Has anyone used TurboTax to file back taxes? I'm in this exact situation and wondering if the regular tax software works for previous years or if I need something special.

Don't beat yourself up about this - you're definitely not alone! I work as a tax preparer and see this situation all the time, especially after the past few years with all the economic uncertainty. Here's what I always tell my clients in your situation: Yes, there will be penalties and interest, but the IRS is actually pretty reasonable when you're proactive about fixing things. The failure-to-file penalty is much worse than the failure-to-pay penalty, so getting those returns submitted should be your absolute top priority even if you can't pay everything right away. A few practical tips: Start with gathering your documents for both years. If you're missing W-2s or 1099s, you can request wage and income transcripts from the IRS website for free. Once you file, you can absolutely set up a payment plan - the IRS offers installment agreements up to 72 months for balances under $50,000, and the setup fee is pretty reasonable. Also, don't assume you owe exactly what you calculated. You might be missing deductions or credits that could reduce what you owe. I've had clients who thought they owed thousands but ended up owing much less (or sometimes even getting refunds) once we properly prepared their returns. The key is just to start the process. Every day you wait, the penalties and interest keep adding up. You've got this!

Reading through all these responses has been really eye-opening! I had no idea so many other small business owners were dealing with the exact same cash payment documentation challenges. The consensus seems clear: keep simple, consistent records of all cash payments regardless of amount, document where the cash came from (ATM withdrawals, etc.), and treat these as legitimate business expenses on Schedule C even when paying from personal accounts. I'm definitely going to implement several suggestions from this thread: 1. Start using a simple spreadsheet with date, amount, worker description, and work performed 2. Keep ATM receipts that correspond to payment dates 3. Try the contractor acknowledgment form idea for any workers I use more than once 4. Record specific amounts (like $85) rather than rounding to convenient numbers The advice about getting at least basic contact info when possible makes sense too - even just a first name and general description shows these were real workers, not made-up expenses. Thanks everyone for sharing your real-world experiences! This is exactly the kind of practical guidance that's impossible to get from IRS publications alone.

For your messy early records, definitely try to reconstruct what you can from bank statements, ATM receipts, and memory - every legitimate business expense you can document is money back in your pocket through deductions. Even if the details aren't perfect, having something is better than nothing. I'd recommend going through your bank statements and highlighting cash withdrawals that corresponded to times you hired day laborers. Then create entries in your new system like "Cash withdrawal $200 - used for day labor payments week of March 15th, approximately 3 workers for landscaping jobs." It's not as detailed as you'd want going forward, but it shows the IRS you're making a good faith effort to track legitimate expenses. The key is starting your improved system now for future payments while doing your best to capture what you can from earlier in the year. Your accountant can help you present this properly on your Schedule C - they deal with small business owners cleaning up their record-keeping all the time. Don't let imperfect past records stop you from claiming legitimate business expenses. Just be honest about the level of detail you have and implement the better system going forward.

This thread has been incredibly helpful! I'm dealing with a similar Box 18/19/20 issue and wanted to share what worked for me after trying several of the suggestions mentioned here. I ended up using a combination of approaches: first, I checked my state's Department of Revenue website to find the official locality naming format (as Kelsey suggested), then cross-referenced it with my physical work location. For my situation in Cook County, Illinois, I needed to use "COOK COUNTY" rather than just "Cook County" - the all-caps format made all the difference in getting my tax software to accept it. What really sealed the deal was calling my local tax office directly (thanks Victoria for that tip!). They confirmed that my employer should have been withholding local taxes, so Box 19 being empty was indeed an error. They also walked me through exactly what to enter in my tax software while I waited for a corrected W-2. For anyone still struggling with this: don't be afraid to make that call to your local tax office. I was dreading it, thinking I'd be on hold forever, but I actually got through in about 15 minutes and the person was super knowledgeable about these W-2 formatting issues. The key lesson I learned is that Box 18/19/20 problems are way more common than I thought, and there are definitely people out there who can help you figure it out. Don't suffer in silence with confusing tax software error messages!

This has been such an educational thread! I'm a newcomer here but have been lurking and dealing with a very similar W-2 issue. Reading through all these responses has been incredibly reassuring - I had no idea how common Box 18/19/20 problems actually are. What I found most helpful was the multiple approaches people shared: checking state Department of Revenue websites for official locality formats, calling local tax offices directly, trying different tax software if one isn't working, and considering the VITA program for free help. It's great to see a community where people share practical solutions instead of just complaining about the problem. One thing I'm taking away from this discussion is that it's really worth the effort to get a corrected W-2 if your employer made an error, especially if you're looking at owing a significant amount in local taxes that should have been withheld. The extension route seems like a smart approach if you have the time to wait for the correction. Thanks to everyone who contributed - this thread should be bookmarked for anyone dealing with W-2 local tax issues!

Don't forget about the primary residence exclusion! If this was your brother's primary residence for at least 2 of the 5 years before the sale, he might qualify to exclude up to $250,000 of gain from his income (or $500,000 if married filing jointly). Based on what you described, he lived there for about 2 years before moving out 2 years ago, so he might just barely qualify if the timing works out exactly. This could potentially eliminate any tax liability from the sale, even if he has to report it.

This is definitely a tricky situation that requires careful documentation. From what you've described, your brother needs to report the sale even though he didn't receive proceeds from the actual sale, because he was still legally on the deed. The key is treating this as a two-part transaction: (1) the original buyout he received when they split up, and (2) the formal sale that just happened. On Schedule D, he should report the sale with his cost basis being the original purchase price plus improvements, and his proceeds being only the buyout amount he received years ago (not the recent sale proceeds). You'll definitely want to include a detailed explanation with the return describing the situation. Also, try to get documentation of the original buyout agreement if possible - this will support your position if the IRS has questions. One important thing to check: make sure you understand whether he received a 1099-S form. If he did, the IRS will be expecting to see this sale reported. If the ex-girlfriend also reports part of the sale, you want to make sure there's no double-reporting of the same income.

Have you considered what might happen if you make financial plans based on receiving the full amount? The transcript shows what the IRS has approved, but have you verified what will actually reach your bank account? Many taxpayers are surprised when their deposit is smaller than expected due to this exact situation. Could you contact your state's child support enforcement agency directly to confirm the offset amount? They often have this information before it appears in any federal system and might give you a more accurate picture of what to expect.

I experienced this exact same situation two years ago and it was incredibly confusing at first! Your transcript is showing the full amount because that's what the IRS processed and approved - but here's the key thing everyone's touching on: the child support offset happens at the Treasury level, not the IRS level. What I learned is that you should definitely NOT count on receiving the full amount shown on your transcript. The Treasury Offset Program will intercept whatever you owe for back child support before the money reaches your bank account. The frustrating part is that this offset won't show up on your IRS transcript because it's handled by a completely different agency (Bureau of Fiscal Service). My advice? Contact your state's child support enforcement office directly - they can usually tell you exactly how much will be offset before you even receive your deposit. That way you can plan accordingly instead of being surprised when a smaller amount hits your account. The offset notice from Treasury typically arrives after your deposit, which doesn't help with planning!