r/TaxQuestions

For context, I'm 17 years old and my friend and i started a little 'business' where we find students who need tutoring and match them with our friends who want to tutor and take a cut of the money. for example, if jonathan pays $50 / hr for tutoring and we hire sam to tutor jonathan for $30/hr, we make $20/hr profit. This month, we have made $1200 in profit with all of our tutors/students in our classes. My partner and I are splitting the money 35/65 in terms of equity so I get $420. My question is, at the end of this year, will I need to file for taxes? For context, I'll turn 18 next month so I'll be an adult before the end of the year (in case that's relevant

I’m the executor of my mother in law’s estate in NC. She left 4 children that will divide the proceeds of her estate. The only asset is her home. I had an appraisal done shortly after her death. The home appraised for $180,000. We used that amount on our 90 day inventory. The home needs a lot of work and after several offers it was ultimately sold for $150,000. After paying off the mortgage of $50,000 each of the four adult children will receive approximately $25,000 each. It is my understanding that for purposes of capital gains taxes the basis number would be the appraisal at the time of her death which was the $180,000. Given this, is it correct that they will owe no capital gains taxes and will not be required to report any of the $25,000 as income. Is this correct? Second question: Would the $30,000 loss based up the house selling for only $150,000 result in each child being able to take a $7,500 loss on their taxes? ($30,000 divided by 4 = $7,500)
Thanks in advance for your help.

Hey all! I'm hoping someone here can help me with a question about multiple W-2c forms. I'm planning to get an outside consultation, but want to be as prepared as possible going into that meeting. I appreciate any help anyone can lend. Thank you!

TLDR

I'm a salaried W-2 employee for a company that uses an outside payroll firm.

In January, I received an incorrect W-2 and was issued a W-2c in March. However, that W-2c was also incorrect. I filed a tax extension, and this summer I received a second W-2c. On the first W-2c, the payroll company fixed the original problem… but created a new unnecessary one in the process. On the second W-2c, they updated a completely different box.

Now I'm wondering: are W-2c corrections cumulative (i.e., do I enter the changes from W-2c #1 and W-2c #2), or does the second one supersede the first (i.e., ignore the changes on W-2c #1 and only enter the changes from W-2c #2)?

Either way, it creates a problem for me. Superseding (ignoring #1, using only #2) doesn't fix the original issue that made the W-2c necessary in the first place. Cumulative (using both #1 and #2) fixes the original issue, but locks in the mistakes from W-2c #1.

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Now for the much more detailed version, for those who are interested:

On my original W-2, all the numbers were correct except Box 12a, Code W: $12,498.96. This box should have read $8,000.16.

The error was in how our HSA premiums and HSA contributions (the latter a combination of my contributions and the company's) were viewed.

W-2c #1 made this correction… but then took the difference between the two figures ($4,498.80) and added it to my income. They also issued changes to Boxes 1, 5, 6, 16, and 17. Interestingly, they did not change Box 3.

I raised this as an issue, and months later they issued W-2c #2. The change on this one was:

Box 12a, Code DD: $13,533.12 → $17,533.12

Notably, on my original W-2, Box 12a was Code W, and Code DD was in Box 12b. 

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The only change I actually needed was to Box 12a, Code W, to show that I did not over-contribute to my HSA by ~$3,949.

Instead, my W-2c forms now show an increase in income and a change to my Code DD amount, entered in what appears to be the wrong box (12a instead of 12b).

The Bottom Line: I'm not sure where to go from here, and I'm (clearly) not a tax expert. Any help on the following would be appreciated: 

1. Are W-2c changes entered cumulatively, or does the most recent one supersede all prior corrections? That affects what changes I need to ask for.
2. Should I request a completely new W-2, or can a third W-2c fix everything? 
3. Should I ask the payroll company to void both prior W-2cs and issue a single, consolidated corrected W-2c, rather than trying to stack corrections myself? 
4. Since W-2s and W-2cs are also filed with the SSA, is there a way to confirm which version the SSA/IRS has on record, in case it differs from what I end up using to file? Is there any reason to worry that the correct numbers will not be reported via the W-2c? 
5. Lastly, what are my options if the payroll company does not correctly report or will not issue a third W2-c?

Since employers rarely verify and they can file with the correct ITIN?

