to request this. The interest typically can't be removed, but the failure-to-pay penalty often can be if it's your first infraction. Just explain the situation with your accountant's poor communication, and they're usually pretty reasonable.
Am I the only one stuck on the fact that the accountant added the wrong dependent information? That seems like a bigger issue than the extension! You should double-check everything else on the return because that's a pretty significant error. What tax software does your accountant use? Some of the professional ones are better than others at catching errors.
Not all tax software is created equal. I've used ProSeries and Lacerte professionally, and they have very different error checking capabilities. But honestly, good accountants should be manually reviewing returns anyway, not just relying on software to catch mistakes.
Should I amend my 2021 tax return? Confused about 1099-R and Form 8606 for backdoor Roth IRA
So I'm in a bit of a tax mess and could use some guidance. Here's what happened: My husband and I found out we were over the income limit for Roth IRA contributions in 2021, but we had already maxed out our contributions before realizing this. I did the whole recharacterization thing from Roth to Traditional IRA and then converted back to Roth to do the backdoor Roth IRA during 2021. My husband didn't complete his recharacterization and conversion until January 2022. We used a CPA for our 2021 taxes, and they included two Form 8606s (one for each of us) in our return. I had received a 1099-R from Vanguard showing my conversion, but my husband hadn't gotten one since his conversion happened in 2022. For our 2022 taxes, we ditched the CPA (they filed our 2021 return late and were a pain to work with) and tried to do it ourselves using TurboTax and FreeTaxUSA. We ended up filing with FreeTaxUSA. Here's where I'm confused - when working on our 2022 taxes, I think either TurboTax or FreeTaxUSA gave me a message saying we might need to amend our 2021 return because of my husband's late recharacterization/conversion. The message said something like: "If your conversion includes contributions made in 2022 for 2021, you'll need to check your 2021 return to make sure it includes Form 8606. If this form isn't included, you'll need to fill out a 2021 8606 to record your nondeductible basis for conversion and mail it to the IRS. Don't amend your 2021 return to record your basis. Note: If you're required to file Form 8606 for a nondeductible contribution to a traditional IRA but don't, you'll face a $50 penalty. This can be waived with reasonable cause." But I'm not sure if this applies to us since my husband's contributions were made in 2021, even though the recharacterization and conversion happened in 2022. Do I need to file an amended 2021 return? How would I even know if I'm doing it correctly? Wouldn't the IRS have notified me if something was wrong when I filed 2022 taxes? Shouldn't the CPA have caught any issues when they filed our 2021 return? Really appreciate any help on this!
Join the conversation
I'm confused about something else in the original post. If both you and your husband were over the income limit for Roth IRA contributions in 2021, why did you contribute directly to Roth IRAs in the first place? Wouldn't it have been simpler to just contribute to traditional IRAs and then convert? Was this intentional or did you realize you were over the limit after making the contributions?
Many people don't know exactly what their annual income will be until late in the year, especially if they get bonuses or have variable income. It's pretty common for people to contribute to Roth IRAs throughout the year and then discover at year-end that they've exceeded the income limits, requiring a recharacterization.
Exactly what the other commenter said - we contribute monthly to our IRAs throughout the year, and we didn't realize until December that a bonus and some unexpected consulting income had pushed us over the limit. By then we had already made full contributions to our Roth IRAs for the year. Honestly, we'd never had to do a backdoor Roth before, so the whole process was new to us. Next time we'll just contribute to Traditional and convert right away since our income will likely be over the limit again.
Got a Paypal 1099-K but I've never had a Paypal account - possible identity theft?
I'm really freaking out right now because I just received a Paypal 1099-K in the mail but I've literally never created a Paypal account in my life. The form shows I supposedly made around $15k in August from like 35 different transactions. I only use Venmo and Cash App to send money to friends/family occasionally. I called the number printed on the form and it does match Paypal's official customer service, so the document itself seems legitimate. I'm seriously worried someone has stolen my identity and is running some kind of business or scam using my personal information. Has anyone dealt with this before? What steps should I take now? Should I contact the IRS? File a police report? I'm completely lost on how to handle this potential identity theft situation and worried about getting stuck with a tax bill for income I never received.
Join the conversation
Make sure you also check your Social Security statement to see if someone is reporting wages under your SSN! I had a similar 1099-K issue that turned out to be part of a larger identity theft. The thieves had also gotten jobs using my SSN. You can check this online by creating an account at ssa.gov. If you see any earnings you don't recognize, report it immediately!
