I'm actually a bit confused by some of the responses here. My accountant had me file a Form 1041 for my revocable trust with an EIN, but checked the box that it was a grantor trust and attached a grantor trust statement. He said this was required whenever a trust has its own EIN, even if it's revocable. Am I getting bad advice? I'm paying for an extra tax return each year that others here are saying isn't necessary.

This is such a helpful thread! I'm in a similar boat with a revocable trust and EIN, and it's reassuring to see that I don't need to file a separate 1041. One thing I wanted to add for anyone else reading this - make sure to notify your financial institutions that your trust is a grantor trust for tax reporting purposes. I had to send letters to my bank and brokerage firm with my trust's EIN requesting that they issue all 1099s under my personal SSN instead. Most institutions have procedures for this, but you need to be proactive about it. If you don't do this and end up with 1099s under the trust's EIN, you'll need to include explanatory statements with your personal tax return like others mentioned. It's much cleaner to get the 1099s issued correctly from the start. The IRS has specific guidance on this in Publication 559 if anyone wants the official details. @Owen Jenkins - definitely get ahead of this for next year's tax season if you haven't already contacted your financial institutions!

This thread has been incredibly helpful! I'm in a similar situation with my small catering business - we do a lot of destination weddings and events where staff need to stay overnight or for multiple days. One thing I'm still confused about after reading all these responses: if we book hotel rooms for employees during multi-day events, does that count as taxable housing benefits, or would it fall under business travel expenses? We typically cover lodging when events are more than 50 miles from their home base. Also, has anyone dealt with the situation where some employees live locally and don't need housing, while others are traveling staff who do? I'm worried about creating perceived inequities in compensation packages if some employees get housing benefits and others don't, even though the local employees don't need them. The insurance point that was just raised is making me nervous too - I hadn't considered that our business liability might not cover issues at employee lodging. Definitely need to call our insurance agent this week! Really appreciate everyone sharing their real experiences here. The IRS publications make this seem straightforward, but clearly there are a lot of practical considerations they don't cover.

One additional consideration that might be relevant for your beachside resort - make sure to check if your local area has any rent control or tenant protection laws that could apply to employer-provided housing. Even though you're providing housing as an employment benefit, some jurisdictions treat employer housing arrangements similarly to landlord-tenant relationships. This became an issue for a restaurant group I know that provided seasonal housing - when they needed to terminate an employee, they discovered they couldn't immediately reclaim the housing due to local tenant protection laws that required formal eviction proceedings. It created a nightmare situation where they had a terminated employee still occupying company housing for weeks. To avoid this, consider having employees sign occupancy agreements that clearly state the housing is tied to employment status and terminates with employment. Some areas have specific exemptions for bona fide employer housing, but you'll want to verify this with local housing authorities. Also, since you mentioned being in a "super competitive area for workers," you might want to explore if there are any local workforce development grants or incentives available for businesses that provide employee housing. Many tourist-dependent communities have recognized that worker housing is critical infrastructure and offer support programs. The seasonal nature of your business actually works in your favor for many of these programs since you're helping address exactly the kind of workforce housing shortage that these initiatives are designed to solve.

This whole thread has been incredibly eye-opening! I've been keeping everything for 7 years too, just like Omar, because that's what I was always told. But after reading everyone's experiences, I think the key takeaway is that it really depends on your specific tax situation. What I'm planning to do now is take the hybrid approach that several people mentioned - keep basic returns (standard deduction, simple itemized deductions) for 3 years, but hold onto anything with business income, significant investment activity, or unusual deductions for the full 7 years. I'm also definitely investing in a good crosscut shredder before I start this project. The security concerns people raised about identity theft are real, and it sounds like the cheap shredders just aren't worth the frustration when you're dealing with volume. One question for those who've gone digital - do you still keep paper copies of the actual tax returns themselves, or do you scan everything and go completely paperless? I'm torn between wanting to free up the physical space and being nervous about relying entirely on digital copies for something so important.

