I'm in a very similar situation and have been researching this extensively! Just wanted to confirm what others have said - yes, you can absolutely both file as Head of Household from the same address. The IRS doesn't have any rule limiting HOH status by address. The key is that you each need to independently meet the three main requirements: 1. Be unmarried (or considered unmarried) at the end of the tax year ✓ 2. Pay more than half the cost of keeping up a home ✓ 3. Have a qualifying person (your children) live with you for more than half the year ✓ Since you're splitting household expenses and each claiming a different child, you should be fine. Just make sure to keep good records of how you divide expenses in case you ever need to justify your filing status. One tip: consider documenting your expense split in writing (even just a simple spreadsheet) showing who pays what percentage of rent, utilities, groceries, etc. This way if there are ever questions, you can clearly show that you each pay more than 50% of the household maintenance costs. Good luck with your filing! The HOH status will definitely save you both money compared to filing as single.

Just wanted to jump in here as someone who went through this exact situation last year! You're absolutely right to look into both filing as Head of Household - it can save you a significant amount compared to filing as single. The good news is that the IRS does allow two people at the same address to both claim HOH status, as long as you each meet the requirements independently. Since you have two children and are splitting household responsibilities, you should be fine. One thing I'd recommend is being very clear about how you're dividing expenses. Even though you contribute "equally," make sure you can each show that you're paying more than half of the household costs for yourself and your qualifying dependent. This might mean one of you pays a bit more toward rent while the other covers more utilities and groceries - just ensure the split works out mathematically. Also, keep detailed records! Bank statements, receipts, rent payments, utility bills, etc. The IRS rarely questions HOH status, but if they do, you'll want to be able to clearly demonstrate your expense split and that each child primarily lives with their respective parent. The tax savings from HOH vs. single status is definitely worth getting this right. You're smart to research it thoroughly before filing!

I'm just starting to deal with something very similar and this thread has been incredibly educational! Based on everyone's experiences, it sounds like the most common cause is indeed missing or mismatched 1099s from clients. One thing I wanted to add that might help others - when you're gathering your documentation, don't forget about any business expense receipts related to that income. Since the IRS is reducing your self-employment income to zero, they're also likely disallowing any associated business deductions you claimed on Schedule C. While proving your income is the priority, having your expense documentation ready might be important too if they question those separately. Also, for anyone using business banking accounts, those statements can be particularly valuable because they clearly separate business transactions from personal ones. If you were mixing business and personal in the same account, you might want to highlight or annotate the business-related deposits to make it easier for the IRS to follow. The 30-day response deadline is definitely real, but from what I'm reading here, this is totally manageable with good organization and documentation. Thanks to everyone who shared their experiences - it's really helping those of us just starting to navigate this process!

I'm new to dealing with IRS issues but this thread has been incredibly helpful! I'm facing a similar situation where they've reduced my self-employment income to zero, and I was honestly panicking before reading all these experiences. One thing that really stands out to me from everyone's advice is how important it is to be proactive about contacting clients regarding their 1099 filings. I work with about 6 different small businesses and I'm realizing now that I never actually confirmed whether they filed the required forms or not - I just assumed they knew what they were doing. I'm planning to start there tomorrow and then move on to gathering all my documentation using the spreadsheet method several people mentioned. The idea of matching each bank deposit to its corresponding invoice with dates and amounts seems like exactly the kind of systematic approach that would make sense to an IRS agent reviewing the case. For those who successfully resolved similar issues - approximately how much documentation did you end up submitting? I'm trying to get a sense of whether we're talking about a few pages or a thick packet of materials. I want to be thorough but also don't want to overwhelm them with unnecessary paperwork. Thanks again to everyone who shared their stories here. It's really reassuring to know this is solvable with the right approach!

I'm dealing with something similar and appreciate everyone sharing their experiences here. The stress of wondering "what if" has been eating me alive for months. After reading through all these responses, it seems like the consensus is pretty clear - coming forward voluntarily is almost always better than waiting to get caught. The penalties are lower, you avoid potential criminal charges, and you can actually sleep at night again. I'm curious though - for those who amended their returns, how did you handle the payment? Did you pay everything upfront or were you able to set up payment plans? The amount I'd owe is more than I can pay immediately, so I'm wondering what options the IRS typically offers for people in our situation. Also, has anyone here actually been audited for unreported income? I keep seeing advice about audit triggers and red flags, but would love to hear from someone who actually went through the audit process to understand what that's really like.

I've been following this thread as someone who went through a similar situation a few years back. The advice here is solid - voluntary disclosure really is your best option. One thing I want to emphasize that hasn't been mentioned much: document EVERYTHING when you prepare your amended returns. Keep records of all your income sources, bank statements, and any evidence of the cash deposits. The IRS appreciates thoroughness when you're coming forward voluntarily. Also, don't underestimate the psychological toll this takes. I was a wreck for months before I finally amended my returns. The relief you feel after taking care of it properly is incredible - it's like a huge weight lifted off your shoulders. Your situation with the capital losses potentially triggering scrutiny is definitely valid. The IRS has algorithms that flag discrepancies between reported income and financial activity. Better to address it on your terms rather than theirs. One last tip: if you do decide to work with a tax professional, make sure they specialize in IRS issues and have experience with voluntary disclosures. Not all tax preparers are equipped to handle these situations properly.