I travel to another state for work however my state of residence and the state I work in have a reciprocal tax agreement. I did have money withheld on my wages from the non-residential state but I received a letter saying I owe money to my state of resident because a credit was claimed on tax paid to other states. My income was also entered in the non-residential state filing instead of putting 0 and reporting that income on my state of residence filling, and that’s how it’s supposed to be from what I read today.
I contacted the person who I paid to do my taxes and they said just to pay the $400 penalty fee but I’m confused why amending my taxes and re-submitting them wouldn’t be done.
Thanks in advance! I clearly don’t understand taxes

My tax professional says unexpected tax bill is $5k , it’s currently on an extension. I don’t have/want to spend any extra money this year by paying or install plans until next year because funds are tight as of now. Since it’s on an extension would I be in a too bad position if I just filed it next year and paid in full before the next April 15 day?

We were in a major bind because of COVID and were too afraid to file our taxes from 2021 until 2024 bc of loss of employment due to COVID for years. We filed them all finally this past January.

However, we were suppose to get a federal tax refund for 2021 for 8k. Then for 2022 federal refunds it says we owed 8k. We figured it was a wash but have since learned they will mot refund the 2021 amount bc it was past 3 years. However, still requests the 2022 one that was originally 8k and is now about 14k with penalties and fees.

Would appealing this in any way be possible?

What’s the likely good that going through the Collections appeal process would be successful?

Any other route to get the 8k from 2021 recognized and reduce this fee that has a strong chance of success?

Please help! Doesn’t seem right they can decide to keep 8k and still charge us 8k.

I’m an au pair and am thinking about starting a well-paid online job, but I’m worried about taxes—since the rules say au pairs can’t have another source of income. Does anyone know how to handle this or can offer some advice?

got hit with a massive IRS bill from couple years ago and right after that happened i had a medical emergency that wiped me off completely. i keep hearing that IRS has hardship programs to lower what you owe but everytime i look into the guidelines it feels like a trap to me my monthly expenses are insane rn but they dont give a crap about huge medical debts to they?? they just look at your gross income and if on paper income looks okay to them you get standard monthly bills you cant afford.. is there hope with IRS or am i wasting my time? Frustrated as hell so lmk if i can hire someone because i really cannot afford addin another monthly payment plan to the mix

When i was cleaning out my parents' home I found several letters from the IRS stating that they owed back taxes from several years ago.

I'm not sure if my dad filed and didn't pay, filed late and didn't pay, or... his paperwork was a hot mess.

Over time it looks like that the interest on the amount has increased by a huge amount.

Mom has alzheimer's and isn't able to help, but i do have poa.

How do I go about taking care of this?

Every time I think I've got a handle on where I owe sales tax, I discover another state I should've been collecting in months ago. My business has grown faster than my ability to track nexus rules, filing deadlines, and rate changes across every jurisdiction I sell into, and I'm genuinely worried about what I might owe in back taxes and penalties. I keep wondering whether it's finally time to bring in sales tax consulting services, or if I'm overreacting and could still sort this out myself.

I gave my 2024 and 2025 tax returns to my CPA last week to amend them. My previous tax preparer didn’t report some miscellaneous income and also missed a net loss for 2025. She told me the miscellaneous income was ROC (return of capital) and wasn’t taxable.

I invested in high-yield dividend investments, and the dividends were automatically used to pay down my margin loan. Fidelity reported some of these payments as substitute payments/miscellaneous income.

If I end up owing more tax after the amendments, will I also have to pay interest or penalties?

Since I’m voluntarily amending the returns, is there any way to have the interest or penalties waived?

Just trying to understand how this works.
Thanks!

Hi there folks, I’m just curious as to the extent of taxes I can write off as a rideshare driver. I assume I can literally write off anything that goes into the vehicle as long as it’s business related from the actual purchase of the full vehicle(started ridesharing right after purchase) car fresheners, maintenance(cleaning supplies, oil change, brake pads/calipers, tires, etc.), gas, to even the $1-$3 it costs sometimes to fill up air in the tires?

Any helpful guidance and information is fully welcome, thank y’all so much.

It’s my first year working in marketing full time as a 1099 employee. I have $100-$200ish in expenses each month, with the occasional big purchase (new phone, camera, etc) and I’ll make around $70k over the year

How much do you pay yearly? I’m saving 30% (ish) but want to make sure I’m covered for next year/want to see if I can let up a little and invest more of that income that’s being saved for taxes

Hello,

I recently received backpay for my VA retirement after a few years. I had two different lawyers through the long process and the VA sent more than was needed to my original lawyer.

VA backpay is non taxable to the veteran so this is where my issue is. The lawyer wants to send me back the overpayment amount but says his accountant insist on a 1099 to keep a trail of it. I understand him marking box 3 will cause issues when filing taxes as it will look like he paid me.

