Does anyone know if we need to file form 1120 even if we had zero actual income (only stock purchases) and are showing a loss? My CPA wants to charge me $800 to file an "incomeless" return and that seems steep.

I went through this exact same situation last year with my startup! The confusion around stock purchases vs. income is super common for first-time corporate filers. Miguel's advice above is spot-on - the $52.32 from founders purchasing shares goes on your balance sheet as paid-in capital, not as income on your P&L. For your business expenses like Zoom and Google Workspace, those are absolutely deductible as ordinary business expenses. Don't worry about the "startup costs" issue - those rules mainly apply to expenses incurred before you're actually operating (like market research before incorporating). Once you're incorporated and actively running your business, software subscriptions and similar operational expenses are regular deductions. Your Form 1120 will likely show a net operating loss, which is totally normal and expected for a new startup. The IRS sees this all the time - you're definitely not going to raise any red flags by having expenses exceed your minimal activity in year one. Just make sure you do file the return even with zero income, as C-Corps are required to file annually regardless of activity level.

Make sure you're using the CORRECT TAX FORMS for 2021! This is super important - you can't just use current year forms for prior year returns. Go to the IRS website and download the specific 2021 forms or make sure your tax software is generating the correct year's forms. I screwed this up once and had my return rejected because I grabbed the wrong year's form from the IRS website. Wasted weeks of processing time just to start over.

Adding to what others have said about the 3-year refund window - you're actually in decent shape timing-wise! The 2021 tax deadline was April 18, 2022, so you have until April 18, 2025 to claim that refund. That gives you several months to get everything sorted out. One thing I haven't seen mentioned yet: when you do mail your 2021 return, include Form 8453 (U.S. Individual Income Tax Transmittal for an IRS e-file Return) if FreeTaxUSA generated one. This form is required when you prepared your return electronically but have to mail it instead of e-filing. Also, don't stress too much about the paper filing process - millions of people still file paper returns every year. Just make sure you sign and date everything, include all required attachments, and use certified mail like others suggested. The IRS is used to processing paper returns, it just takes longer than e-filing. For your 2022 and 2023 returns, definitely prioritize getting those done ASAP since you should be able to e-file those through most services. Good luck!

Great question! This confusion about Box 12 codes trips up so many people every year. Just to reinforce what others have said with a slightly different angle: Think of your W-2 as telling a complete story about your year. Box 1 (wages) is already the "final answer" after all deductions and contributions have been applied. The Box 12 codes are just showing you the details of how that final number was calculated. So Code AA (Roth 401k) = "Hey, this amount was included in your taxable wages because you chose to pay taxes now instead of later" And Code DD (health insurance) = "Here's what your employer spent on your health coverage - just FYI, no tax implications" For troubleshooting your refund calculation differences, try this: ignore all the Box 12 codes completely and just use Box 1 for your wages. If your calculations still don't match between paper and software, the issue is probably somewhere else entirely (maybe different treatment of standard deduction, tax tables, or other income sources). The fact that TaxAct and your paper calculations differ suggests you might be double-counting or missing something unrelated to these retirement codes.

Adding to all the great advice here - I just wanted to share my experience as someone who made this exact mistake a few years ago. I was manually subtracting my Code AA amount from Box 1 wages because I thought "retirement contributions should reduce taxable income," not realizing that Roth contributions work the opposite way. The IRS sent me a lovely letter explaining that I had under-reported my income and owed additional taxes plus penalties. That's when I learned that Code AA contributions are already properly included in Box 1 wages - no adjustments needed! For anyone still feeling uncertain about these codes, here's a simple rule of thumb: if you're not a tax professional and the IRS instructions don't specifically tell you to enter a Box 12 code somewhere on your return, then you probably don't need to do anything with it. The codes are mostly there for informational purposes and to help employers/the IRS track certain types of benefits. Your Box 1 wages are already the "tax-ready" number after all the proper adjustments have been made by your employer's payroll system.

I've been through this exact situation with my spouse and the PTC allocation nightmare. What really helped us was understanding that the dramatic swings you're seeing are due to "cliff effects" in the credit calculation. At your income level ($43,200), you're right around where small changes in allocation percentages can trigger big differences in how the credit formula works. The 1% allocation is giving you most of the credit benefit while taking almost none of the advance payment responsibility - but this creates an unfair burden on your stepdad. Here's what I'd recommend: First, sit down with your stepdad and run scenarios in both of your tax software to see the combined impact. The goal should be finding an allocation that's fair to both of you, not just maximizing one person's refund. Second, consider who actually used the coverage and who paid the premiums. If your stepdad paid all the non-subsidized portions and you were just added to his plan, maybe something like 10-20% allocation to you would be more reasonable than either 1% or 50%. Third, keep documentation of how you decided on the allocation - receipts, notes about who paid what, etc. The IRS allows flexibility but expects the allocation to make sense for your actual situation. Don't just pick 1% because it gives you the biggest refund - that could create problems for your stepdad and might not hold up if questioned. Work together to find something fair for both of you.

The Premium Tax Credit allocation can definitely be overwhelming, but you're asking all the right questions! The wild swings you're seeing in your refund amounts are actually normal - they happen because the PTC calculation involves complex income thresholds and subsidy formulas. What's happening is this: at 1% allocation, you're taking responsibility for only about $135 of the $13,500 in advance payments ($13,500 x 0.01), but you're still getting credit calculated based on your income of $43,200. At 8%, you're responsible for about $1,080 in advance payments, which might exceed what you qualify for. Here's my advice: Don't choose your allocation percentage based solely on which gives you the biggest refund. The IRS expects the allocation to reasonably reflect who was actually covered and who benefited from the insurance. Since this was your stepdad's plan and he likely paid the non-subsidized premiums, a smaller allocation to you (maybe 10-25%) would probably be more appropriate than 50/50. Most importantly, coordinate with your stepdad before filing! Run the numbers in both of your tax software to see the combined impact. That $8,900 refund you get at 1% allocation might create an equally large tax bill for him. Keep documentation of your decision-making process and consider factors like who paid premiums, who used the coverage, and what feels fair given your respective situations. The goal should be an allocation that makes sense for your family, not just tax optimization.

Important side note: If the life insurance policy was transferred to you for valuable consideration (meaning you bought it from someone else), then the tax-free treatment might not fully apply. This is called the "transfer for value rule." Doesn't sound like that's your situation since you were just named as a beneficiary, but thought I'd mention it for completeness. Also, if the insurance company held the money for a while before paying you and you received interest on top of the death benefit, that interest portion IS taxable, even though the death benefit itself isn't.

Just wanted to add another perspective here - I work at a financial planning firm and we see this confusion with 1099-R forms from life insurance payouts pretty frequently. The issue is that the IRS uses the same form (1099-R) for both retirement plan distributions AND life insurance death benefits, which creates a lot of confusion. Here's a quick checklist for anyone dealing with this: 1. Box 2a should show $0.00 or be blank for a non-taxable death benefit 2. Box 7 will have a distribution code - for life insurance it's often code 4 or 7 3. In TurboTax, when entering the 1099-R, you MUST specify it's a "death benefit from life insurance" not just a regular distribution Dylan, sounds like you got it sorted out based on your follow-up comment, but for others reading this thread - don't panic when you see that big number initially show up as taxable income in TurboTax. The software is just being cautious until you provide all the details about what type of distribution it is. And yes, you absolutely should still report it on your return even though it's not taxable - the IRS computer systems will be looking for it since they got a copy of your 1099-R.