I went through this exact same situation about 6 months ago when setting up my solo 401k! The confusion around the start date is so real, but here's what I learned after doing a ton of research and consulting with my CPA: You should definitely use the date from 12 years ago when you first started as an independent contractor. The IRS considers your sole proprietorship to have begun the moment you started earning self-employment income, even if it was through tutoring companies. The key factor is that you weren't an employee - you were an independent contractor, which means you were already operating as a sole proprietor from a tax perspective. When you started taking direct clients 4 years ago, you didn't create a new business - you just expanded your existing sole proprietorship. It's the same business entity that's been running for 12 years, just with different client acquisition methods. If you can't remember the exact date from 12 years ago (and who could?), just use January 1st of that year. The IRS really only cares about getting the year approximately right. I did this same thing and my EIN was approved instantly online. Trust me, getting that solo 401k set up is going to feel amazing! The contribution limits are so much better than regular IRAs. I'm kicking myself for waiting as long as I did to get organized with this stuff, but like you said - better late than never!

I'm a tax preparer and see this question come up all the time! Everyone here is giving you solid advice - you should definitely use the date from 12 years ago when you first started as an independent contractor. The IRS defines a sole proprietorship as starting when you first begin business activities with the intention of making a profit. Since you were working as an independent contractor (not an employee) 12 years ago, that's when your sole proprietorship began, even though you were getting clients through tutoring companies. Here's a simple way to think about it: if you were filing Schedule C or reporting self-employment income on your tax returns 12 years ago, then you were already operating as a sole proprietor. Adding direct clients later was just business growth, not a new business start. Don't stress about the exact date - if you can't remember specifically when you started 12 years ago, January 1st of that year is perfectly acceptable. The IRS processes thousands of these applications and they're not going to scrutinize the exact day, especially for something that happened over a decade ago. Your EIN application should go through smoothly, and you'll be all set for that solo 401k! It's great that you're finally getting this organized - those contribution limits are going to make a real difference for your retirement savings.

Just want to emphasize what others have said - definitely file your return! With only $10,000 in income, you're well below the $13,850 standard deduction for 2024, so you won't owe any federal income tax. But if your employer withheld ANY federal taxes from your paychecks during those 6 months (which they almost certainly did), that money is yours to get back. Think of it this way: your employer was withholding taxes assuming you'd work the full year and earn much more. Since you only worked 6 months, you were essentially overpaying the whole time. Filing is the only way to get that overpayment back as a refund. Also, as someone mentioned, you might qualify for the Earned Income Tax Credit since you're over 25. With your income level, that could add around $600 to your refund on top of whatever was withheld. The filing process should be straightforward with just one W-2, and you can use free filing software since your income qualifies you for the IRS Free File program. Don't leave money on the table - file that return!

Great question! I was in a very similar situation a couple years ago - worked about 7 months and made around $11,500 before having to leave for personal reasons. I almost didn't file because I thought I didn't make enough, but I'm so glad I did! You should definitely file your return. Even though your $10,000 income is below the $13,850 standard deduction (meaning you won't owe federal income tax), you'll likely get back whatever federal taxes were withheld from your paychecks. In my case, I got back about $950 that had been withheld during those 7 months. The key thing to understand is that your employer's payroll system was probably withholding taxes based on the assumption that you'd work the full year at that pay rate. Since you only worked 6 months, you essentially overpaid through those automatic deductions. Also, make sure to check if you qualify for the Earned Income Tax Credit - at 27 years old with $10,000 in earned income, you might be eligible for around $600 additional refund even if you don't owe any taxes. That's free money you'd miss out on by not filing! The process is really straightforward with just one W-2, and you can use the IRS Free File program for completely free preparation since your income qualifies. Don't leave that refund money sitting with the IRS!

This thread is a goldmine of information! I'm a tax preparer and I see this issue constantly with clients who paper-filed their previous year's return. The $0 AGI solution is absolutely correct and it's frustrating that most tax software doesn't make this clear upfront. Just to add some additional context for anyone still struggling: This verification issue can also occur if you filed a superseding return (not just amended) by mail, or if the IRS processed your return late due to backlogs. Sometimes even returns that were supposedly e-filed don't show up properly in their verification system if there were processing delays. One tip I always give my clients: If you know you paper-filed last year, start with $0 as your AGI right away instead of trying different numbers from your transcript. It'll save you the frustration of multiple rejections. The IRS has this workaround specifically because they know their electronic verification system has gaps when it comes to paper returns. Glad to see so many people found solutions here - this is exactly the kind of community knowledge sharing that helps everyone navigate the tax system more effectively!

