Has anyone tried just asking your employer for a simple letter stating how much you earned? I did this once when my employer "forgot" to send a 1099. I still reported the income correctly, attached the letter as documentation, and never had any issues. Sometimes a simple solution works best!

This is exactly why I keep meticulous records of all my side work - bank deposits, payment app screenshots, even text messages about payment amounts. Your employer is definitely breaking the law by not issuing a 1099 for $2,700, but that doesn't get you off the hook for reporting it. I'd suggest gathering whatever documentation you do have (bank statements showing deposits, any written communication about payments, etc.) and reporting the income on Schedule C. The IRS actually prefers when taxpayers are proactive about reporting income, even without official forms. You might also want to file Form SS-8 to get an official determination of whether you were actually an employee (in which case they should have been withholding taxes) or truly an independent contractor. Don't let your anxiety paralyze you - unreported income is way riskier than reporting income without perfect documentation. The IRS has gotten much better at tracking electronic payments in recent years, so there's a good chance they already know about this income anyway.

Has anyone used H&R Block's Peace of Mind Extended Service? It's their audit protection product. I'm curious if it's any better than TurboTax's version for someone with multiple income sources but nothing international.

I've been dealing with similar complexity in my returns for the past few years, including foreign accounts and investment income. After going through a correspondence audit in 2022 (thankfully not a full audit), I can share what I learned about audit protection services. First, definitely get protection if your returns are this complex. The peace of mind alone is worth it. I ended up going with a standalone policy through a company that specializes in international tax issues rather than the basic protection from tax software companies. Cost me about $400/year, but it covers representation for all types of audits and includes some penalty protection. One thing I wish I'd known earlier: some protection plans have waiting periods, so you can't buy coverage after you've already been selected for audit. Also, make sure whatever service you choose has experience with FBAR issues specifically - the penalties for those can be brutal and not all tax professionals are familiar with the nuances. The preventive approach mentioned with taxr.ai sounds interesting too. Catching issues before filing seems smarter than just hoping you don't get audited. Given your situation with foreign accounts and multiple income sources, I'd probably recommend both - prevention analysis before filing AND audit protection for peace of mind.

Does anyone know if a 1098-C form impacts your ability to claim the standard deduction for your state taxes if state and federal filing statuses have to match? I'm in California and always confused about how federal choices affect my state return.

Just wanted to add my experience since I was in almost exactly the same situation last year! I donated a 2015 Honda Civic that was worth about $3,000 and got a 1098-C form. I was also unsure about itemizing vs standard deduction. The key thing I learned is that there's absolutely zero downside to accepting the 1098-C form. I ended up taking the standard deduction because my total itemized deductions were only about $11,500 (well below the $13,850 standard). The 1098-C just sits in my tax files and doesn't affect anything. One tip though - make sure you keep good records of how you determined the car's value (like KBB screenshots, recent repair estimates, etc.) just in case. Even if you don't use the deduction this year, having proper documentation could be helpful if your situation changes or if you ever need to reference the donation for other purposes. The charity should handle all the reporting requirements on their end, so you really don't need to worry about any complications from accepting the form!

Wait im confused. What if i have to pay for parking at different client sites? Im a w2 employee but i travel to different locations for my job during the day?

Your coworker is likely making a mistake that could get him in trouble with the IRS. As others have confirmed, W-2 employees cannot deduct parking expenses at their regular workplace - this has been the case since the 2017 Tax Cuts and Jobs Act eliminated unreimbursed employee expense deductions. I'd suggest having a friendly conversation with your coworker about this. He might be confusing old tax rules (pre-2018), or maybe he has some 1099 income on the side that he's legitimately deducting parking for. Either way, if he's deducting regular commuting parking as a W-2 employee, he's setting himself up for potential issues if audited. Your best bet is to ask your employer about pre-tax commuter benefits if they offer them - that's the only legitimate way for W-2 employees to get tax savings on parking expenses. Don't risk taking deductions you're not entitled to!

Thank you all for sharing your experiences! This has been incredibly helpful. I'm feeling much more confident now about my situation. Based on what everyone has shared, it sounds like the 570/971 combination is pretty common and usually resolves within a few weeks. I checked my transcript again and noticed that both codes do share the same cycle date (20250221), which based on Mateo's explanation suggests it's likely just a verification process. The home improvement credits I claimed were for energy-efficient windows and insulation, so that could definitely be what triggered the review. I think I'll wait for the actual notice from the 971 code before taking any action, but it's reassuring to know that most people here had positive outcomes. Really appreciate this community - you've all saved me from spending hours on hold with the IRS! 🙏

As someone who just went through this exact scenario last month, I can confirm that the energy efficiency credits are definitely a common trigger for the 570/971 combo. I claimed the residential clean energy credit for solar panels and got the same codes with matching cycle dates. The key thing that helped me was keeping detailed records of all my expenses and receipts. When I got the notice (which took about 10 days to arrive), they just wanted me to verify the amounts I claimed and provide documentation. I uploaded everything through their secure portal and the 570 hold was released within 8 business days. One tip that saved me time: organize all your home improvement receipts and invoices now while you're waiting for the notice. That way you can respond immediately when it arrives. The IRS usually gives you 30 days to respond, but the sooner you provide what they need, the faster your refund gets processed. Your cycle dates matching is definitely a good sign - it means they flagged it for review right when they processed your return, rather than it sitting somewhere for weeks before anyone looked at it.