One detail nobody's mentioned: if you don't report your cash tips to your employer and just report them on your tax return later, you'll end up paying the full 15.3% FICA tax yourself (that's Social Security and Medicare). When you report to your employer, they pay half of that. So it's actually cheaper for you to report properly!

Just wanted to add something important that might help - make sure you understand the $20 monthly threshold rule. If you receive less than $20 in tips in any given month, you don't have to report those to your employer (but you still need to report them on your tax return). However, if you're making $50-100 per night like you mentioned, you're definitely way over that threshold and need to report to your employer. Also, keep in mind that "tips" includes more than just cash - if customers tip you through credit cards, apps, or even give you non-cash items of value, all of that counts as taxable tip income. Your employer should already be handling the electronic tips properly, but make sure you're tracking everything else. The IRS actually has a free publication (Publication 531) that explains all the tip reporting rules in detail. Worth reading through if you want to make sure you're doing everything by the book!

22 Just an FYI - I called the EFTPS customer service line (not the IRS) at 1-800-555-4477 and they were able to tell me exactly which form to select for my CP128. Only took about 10 minutes on hold. Sometimes the EFTPS folks are more helpful than the IRS for these specific payment questions.

I've been through this exact situation with a CP128 notice last year. The key thing that finally worked for me was calling the EFTPS helpline directly at 1-800-555-4477 rather than trying to reach the IRS. They walked me through the correct form selection based on what type of tax the penalty was related to. For my situation (employment tax penalty), I had to select Form 941, but the EFTPS rep emphasized that it really depends on the underlying tax type shown on your CP128 notice. They also told me to include three things in the comments: the CP128 notice number, the tax period, and my EIN. The payment posted correctly within a few business days, and I received confirmation that it was applied to the right penalty. Much easier than the hours I spent on hold with the IRS!

Has anyone used an online service like Zillow or local property tax records to figure out the historical value? I inherited a house from my grandmother in 2012 and the lawyer handling the estate didn't get an appraisal at the time. Now I'm selling and have no idea how to document what it was worth back then.

One thing I haven't seen mentioned yet is that you might want to consider the timing of your sale carefully. If this puts you into a higher income bracket for the year, you could end up paying the 20% long-term capital gains rate instead of 15%. Also, since you mentioned this is for your kid's college, look into whether your state offers any tax advantages for education expenses that might offset some of the capital gains. Some states allow you to contribute to 529 plans and get state tax deductions, which could help reduce your overall tax burden. Make sure you keep detailed records of all the property taxes you've paid over the 20 years too - while these don't add to your basis, they can sometimes be deducted in the year of sale depending on how the closing is structured.

Has anyone else had issues with tax software correctly calculating Part III of Form 1116? I use TurboTax and it seems to be miscalculating my credit limitation.

I went through the exact same Form 1116 confusion when I moved to the UK! The instructions are absolutely terrible for newcomers to international tax filing. Just to reinforce what others have said - yes, both UK income tax AND National Insurance contributions qualify for the Foreign Tax Credit. This is explicitly stated in IRS Publication 514. Don't let anyone tell you otherwise. For Part II, think of it this way: Part I is about your income, Part II is about the taxes you paid on that income. So your UK salary goes in Part I, and the actual tax amounts withheld (both income tax and NI) go in Part II with the dates they were withheld. One thing I wish someone had told me earlier - keep really good records of your UK payslips and P60 because you'll need the exact amounts and dates for Form 1116. Also, the HMRC website has a great tool that shows you exactly how much income tax vs National Insurance you paid if you need to break it down. The exchange rate thing is annoying but manageable. I used the IRS annual average rates for simplicity since I had regular monthly withholding. If you had any lump sum payments or bonuses, you'd want to use the specific date rate for those. Hang in there - it gets easier once you understand the structure! Next year when you qualify for Form 2555, you'll have more options to optimize your tax situation.

When I was dealing with a similar issue, I discovered taxr.ai and it was a game-changer. Instead of staring at those cryptic transcript codes trying to make sense of them, the tool analyzed everything and gave me a clear explanation. Showed me I had a verification issue and gave step-by-step instructions on how to resolve it. Saved me hours of research and confusion. Highly recommend if you're stuck trying to decipher IRS language! https://taxr.ai

I feel your pain! Been in a similar situation before. Four months is definitely excessive, especially when you need the money for medical bills. A few things to check: 1. Look for any mail from the IRS - sometimes letters get delayed or lost 2. If you claimed EITC or other credits, they do extra review which adds months 3. Your transcript codes 570/971 that others mentioned usually mean they need to verify something The Taxpayer Advocate Service really can help when you've been waiting this long - they're separate from regular IRS customer service and actually have power to move things along. You can also try contacting your congressman's office like others suggested. Don't give up! Your refund is coming, the system is just painfully slow right now. Keep checking that transcript for any new codes or dates.