This has been such a valuable discussion! As someone who works with taxpayers daily, I want to emphasize a few key points that have come up: The 3-year rule is indeed the standard, but the exceptions mentioned here are crucial. I see too many people get caught off guard when they need documentation for amended returns, business expenses, or investment basis calculations years later. One thing I'd add - if you're married and file jointly, make sure both spouses are on the same page about document retention. I've seen situations where one spouse cleaned out files without realizing the other had claimed business expenses or investment losses that required longer retention periods. For those going digital, consider the "3-2-1 backup rule": 3 copies of important data, on 2 different types of media, with 1 stored offsite. Tax documents are too important to lose to a hard drive crash or house fire. And please, please shred everything properly! I've helped taxpayers deal with identity theft from improperly disposed tax documents. It's a nightmare that's completely preventable with a good crosscut shredder. The hybrid approach many of you mentioned is exactly what I recommend to clients - keep it simple for basic returns (3 years) but err on the side of caution for anything complex (7 years). Better to store a few extra boxes than to scramble for missing documentation during an audit.

FYI, one option nobody mentioned - if your new employer offers an FSA with the PPO plan, you could potentially use that instead of trying to navigate the HSA excess contribution rules. You'd still need to deal with the current excess, but going forward you could contribute to the FSA for your expected baby expenses!

One thing to keep in mind is the timing of when you actually need to resolve the excess contribution. You have until your tax filing deadline (including extensions) to withdraw the excess amount and any associated earnings. So if you file by April 15th, you have until then to make the correction. However, if you're planning to use the funds for medical expenses related to your baby, make sure those expenses are truly "qualified medical expenses" under HSA rules. Prenatal care, delivery costs, and most baby-related medical expenses qualify, but things like baby formula, diapers, or over-the-counter medications (unless prescribed) generally don't. Also, keep detailed records of all your medical expenses and HSA distributions. The IRS can request documentation to verify that HSA funds were used for qualified expenses, especially in situations involving excess contributions. Having organized records will make tax filing much smoother and protect you if there are any questions later.

Yes, you can absolutely use TurboTax or TaxAct to file your 2020 and 2021 returns! I was in a similar situation last year with unfiled returns from 2019 and 2020. Here are the key things I learned: 1. You'll need to purchase the desktop software for each specific tax year - don't use the current year's software for prior years 2. Since you're owed federal refunds, there are no penalties from the IRS for filing late (they don't penalize you for being slow to collect money they owe you) 3. Your state penalties will vary, but most charge around 5% per month for failure to file plus interest The process is pretty straightforward once you get started. I'd recommend gathering all your documents first (W-2s, 1099s, receipts, etc.) for both years before you begin. You can file both years simultaneously - no need to wait for 2020 to process before submitting 2021. One tip: consider e-filing if the software allows it for those years, as it processes much faster than paper filing. Good luck getting this sorted out - it's not as overwhelming as it seems once you dive in!

Just wanted to share my experience as someone who went through this exact situation! I had unfiled returns for 2019, 2020, and 2021 due to a combination of job loss and family health issues. Here's what worked for me: 1. **TaxAct was cheaper than TurboTax** for multiple prior years - saved me about $60 total compared to TurboTax's pricing for older versions. 2. **Gather everything first** - I spent a weekend collecting all my tax documents before starting anything. Having everything organized made the process so much smoother. 3. **State amnesty programs are real** - My state (Michigan) had a voluntary disclosure program that cut my penalties in half. Definitely worth checking if your state offers something similar. 4. **E-file worked for both 2020 and 2021** - Got my federal refunds in about 3 weeks each, which was way faster than I expected for late returns. The whole thing took me about 2 weeks from start to finish, and honestly, the anticipation and dread was worse than actually doing it. You've got this! The software walks you through everything step by step, and since you're getting federal refunds, the IRS will be happy to send you your money once you file. One last tip: If you have any self-employment income or complicated deductions, consider getting a tax pro to review everything before you submit. Sometimes the extra cost is worth the peace of mind.