Just want to add - since you're in Texas, at least you don't have to worry about state income tax on the distribution! I did something similar in California last year and got hit with both federal and state taxes plus penalties. It was brutal!

This is exactly why I always tell people to be super careful with 401k loans when changing jobs! The loan offset situation can create such a tax nightmare. One thing I haven't seen mentioned yet - if you haven't filed your return already, you might want to consider doing a partial rollover of the loan offset amount to an IRA before the tax deadline. Even though you can't roll over the cash portion you already received, you can still contribute the loan offset amount to an IRA (up to your contribution limits) and that portion won't be subject to the 10% penalty. You'd need to come up with the cash out of pocket to make the IRA contribution, but it could save you significantly on the penalty portion. Just make sure to mark it as a rollover contribution when you do it. A tax professional would be able to calculate if this makes financial sense based on your specific numbers.

Just FYI - if the forgotten W2 means you owe additional tax, you should file the amendment and pay the extra amount ASAP. The IRS charges interest on unpaid taxes starting from the original due date (April 15th), not from when you discover the mistake.

I went through this exact same situation two years ago and can definitely relate to the panic! The good news is that filing an amended return isn't as scary as it seems once you get started. A few practical tips that helped me: First, gather all your documents before you start - your original return, the forgotten W2, and any other tax docs. Second, double-check if the additional income actually changes your tax liability significantly. Sometimes the extra withholding on the W2 can offset most or all of the additional tax you'd owe. When I did mine, I used FreeTaxUSA for the amendment since TurboTax wanted to charge me $40. FreeTaxUSA was only $15 and walked me through the whole 1040X process step by step. The hardest part was just getting started - once I sat down with all my paperwork, it took maybe an hour to complete. Don't beat yourself up about the mistake - it happens to more people than you'd think! The important thing is you caught it and are being proactive about fixing it.

For the actual numbers - I have a service business in a different field (legal consulting) that's about your size. My CPA had me do a compensation study showing average salaries for people in our field. Based on my study, I pay myself $700k salary on about $3.5M net. My wife is officially our CFO with a $250k salary for 30 hours/week. We documented both with formal job descriptions, board minutes approving the compensation, and market research showing comparable positions. Haven't had any issues with IRS in 6 years.

With $3.9M net profit, your $500k salary is definitely on the low side and could trigger IRS scrutiny. Most tax professionals recommend 40-60% of net profit as wages for service-based S Corps where the owner is the primary value generator. A few key concerns with your situation: 1) **Salary ratio**: At ~13% of net profit, you're well below what the IRS typically expects for a consulting business. Consider bumping to at least $1.5-2M to be safer. 2) **Family client concentration**: 90% revenue from your cousin's company creates additional risk. The IRS might view this as disguised employment or income shifting between family members. Document everything - contracts, deliverables, market-rate justification. 3) **Wife's compensation**: $325k for 25 hours/week needs very strong justification. That's equivalent to a $650k full-time salary, which is a huge jump from her $40/hr independent rate. Consider something closer to $120-150k unless she has executive-level responsibilities that truly command those rates. The family connections will definitely draw extra attention if audited, so documentation is crucial. I'd recommend getting a formal compensation study done and having written job descriptions for both positions.

Does anyone use TurboSelf-Employed for creator income? I've been using regular TurboTax but I'm wondering if the self-employed version would be better for next year with all the deductions and stuff?

This is exactly the kind of situation where getting proper guidance upfront can save you so much stress later! I went through something similar when I first started earning from my YouTube channel. One thing I learned the hard way - even if you're below the 1099 threshold, you're still required to report ALL income. The IRS doesn't care if platforms send you forms or not. I'd definitely recommend amending your return to include the full $950 gross earnings on Schedule C, then deducting the platform fees as a business expense. Also, start keeping track of EVERYTHING going forward. I created a simple spreadsheet to track monthly earnings from each platform, plus all my business expenses (equipment, software, even the portion of my electric bill for my home office). It makes tax time so much easier when everything is organized throughout the year instead of scrambling at the end! The amended return might seem intimidating but it's really not that bad once you get started. Better to fix it now than deal with potential issues later.

I feel your frustration! I had a similar situation last year where my refund was supposed to hit my account on a specific date but never showed up. After weeks of stress, I finally got through to the IRS and found out that when they give you a Direct Deposit Date, that's when they SEND the money, not when you receive it. There can still be delays on the receiving end. Since Cash App confirmed they haven't received anything from the IRS, this sounds like the payment might have bounced back due to a name mismatch or account verification issue. This is actually pretty common with app-based accounts like Cash App, Venmo, etc. Your best bet is to get your tax transcript from irs.gov - it will show you exactly what happened with codes that explain if there was a rejection or hold. If you can't access it online, you can also request it by phone or mail. The transcript will tell you if the IRS sent the payment and if it was returned. If the direct deposit failed, you'll need to contact the IRS to have them reissue as a paper check. I know it's frustrating when it's rent money on the line, but hang in there - you will get your refund, it's just taking longer than expected.

I went through this exact same situation a few months ago! Had a DDD of 2/14 for my Cash App and nothing showed up for over 3 weeks. Turns out the IRS sent the payment but Cash App rejected it because my account name didn't exactly match what was on my tax return (I had my middle initial on taxes but not on Cash App). The key is getting your account transcript from the IRS - it will show transaction code 846 (refund issued) and if there's an 841 code, that means the direct deposit was returned. You can try accessing it at irs.gov under "Get Transcript" but if the website keeps erroring out, you can call 800-908-9946 to request it by phone. Once I confirmed the deposit bounced back, I had to call the IRS to request a paper check reissue. It was a pain getting through but eventually got it sorted. The whole process added about 6 weeks to getting my money, but I did get every penny I was owed. Don't panic - your refund isn't lost, it's just stuck in bureaucratic limbo. The IRS will make it right eventually, even though their customer service is terrible. Keep trying to access that transcript, it's your best bet for understanding exactly what happened!