I'm dealing with almost the exact same situation right now! Filed as independent when I should have been claimed as a dependent by my parents. Reading through all these responses has been incredibly helpful - especially hearing from people who actually went through this process successfully. A couple of quick questions for those who have been through this: How specific should the cover letter be? Should we include the exact dollar amounts of the tax difference, or just explain the filing status change? And has anyone had issues with the IRS questioning whether you actually qualify as a dependent after the fact? My parents are really stressed about the potential interest charges, but it sounds like most people here had success paying the lower corrected amount rather than the full incorrect bill. Thanks everyone for sharing your experiences - this is way more helpful than anything I could find on the IRS website!

I went through this exact situation two years ago and want to add a few practical tips that really helped us navigate the process smoothly. First, when you're preparing your cover letters for the amendments, include a clear timeline showing when the original returns were filed, when you realized the mistake, and when you're filing the corrections. This helps the IRS understand the sequence of events. Second, make copies of EVERYTHING before mailing - not just your amended returns, but also the cover letters, supporting documents, and payment calculations. I can't stress this enough because mail can get lost, and having exact copies saved us when we had to follow up. Third, consider sending your amendments via certified mail with return receipt. Yes, it costs a bit more, but you'll have proof of delivery and timing, which can be crucial if there are any processing delays or questions later. One thing that really helped speed our process was including our phone numbers in the cover letters and explicitly stating we were available to answer questions if needed. An IRS agent actually called us to clarify a minor detail, and having that direct communication probably saved weeks of back-and-forth through the mail. The whole process took about 10 weeks for us, and paying the corrected lower amount upfront worked out fine - the small interest charge was much better than the financial stress of overpaying. Hang in there!

This thread has been incredibly informative! I'm in a very similar situation with 4 rental properties - 2 profitable and 2 that have been cash drains this year due to major repairs and vacancy issues. The clarification about Schedule E allowing you to offset losses from one property against gains from another is huge for me. I was under the same misconception as the original poster and thought each property had to stand alone. Now I understand that it's the TOTAL rental activity that matters for the passive loss limitations, not individual properties. The active participation rule is also news to me and sounds like it could save me a significant amount in taxes. I definitely qualify since I handle all tenant communications, approve repairs, and make all major decisions myself. My AGI is around $95k so I should get the full $25k allowance. One question though - if I have a net rental loss of say $15k after combining all properties, and I can use that against my W-2 income due to active participation, do I still need to worry about the passive activity loss carryforward rules? Or does the active participation exception mean those losses get used immediately rather than suspended? Also appreciate all the mentions of proper record keeping. I've been pretty sloppy about separating expenses by property and this discussion has convinced me I need to get more organized before next tax season!

This has been such an educational thread! I'm dealing with a very similar situation - I have 6 rental properties where 2 are consistently profitable, 3 break even, and 1 has been a nightmare with major foundation issues this year. What's really helpful is learning that I can absolutely net the losses from my problem property against the income from my profitable ones on Schedule E. I was incorrectly thinking each property was treated separately for tax purposes, which had me considering some expensive restructuring options. The active participation rule discussion is eye-opening too. I definitely qualify since I personally handle all tenant screening, lease negotiations, and approve every repair over $500. My AGI is around $78k, so it sounds like I could potentially use up to $25k in net rental losses against my regular income rather than having them suspended. One follow-up question for those who've dealt with major structural repairs - I had to spend $23,000 on foundation work this year. I've been treating it as a repair expense, but reading through these comments about improvements vs repairs has me second-guessing. Foundation work seems like it would be considered an improvement since it definitely prolongs the useful life of the property. Should I be depreciating this over 27.5 years instead of taking it as an immediate deduction? Also really appreciate all the software recommendations and record-keeping advice. I've been using a basic spreadsheet but clearly need to upgrade my system before tax season gets here!

In case anyone else is reading this thread with a similar issue - make sure you check if your state has different rules for claiming refunds! Some states have longer statutes of limitations than the federal 3-year rule. For example, in Montana you have 5 years to claim a refund, and in South Carolina it's 3 years from the date you actually file (with no expiration if you never filed). I almost missed out on a state refund because I assumed the deadlines were the same as federal.

I'm really sorry to hear about your situation, Charity. Unfortunately, based on the information you've provided, it does appear that you've missed the deadline for claiming your 2019 refund. The three-year statute of limitations would have expired on July 15, 2023, since that was the COVID-extended due date for 2019 returns. However, I'd strongly encourage you to explore a couple of options before giving up completely: 1. **File the return anyway** - Even without getting the refund, filing will create an official record of your income and any withholding or estimated payments you made. This could be important for future financial needs. 2. **Check for any special circumstances** - While rare, there are some exceptions to the three-year rule for things like military service in combat zones, living in federally declared disaster areas, or certain other documented hardships. 3. **Consider state refunds** - As Hugo mentioned, some states have different deadlines than federal. Check your state's rules - you might still be eligible for a state refund even if the federal deadline has passed. 4. **Apply withholding to other years** - If you had tax withholding in 2019 and owe money for other tax years, you might be able to work with the IRS to apply those payments to years where you have a balance due. Don't beat yourself up too much - 2020 was an incredibly challenging year for everyone, and it's understandable that things slipped through the cracks.

Don't forget that your state's Department of Labor might be able to help too! When my employer went bankrupt in 2023, I contacted our state labor department and they had wage records they could provide. It didn't have all the tax withholding details but it confirmed my earnings which helped with filing Form 4852. Just another avenue to try if the other methods aren't working for you.

Another option worth mentioning is to check if your employer had any kind of COBRA administrator or benefits company handling their employee benefits. Even after bankruptcy, these third-party administrators sometimes maintain access to payroll records for a period of time to handle final benefit reconciliations. I had luck with this approach when my employer folded - the COBRA administrator (Ceridian in my case) was able to provide me with year-end wage statements that had all the information I needed for my W-2. You might find this information on old benefits enrollment materials, insurance cards, or HR communications. It's a long shot but could save you from having to estimate numbers on Form 4852.

Quick question - my brother is in a similar situation. Does anyone know if there's a statute of limitations on filing for an ITIN? He's been in the US for 4 years but never got one. Can he still apply now or is it too late?

This is exactly the kind of predatory practice that unfortunately targets people who don't speak English well. Your friend was likely taken advantage of by a tax preparer who filed an unnecessary return to generate fees. Since your friend's income is below the filing threshold and he just needed an ITIN (probably for banking), he most likely qualified for Exception 1(d) and shouldn't have had to file a tax return at all. The $839 "owed" is probably from a return that was filed incorrectly or unnecessarily. I'd strongly recommend your friend contact the Taxpayer Advocate Service at 1-877-777-4778 - they have multilingual support and can help sort this out for free. They can review what was filed and help determine if the tax bill is legitimate or if the return should be amended/canceled. Also, consider filing a complaint against the community center using Form 14157 if they deliberately filed an unnecessary return to generate fees. This kind of exploitation of immigrant communities needs to be reported. The good news is this situation can likely be resolved - your friend probably doesn't owe anything and can still get his ITIN through the proper exception process.