How far back should you check your SSA records? Just the current year or should you go back several years to be safe?
You should definitely check at least the past three years. Identity thieves sometimes start small to see if you notice before ramping up their activity. In my case, they had actually used my information for almost two years before I caught it. Also, while you're on the SSA website, set up account notifications so you'll be alerted to any future changes or activity. This way you'll know immediately if someone tries to use your SSN for employment again.
Has anyone dealt with getting a 1099-K from PayPal where some of the transactions were legitimate but the total amount was way off? My situation is slightly different - I do have a PayPal account, but my 1099-K shows about $9k more than I actually received last year.
This happened to me! In my case, PayPal had counted some transactions twice. Also, they were counting the full amount of money that moved through my account, including stuff that wasn't income (like when friends reimbursed me for group purchases). You need to contact PayPal tax department specifically, not just regular customer service, and request a corrected form.
How can I file my 2022 W-2s online for free as a first-time filer?
So I finally got my W-2s from 2022 in the mail yesterday (yeah I know, super late) and I'm completely lost about what to do next. This is basically my first time really handling my own taxes - my parents used to deal with all this stuff for me. The problem is I'm currently between jobs and literally have zero income right now, so paying someone to file them or even buying tax software is not an option for me. I've heard there are free ways to file online but have no clue where to start or which ones are actually legitimate vs scams. Would really appreciate some guidance from people who've been there before! I just need to get these W-2s filed without spending money I don't have.
Join the conversation
If you don't want to deal with the stress of figuring out the right software, you can also check your local library! Many libraries partner with VITA (Volunteer Income Tax Assistance) and offer totally free tax prep help for simple returns. They can help with prior year returns too. My sister used them last year for her 2021 and 2022 taxes and said they were super helpful.
Do you know if VITA can handle returns from 2022? And would they help even now since it's not tax season? I'd definitely prefer having someone knowledgeable walk me through it step by step.
VITA can definitely handle 2022 returns. While many VITA sites operate primarily during the regular tax season (January through April), some locations offer year-round assistance specifically for prior year returns. Your best bet is to call your local library or search for "VITA tax sites" in your area to check availability. Even outside regular tax season, many VITA volunteers are willing to help with prior year returns because they understand situations like yours are common. Just be sure to bring all your documents (W-2s, identification, social security card) when you go. The service is completely free for basic returns, and they're specifically trained to help people who are filing for the first time or have simple tax situations.
Has anyone tried Credit Karma Tax for back filing? I heard they got bought by Cash App but still offer free filing??
Cash App Taxes (formerly Credit Karma Tax) is completely free for federal and state returns, but there's a catch for prior year returns. They typically only support the current tax year and maybe the year before. For 2022 returns in 2025, you'll probably need to use one of the IRS Free File options instead.
Aisha Abdullah
From a bookkeeping perspective, here's how I would record this in QuickBooks: 1. Create an Other Current Asset account called "Refundable Deposits" 2. Record the payment to this asset account (not to an expense) 3. When you get the money back, record the deposit against this same account This way your books will show that you have this asset, and your taxes won't show an expense that isn't really an expense. The key is that it doesn't impact your profit and loss statement at all - it's strictly a balance sheet item.
0 coins
ShadowHunter
AuthorThanks for breaking it down like this! This makes a lot of sense. Do I need to do anything special at tax time to report this deposit? Does it show up anywhere on Schedule C?
0 coins
Aisha Abdullah
You don't need to do anything special with this deposit on your tax return. It won't appear on your Schedule C at all since it's not an income or expense item. Schedule C only reports items that affect profit or loss. This deposit will only be reflected on your balance sheet as an asset. Since the IRS doesn't require sole proprietors or single-member LLCs to file balance sheets with their tax returns, you won't need to report it anywhere on your tax forms. Just keep good records in your accounting system so you remember to properly handle it when it gets refunded.
0 coins
Ethan Davis
Just a quick note that if your state doesn't end up refunding the deposit (like if you mess up your sales tax filings or something), then it WOULD become an expense at that point. My brother had this happen with his construction business - they kept his $750 deposit because he filed late twice, and his accountant said to record it as a business expense in the year they officially told him it was forfeited.
0 coins
Yuki Tanaka
Yeah, and make sure you get documentation if they don't refund it! My state tried to claim I never paid a deposit in the first place when it came time for my refund. Thankfully I had kept the original receipt and was able to get it back, but it was a hassle.
0 coins