I'd definitely recommend filing the amended return sooner rather than later. The IRS automated matching system will catch this - they receive copies of all W-2s and 1099s electronically, so there's really no chance it will "fly under the radar." The key thing is that if you amend before they send you a notice, you'll avoid the accuracy-related penalty (which is typically 20% of the additional tax). You'll still owe interest from the original due date, but that's much better than dealing with penalties on top of it. Form 1040-X isn't too complicated - you'll show the original amounts, the corrected amounts, and the differences. Make sure to attach the missing W-2 and include a brief explanation of what happened. The IRS is generally understanding about honest mistakes like this. From a practical standpoint, with $1,200 in additional income, you're probably looking at owing somewhere between $150-300 in additional federal tax (depending on your tax bracket), plus a small amount of interest. Much better to handle it proactively than wait for them to catch it and send you a CP2000 notice.

I'm dealing with almost the exact same situation! I missed a W-2 from a part-time job I had for just a few weeks last year. The amount is similar to yours - about $1,100 in income with around $140 withheld. After reading through all these responses, I think the consensus is pretty clear: file the amended return now rather than waiting. Even though it's a small amount, the IRS's automated matching system will definitely catch it eventually, and it's better to be proactive. I just looked up Form 1040-X on the IRS website and it doesn't seem too intimidating. You basically fill out three columns showing what you originally reported, what it should have been, and the difference. The hardest part for me will be calculating exactly how much additional tax I owe, but I figure it's worth doing it right the first time. Thanks everyone for sharing your experiences - it's really helpful to know I'm not the only one who's been in this situation!

I don't understand why TreasuryDirect makes this so confusing! I've had an I-bond sitting in my gift box for almost 2 years because I was afraid of messing up the taxes. Has anyone actually gone through an audit where this came up? I'm worried about doing it wrong and getting in trouble.

I went through this exact same situation with my son's I-Bond last year. The key thing to remember is that as long as the bond is sitting in your TreasuryDirect gift box, you're still the legal owner for tax purposes. The "gift" designation is just for tracking - it doesn't actually become a completed gift until you deliver it to her account. Since you mentioned you're planning to complete the transfer soon, here's what I'd recommend: if you've been using the deferral method (not reporting interest annually), just transfer it now and all the accumulated interest responsibility will transfer to your daughter when she eventually redeems it. Make sure to keep a record of the transfer date for your records. The good news is that since I-Bond interest is exempt from state taxes in California anyway, you don't have to worry about any state-specific complications. Just focus on the federal treatment, and you'll be fine.

Definitely don't ignore that 1099-B! Even though $1,200 might not seem like a lot, the IRS will eventually send you a CP2000 notice if you don't report it properly. I learned this the hard way with a small 1099-B I thought wasn't worth dealing with - ended up owing penalties and interest on top of the original tax. When you call MetLife tomorrow, have the 1099-B in front of you and ask them specifically what type of account or transaction this relates to. They should be able to tell you if it was from employer stock, a life insurance policy with investment features, or some other benefit program. Also ask if they have the cost basis information - if it's not on the form, you'll need to get that from them to calculate your actual gain or loss. The good news is that once you know what it is, reporting it on Schedule D isn't too complicated. Most tax software will walk you through entering the 1099-B information step by step.

Just wanted to add that if you're dealing with employer stock transactions through MetLife, there might be some specific tax implications depending on how the stock was originally granted to you. If these were incentive stock options (ISOs), the tax treatment can be different from regular stock sales - you might need to deal with Alternative Minimum Tax (AMT) considerations. Also, when you call MetLife tomorrow, ask them for a detailed breakdown of the transaction dates. If you held the stock for more than a year before it was sold, it would qualify for long-term capital gains treatment which has more favorable tax rates. If it was held for less than a year, it's treated as short-term gains and taxed at your regular income tax rate. One more tip - if this was part of a company acquisition like some others mentioned, the acquiring company sometimes provides a tax information packet to employees explaining exactly how to report these transactions. You might want to check with your current or former employer's HR department to see if they have any additional documentation about the stock sale.

I completely feel your pain with TurboTax this year! I had a similar disaster with their investment import feature - it somehow doubled my dividend income and completely missed several stock splits from my portfolio. What really got me was that I discovered these errors AFTER filing, so now I'm stuck dealing with an amended return. The most frustrating part is that I specifically upgraded to their Premier version because they advertised "seamless investment reporting" - what a joke! I ended up downloading all my tax documents and cross-referencing everything manually, which took an entire weekend. For next year, I'm seriously considering just going with a local CPA who specializes in investment taxes. At least then if something goes wrong, I have someone accountable to work with instead of waiting hours on hold just to be told to buy a more expensive support package.

This thread is incredibly eye-opening! I'm a new community member but had to share my experience because it sounds like TurboTax issues are way more widespread than I thought. I've been putting off doing my taxes because I kept hearing horror stories from friends, but reading all these detailed accounts makes me realize I need to just skip TurboTax entirely this year. I have a fairly complex situation with rental property income, some stock trades, and freelance work - sounds like exactly the type of scenario where their system breaks down. Can anyone recommend which alternative software handles rental property depreciation calculations well? I'm leaning toward just finding a local CPA at this point, but if there's reliable software that actually works correctly, I'd love to save the money. Thanks for all the detailed experiences everyone has shared - this is exactly the kind of real-world feedback you can't get from company websites!

For those who want a quick rule of thumb, many CPAs suggest salary should be at least 1/3 of S Corp distributions for service-based businesses. So if you want to take $90k in distributions, your salary should be at least $30k. This isn't foolproof but supposedly comes from patterns in what triggers IRS scrutiny. Just passing along what my CPA told me!

The confusion around S Corp profit distribution formulas is totally understandable - there really isn't one "correct" equation because the IRS deliberately keeps "reasonable compensation" somewhat subjective. What I've found helpful is thinking of it in terms of what you'd pay to replace yourself. If your S Corp couldn't function without you, then most of the profit should probably be salary. But if you've built systems, have employees, or significant capital investments generating revenue, you can justify a higher distribution percentage. A practical approach: Start with market salary data for your role/industry (sites like PayScale, Glassdoor, or BLS.gov), then adjust based on your actual hours worked and responsibilities. Document your reasoning - if the IRS ever questions it, you want to show you made a good faith effort to be reasonable. One thing that's helped me is tracking what percentage of revenue comes directly from my personal work versus other factors (equipment, employees, systems, etc.). The higher your personal contribution, the higher your salary should be relative to distributions.