One thing I'd add to the excellent advice already given - make sure you understand the "wash sale" rules before filing those back returns. If you sold crypto or stocks at a loss and then bought the same or "substantially identical" securities within 30 days before or after the sale, the IRS considers it a wash sale and you can't claim the loss immediately. This is especially tricky with crypto since many people were buying/selling frequently during those volatile periods in 2021-2022. The wash sale rules can significantly reduce your claimable losses, so it's worth double-checking your transaction history before you file. Some of the tax software mentioned earlier should catch this automatically, but it's good to be aware of the rule going in.

One more thing to keep in mind - if you do end up filing those back returns for 2021 and 2022, make sure to file them in chronological order and wait for each one to be processed before filing the next year. The IRS systems can get confused if you file multiple years out of sequence, especially when capital losses are involved. I learned this the hard way when I tried to file 2020, 2021, and 2022 returns all at once. The IRS couldn't properly track my loss carryforwards between years and I had to spend months on the phone (before I knew about services like Claimyr!) getting it sorted out. Filing them one at a time and confirming each is processed takes longer, but it prevents major headaches down the road. Also, when you do get to your 2025 return, double-check that the loss carryforward amount on Schedule D matches what you calculated from your previous returns. The IRS computers don't always pick up carryforwards automatically, so you'll want to have your documentation ready to support the numbers you're claiming.

I worked as a waiter through college and ended up getting a letter from the IRS two years after not reporting like $3k in tips. Had to pay the back taxes plus interest. Not worth the stress tbh. Just report it all now.

Tyler, I totally get your concern about not wanting to cause problems, but you're actually in a really good spot here. Reporting your unreported tips is definitely the right move, and at your income level, it's very likely to work in your favor financially. Here's what you need to know: You'll use Form 4137 to report tips you didn't tell your employer about. This form calculates the Social Security and Medicare taxes you owe on those unreported tips. The good news is that with your $22k base pay, reporting additional tip income will probably increase your Earned Income Credit significantly, which could more than offset any additional taxes you owe. The IRS actually expects situations like yours - that's why Form 4137 exists. As long as you're being honest about your total tips and can reasonably document them (even rough daily notes work), you shouldn't have audit issues. Keep whatever records you have of your tips, even if it's just a notebook or phone notes. Don't worry about getting the restaurant in trouble either. You're taking responsibility for your own tax obligations, which is exactly what you should do. The restaurant has their own reporting requirements, but your personal tax return is separate from that. The amount does matter somewhat - $5.5k is definitely significant enough that you want to handle it properly, but it's not so large that it would automatically trigger problems if you report it correctly with Form 4137.

When I started my insurance agency, I tried deducting moving expenses as business startup costs and got audited. The IRS disallowed all household moving expenses but did allow: - Cost of moving actual business equipment - Business setup costs in new location - Business licenses in new state - Professional fees related to establishing the business Learn from my expensive mistake - keep personal and business expenses completely separate!

This is a really common misconception! I see this mistake frequently with new business owners who think the business motivation makes personal expenses deductible. The key principle is that the IRS looks at the nature of the expense itself, not just the reason behind it. Moving your household is inherently personal - you're relocating your family and personal belongings to live somewhere new. The fact that you're doing it for business reasons doesn't magically transform personal living expenses into business deductions. Think of it this way: if someone moves across the country to take a W-2 job, they can't deduct their moving expenses as unreimbursed employee expenses (even pre-2018). The same logic applies to business owners. Your friend should focus on legitimate business startup costs like business licensing, professional consultations, market research, and any actual business equipment or property being relocated. Those have a much stronger foundation if the IRS ever questions them.

I went through a similar situation when I was preparing for deployment a few years ago. After reading all these responses, I'd definitely echo what others have said about avoiding the Emerald Card - those fees add up quickly and you don't want to deal with that headache while you're in basic training. Since you're military, you have some great free filing options. The IRS Free File program has several providers that offer completely free tax preparation for military members, and you can set up direct deposit to your regular bank account. TurboTax Military Edition is also free for active duty and reserves. One tip I learned the hard way - if you're going to basic training, make sure you can access your bank account online/mobile while you're there. Some banks have security features that might flag activity from different locations. Call your bank before you leave and let them know you'll be at basic training so they don't freeze your account. Also, since you mentioned wanting to pay off that credit card, consider setting up automatic payments from your bank account for at least the minimum payment while you're in training. The last thing you want is a late payment hurting your credit score while you're serving. Good luck with basic training!

Another military member here who learned this lesson the hard way! I used the Emerald Card my first year and regretted it immediately. Between the withdrawal fees, transfer delays, and account maintenance charges, I probably lost close to $100 that could have gone toward my own debt payoff. Here's what worked much better for me: I used the IRS Free File program (completely free for military) and had my refund direct deposited to my checking account. Got my refund in 19 days, no fees, no hassle. Since you're heading to basic training, definitely get this sorted before you leave. The last thing you want is trying to navigate prepaid card customer service from a pay phone during your limited personal time. Direct deposit to your regular bank account is set-it-and-forget-it, which is exactly what you need when you're focused on training. Also, once you get that refund and pay off the credit card, consider keeping it open with a zero balance if it's your oldest account - it'll help your credit score in the long run. Good luck at basic training!

Don't forget about education expenses! If you took any courses or certifications to improve your skills while job hunting, you might qualify for the Lifetime Learning Credit. It's worth up to $2,000 depending on your income. The education doesn't have to be degree-seeking - just something that improves your job skills. I took a digital marketing certification while unemployed last year and was able to claim it. The credit directly reduces your tax owed, not just your taxable income.

Did anyone mention health insurance deductions? When I was between jobs as a contractor, I found out I could deduct 100% of my health insurance premiums as a self-employed person on Line 17 of Schedule 1. Saved me a ton! You don't even need to itemize to get this deduction.