Another thing to consider - if you continue filing separately, and your wife has to itemize when she otherwise wouldn't want to, she might not have enough deductions to exceed the standard deduction amount. In that case, she would just list all her itemized deductions (even if the total is less than the standard deduction) and potentially pay more tax than necessary. This is why the married filing separately status can be so punitive - you get stuck with the worst of both worlds sometimes.

I'm a tax preparer and can confirm what others have said - this is a real rule that's often overlooked. The technical citation is IRC Section 63(c)(6)(A), which states that if one spouse itemizes deductions, the other spouse's standard deduction is zero, effectively forcing them to itemize as well. What's interesting about your situation is that you've been non-compliant for years without detection. This highlights a gap in IRS enforcement - their matching systems are sophisticated for things like W-2s and 1099s, but they don't routinely cross-reference deduction methods between married filing separately returns. However, I'd strongly recommend getting compliant going forward. If either of your returns ever gets selected for examination (audit), the first thing they'll check is whether you're both using the same deduction method. The penalties and interest on any additional tax owed could add up quickly. Also consider that your wife's father may not be aware of this rule - it's one of those technical requirements that even some preparers miss because it's not intuitive and the software doesn't always catch it when preparing returns separately.

This is such a timely thread for me! I just got my first CP30 notice yesterday and was totally panicking about how to handle the payment correctly. Reading through everyone's experiences here has been a huge relief - I had no idea about selecting "Notice" as the payment reason and entering "CP30" in the notice field. One thing I'm wondering about - my CP30 notice is dated about 3 weeks ago but I only received it yesterday. The payment due date shown is next week. Should I be concerned about any additional penalties or interest that might have accumulated since the notice date? I want to pay it right away using the steps outlined here, but I'm worried there might be extra charges beyond what's shown on the original notice. Also, for future reference, does anyone know the best way to avoid getting hit with estimated tax penalties again? This year caught me off guard because my income was higher than expected from some freelance work. I'd rather just make quarterly payments going forward than deal with these penalty notices again!

I've been through this exact situation multiple times as someone who does freelance work alongside my regular job. The advice about selecting "Notice" and entering "CP30" is absolutely correct - I learned this the hard way after my first penalty payment got misapplied when I selected "Estimated Tax" instead. One thing I'd add that hasn't been mentioned yet: if you're consistently getting hit with estimated tax penalties due to variable freelance income, you might want to look into the "annualized income installment method" (Form 2210 Schedule AI). This lets you calculate your quarterly payments based on when you actually earned the income during the year rather than assuming equal quarterly amounts. It can really help if your freelance income is lumpy or seasonal. Also, definitely keep that confirmation number from your payment! I've had the IRS lose track of penalty payments twice, and having that confirmation number saved me hours of headache proving I actually paid. Screenshot everything and keep it in a dedicated tax folder on your computer or phone.

Looking at all these codes is like trying to read The Matrix tbh

Honestly dealing with IRS codes feels like learning a whole new language. I've been trying to figure out what's going on with my transcript for weeks and it's so confusing. At least now I know there's an updated resource to check out - thanks for sharing this!

Make sure your dad knows he might qualify for the Earned Income Tax Credit for those years, especially if his income was under $20k. I helped my brother file 6 years of back taxes and he actually got REFUNDS for 4 of those years because of EITC, even with self-employment. The IRS has a "lookback" ability to claim refunds for up to 3 years, so at minimum he should file for the last three tax years ASAP to claim any potential refunds before they expire!

I went through almost the exact same situation with my uncle two years ago - 7 years of unfiled returns, all self-employment handyman work, zero documentation. Here's what I learned that might help: First, don't let him ignore this any longer. The IRS has been cracking down on unfiled returns, and at 64, this could seriously impact his Social Security credits. Self-employment tax contributes to his SS benefits, so those missing years might be costing him money in retirement. We started by gathering every bank statement we could find and used a simple spreadsheet to track deposits that looked like business income. Then we estimated his expenses - vehicle mileage, tools, supplies, etc. Even rough estimates are better than nothing, and the IRS expects some reconstruction for older years. The key thing that saved us was filing voluntarily before the IRS contacted him. When you come to them proactively, they're much more willing to work with you on payment plans and penalty reductions. We ended up owing about $8,000 total for all years, but got it reduced to $3,500 through the Fresh Start program. Start with the most recent 3 years first since those have refund potential, then work backwards. And definitely hire a tax pro who specializes in unfiled returns - it's worth every penny for the peace of mind and expertise.

Has anyone done this this year? I'm afraid of getting hit with some penalty if I file for stimulus money this late... is there a deadline to claim these payments?

I'm in a similar situation - never received my third stimulus payment and have been putting off dealing with it because the whole process seemed overwhelming. After reading through everyone's experiences here, it sounds like filing the 1040-X amendment is definitely doable without paying a tax service. Quick question for those who have successfully done this: Do you need any special documentation to prove you never received the payment? I checked the IRS "Get My Payment" tool back in 2021 and it always said "Payment Status Not Available" but I don't have any screenshots or records of that. Will the IRS cross-reference their payment records automatically when they process the amendment, or do I need to provide some kind of proof that I never got it? Also, for anyone still on the fence about this - the deadline for amending 2021 returns (third stimulus) is April 15, 2025, so there's still time but probably better to get it done sooner rather than later given how long the IRS is taking to process amendments right now.