Using google it says while it will cause issues for taxes I would need to claim the amount then later clear it out and explain it was for a VA refund. It sounds like while it would be an issue I wouldn’t be on the hook for taxes if filed correctly. Can anyone confirm this?

So I filed my taxes this year and my state tax returned was intercepted. I had no idea why. It took a good while to track down what happened. Turned out the District of Columbia took my return for a payment I owed them.

So in 2019 I lived in DC but I accidentally filed my taxes in the state of MD where I worked. I filed as a non-resident in MD and did not remove my income so I paid them ~$7.7K in state taxes in 2019.

DC says if you lived here you need to file a D-40. So I went to a tax expert paid to get it done. I get a bill in the mail saying I owe DC ~$7.8k for taxes that year and $8.3K in interest and $2K in a penalty. I reached out to MD and they said you can't amend a return over 3 years. So I can't get my $7.7k back from them. So I now spoke to DC and they said basically they might be able to get the penalty removed but not the interest.

Now I had 0 idea i did anything wrong for 7 years. I am not liable for 7 years of interest even though DC failed to alert me of this issue. They mailed a letter to my DC address over and over. I lived there for a year and a half. I never received anything in the mail EVER. No text, not phone call, no mail, no email...nothing. I only found out because my state tax return in 2026 was taken. In which time I attempted to fix this issue. Had DC alerted me in a timely manner i could have done all of this and got the money back from MD and sent to DC and had a net zero impact. Now i need to pay in total ~$18k to DC. I am beyond angry about all this but it doesn't seem like I have a solution.

Do i have any grounds to stand on to get out of this? I am almost resigned to paying the $7.7K and taking that loss. But having it be over double when i didn't even know it existed seems wild to me. I have asked to be forgiven for the Penalty and told that is possible. But no one I spoke to thinks i can get out of $8.3K in interest for a period i had no clue i did anything wrong. I feel like the punishment is for some one who knowingly dodged taxes. But I paid taxes in 2019....i just did it wrong (my fault). Common sense says pay us the money you owe and since MD won't give you anything back we understand you have paid double the taxes because we (DC) didn't alert you. Not...pay us an egregious amount of interest and penalty too.

I'm still working but my employer froze the employee pension program over ten years ago (no new participants) and moved everyone over to a defined contribution (401k) program. I am fully vested in the pension program.

Our pension program will be terminated and I have three options with respect to what I've earned.

1. Company can buy me an annuity or

2. I can rollover the pension assets directly into my existing 401K or

3. The office will directly transfer my pension assets (pre and post-tax $$$) to my brokerage where I have both an IRA rollover and Roth IRA.

I've opted for option 3 and am thinking I can deposit the check funded with pre-tax dollars and earnings directly into a new rollover IRA account (keeps the accounting clean and I won't comingle this money with an existing rollover account - I'm thinking for doing a Roth conversion with this pot of money downline. Separately, I will deposit the post-tax dollar distribution check directly into an existing Roth.

Has anyone ever done this before? Does it make sense? If I were to do a Roth conversion with the pre-tax distribution is it as simple as paying taxes on the value of this distribution or do I have to factor in my existing rollover IRA assets when doing the math?

I'd appreciate any thoughts, especially from someone who might have executed this before. Thanks.

So I know this is bad, but life has kicked me hard and I’m trying to get caught back up. Lost a dog, then a child, then another dog, then divorce, and now here I am trying to pick the pieces back up.

I did send in my tax returns for the year 2023 but the IRS claims they never got them. I still have copies of those returns (in case mailing them is the safest bet. Do not expect a refund as I was self-contracting.

As for 2024, I do get to claim daughters on that year’s taxes. Her father and I are both custodial parents and split everything 50/50 to the best of our capabilities.

2025- I need to also file local taxes that shouldn’t have been taken out because I wasn’t working in the township, but I’ve been down this road before and know how to handle it.

I’ve been doing my taxes since I started working but I am stumped as to the best way to proceed here. My questions is: can I go on a site like TurboTax and file them all at once or do I need to them one by one and wait for a response as to what potential fines I may have from that year? I do expect a refund from the 2024 year, as I get to claim my daughter.

My original tax return included both my federal and California state returns. I recently found an error and told my CPA that I want to amend my tax return.

If I just tell my CPA I want to amend my tax return, does that normally mean they will amend both the federal and state returns, or do I need to specifically ask for the state return to be amended too?

Also, is it common for preparers to charge a separate fee for the state amendment?

So many of my clients have told me this day in about day out and truly I lived it some extent considering how much false information o see why bad advice.. what are you using to stand out.. I have had over 1000 people on the last 7 years say I am the best they have ever had!! Want your opinions.