What kind of documentation should I keep? I have confirmation emails from my brokerage showing the contributions, and I have last year's tax returns. Is that enough?

Confirmation emails are a good start, but you really want your account statements showing the contributions. Keep your Form 5498s that show IRA contributions for each year - these are usually sent out in May for the previous tax year. Your tax returns are crucial too, especially if you filed Form 8606 with them. If you didn't file 8606 forms for those non-deductible contributions, you should file amended returns to include them. Without the 8606 forms establishing your basis, it becomes much harder to prove which portions were already taxed.

I used TurboTax last year for my backdoor Roth and it worked fine. The interview questions specifically asked about non-deductible contributions and IRA conversions. Just make sure you answer the questions about having a basis in your IRAs correctly. The one tricky part was making sure I entered the 1099-R information exactly as it appeared on the form.

What kind of documentation would be best? I have credit card statements showing the purchases, but I didn't keep all the receipts. Will bank and credit card statements be enough, or does the IRS require more detailed proof?

Credit card and bank statements are a good start, but they only show that you spent money, not necessarily what it was for. The more detail you can provide, the better. If you don't have all receipts, include what you do have, along with a written explanation of each expense category and how it related to earning the 1099 income. Any contracts, emails with clients, or other documentation that shows the nature of your business activities will help support your case. The IRS is more likely to accept your expenses if you can clearly demonstrate they were ordinary and necessary for your business.

This is good advice. I went through something similar and was able to get the penalties removed by showing I had given all my documents to my preparer. The IRS form 843 can be used to request penalty abatement after you've resolved the CP2000 issue.

Thanks for the insider perspective! Quick question - since I already paid and they filed my return, is there any way to still get an advance elsewhere or am I stuck waiting for the normal refund now? My emergency isn't going to wait 3 weeks unfortunately.

Unfortunately, once your return is filed, you can't get an advance from another company. The advance loans are tied to the preparation process, and you can only file once. Your best option now is to track your refund closely using the IRS "Where's My Refund" tool and consider other short-term options for your emergency. If you filed electronically with direct deposit, many refunds are coming through faster than the 21-day estimate this year - I've seen some clients get theirs in 10-14 days. Much better than payday loans or credit card advances, which have even worse terms than refund advances.

The IRS is running about on schedule this year for most simple returns, but there are definitely delays for returns with certain credits like EITC or Additional Child Tax Credit. Those are automatically held until mid-February by law. Returns with inconsistencies, verification flags, or identity theft markers also get delayed for manual review. If you're hitting the 21-day mark with no updates, it might be worth contacting the IRS directly to see if there's an issue they're not showing on the tracker.

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 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.