The IRS requires contemporaneous records for gambling losses - meaning you need to document them as they happen, not reconstruct them later. Bank statements, credit card records, and receipts can help support your case, but they're not sufficient by themselves. If you're serious about gambling and plan to continue, I'd recommend starting a gambling diary immediately for next year. Include date, location, type of game, people present, and amounts won/lost for each session. Many people use smartphone apps or simple spreadsheets to track this. For this year, you can only deduct what you can reasonably document. It's better to be conservative and avoid audit risk than to claim losses you can't prove. The IRS specifically looks for gambling loss deductions that equal or are close to reported winnings as potential audit flags. Consider consulting a tax professional who has experience with gambling taxes - they can help you navigate this situation properly while minimizing audit risk.

There's also an interesting historical aspect to this policy that might explain why gambling losses remain deductible despite the government's general stance on gambling. The gambling loss deduction has been part of the tax code since the 1960s, long before many states legalized casinos or online betting became widespread. Back then, most gambling was illegal except in Nevada, but people still reported winnings (as required by law) and needed a way to offset losses to avoid being taxed on money they never actually kept. The policy made sense from a pure accounting perspective - you shouldn't pay income tax on income you didn't really receive. What's interesting is that as gambling has become more mainstream and legal in most states, Congress has kept this deduction while eliminating many other hobby-related deductions. This suggests they recognize that gambling operates differently from other recreational activities because of how the winnings are taxed - every winning bet is technically taxable income, even small amounts, which creates a unique situation where you could owe taxes on money you ultimately lost. The limitation to itemized deductions also means that with today's higher standard deduction ($13,850 for single filers in 2023), many casual gamblers can't even use this deduction unless they have other significant itemizable expenses.

As a newcomer to this community and S Corp Election work, this entire discussion has been absolutely invaluable! I've been hesitant to take on these clients specifically because of all the signature rejection stories I've heard, but reading everyone's real-world experiences has completely shifted my perspective. What really stands out is how the practical reality has evolved so far beyond the official IRS guidance. The consistent success stories with electronic signatures that visually appear handwritten - whether from DocuSign's draw feature, iPad with Apple Pencil, or even careful phone signatures - demonstrates that visual authenticity is what the IRS actually cares about, not the technical creation method. I'm definitely implementing the systematic approach that keeps coming up throughout this thread: - Highlighted signature areas and detailed instruction PDFs to prevent client confusion - Cover letter template acknowledging electronic signatures proactively - Immediate verification upon receipt to catch issues before submission - Video walkthrough to eliminate common client mistakes The key insight that resonates most with me is that this isn't really about wet vs. electronic signatures - it's about having robust quality controls to prevent the typical client errors (wrong placement, typed names, inconsistent signatures across pages) that cause most rejections. For other newcomers who might be reading this and feeling intimidated by Form 2553 signature requirements - don't let that anxiety hold you back from S Corp election work. The strategies shared here absolutely work when implemented consistently, and the IRS has shown remarkable flexibility with handwritten-looking electronic signatures. Thanks to everyone who contributed their hard-earned wisdom to this discussion. This is exactly why practitioner communities are so valuable - getting real-world insights that you just can't find in official publications!

As a newcomer to this community, I have to say this entire thread has been incredibly enlightening! I've been lurking here for a while, hesitant to take on S Corp Election work specifically because of all the Form 2553 signature horror stories I keep hearing from other tax professionals. What's really struck me throughout this discussion is how much the practical reality has evolved beyond what the official IRS guidance suggests. The consistent success stories with electronic signatures that look handwritten - whether created through DocuSign's draw feature, iPad with Apple Pencil, or even carefully done finger signatures on phones - really demonstrates that visual authenticity is what matters most to the IRS now, not the technical method used. I'm planning to implement several of the systematic strategies shared here: - William's approach with highlighted signature areas and instruction PDFs - Oliver's cover letter template that proactively acknowledges electronic signatures - Lydia's brilliant video walkthrough idea to prevent client confusion - The emphasis on immediate verification before submission to catch issues early What gives me the most confidence is understanding that this isn't really about the wet vs. electronic signature debate anymore - it's about having solid quality controls to prevent those common client errors (wrong placement, typed names instead of drawn signatures, inconsistency across pages) that cause most rejections. The real-world success stories shared here, from Isabella's recent acceptance to Zainab's overseas client situation, prove these strategies work when implemented consistently. For other newcomers who might be reading this and feeling intimidated by Form 2553 requirements - don't let signature anxiety hold you back from this work. The IRS has shown remarkable flexibility with handwritten-looking electronic signatures. Thanks to everyone for sharing such practical, hard-earned wisdom. This is exactly why I value communities like this - getting real practitioner insights that you simply can't find in official publications!