This is such a helpful thread! I'm dealing with a similar AGI rejection issue right now. I paper-filed last year because I had some complicated stock transactions that my tax software couldn't handle properly, so I went the safe route and mailed everything in. Been trying to e-file through FreeTaxUSA this year and keep getting rejected even though I'm using the exact AGI from my transcript. After reading through all these responses, I'm definitely going to try the $0 AGI approach tonight. It's honestly ridiculous that the IRS has this workaround but doesn't publicize it better. I've wasted so much time trying different combinations of numbers from my transcript and account summaries. Would have saved me hours of frustration if this was clearly explained somewhere on their website or in the tax software. Thanks to everyone who shared their experiences here - this is way more helpful than anything I got from calling the IRS helpline (which was basically nothing since I couldn't even get through to a human).

That's a really interesting observation about the EITC connection! I've been wondering about the patterns myself. The IRS does tend to scrutinize EITC claims more heavily since it's one of the most commonly exploited credits for fraudulent refunds. It makes sense they'd proactively add identity theft protection to accounts that claim it. I claimed EITC this year too and got my CP01E about 3 weeks after filing. My tax preparer mentioned that the IRS has been ramping up their fraud prevention efforts, especially around refundable credits. So while it might feel targeted, it's probably just them being extra cautious with returns that historically have higher fraud rates. The good news is that legitimate EITC claims shouldn't be delayed by the CP01E - it's just an extra layer of account protection moving forward.

I wanted to follow up on your original question about the CP01E notice and your refund timing. Based on all the helpful responses here, it sounds like you can breathe easy! The notice is actually the IRS looking out for you, not delaying your refund. Since you filed on February 12th through TaxSlayer, you should still expect your refund within the normal 21-day processing window (assuming no other issues with your return). The CP01E is completely separate from refund processing - it's just adding a protective flag to your account for future filings. Your switch to online filing definitely didn't trigger this notice. The IRS uses much more complex data analysis to identify potential identity theft risks, and honestly, online filing is often more secure than paper filing anyway. I'd recommend taking up the suggestion about getting an IP PIN for next year's filing - it's free extra security that you can set up right now through your IRS online account. And definitely keep monitoring your credit reports as suggested, but don't stress about the refund timing. You should see that money for your car repairs right on schedule!

This thread has been incredibly helpful! As someone who recently inherited my grandmother's vintage jewelry collection, I'm dealing with very similar tax questions. The key points about stepped-up basis, the 28% collectibles rate, and proper documentation really clarify things. One additional tip I learned from my estate attorney: if your uncle's estate was large enough to require filing a federal estate tax return (Form 706), that return would have included valuations for significant assets like valuable baseball cards. If such a return was filed, those professional valuations can serve as excellent documentation for your stepped-up basis. It might be worth checking with whoever handled the estate to see if this applies to your situation. Also, some states have their own inheritance or estate tax rules that could affect your situation differently than the federal rules discussed here. Since you mentioned being in Pennsylvania, you're in good shape there - PA doesn't have a separate capital gains rate like some states do. Best of luck with the collection! It sounds like you have a solid understanding now of what you need to do to handle this properly.

One thing I haven't seen mentioned yet is the potential for some of these cards to qualify as "business inventory" rather than collectibles if your uncle was actively buying and selling cards as a business. This would change the tax treatment completely - instead of capital gains, it would be treated as ordinary income, but you might also be able to deduct business expenses. This probably doesn't apply in most inheritance situations, but it's worth considering if your uncle was a dealer or had a pattern of regular buying/selling. You'd need to look at his tax returns and business activities to determine this. If he was just a collector who occasionally sold duplicates, then all the collectibles advice above applies. Also, keep in mind that if any of the cards are graded by services like PSA or BGS, those authentication and grading costs can add significant value that should be factored into your basis calculations. Professional grading can sometimes double or triple a card's value compared to ungraded condition.