Has anyone considered that this might actually impact your state taxes too? When I had a similar situation, I had to file amended returns for both federal AND state because the additional income changed my state tax liability as well.

I went through this exact situation two years ago with a forgotten 1099-INT from my I-Bonds. Here's what I learned from experience: First, don't panic - this is incredibly common and the IRS deals with it all the time. Since your federal return is already accepted, you have two main options: 1. File Form 1040-X (amended return) proactively - this shows good faith and you can potentially avoid penalties 2. Wait for the IRS to catch it and send you a CP2000 notice I chose option 1 and filed the amendment about 6 weeks after receiving my original refund. The process was straightforward - just report the additional income on the 1040-X and pay the extra tax owed. Since it was my first time making this mistake and the amount was relatively small, I was able to request first-time penalty abatement and only paid the additional tax plus minimal interest. One thing to definitely check: if your state taxes income, you'll likely need to file a state amendment too once your federal amendment is processed. Don't forget that part! The whole thing ended up being much less stressful than I initially thought. The IRS processed my amendment without any issues and I didn't face any additional scrutiny on future returns.

Has anyone dealt with a situation where they made extra escrow payments? My mortgage company said my escrow was short last year so I had to make additional payments that weren't part of my regular mortgage payment. Are those extra escrow payments deductible anywhere?

Great question! I went through this exact same confusion when I bought my first home two years ago. The key thing to understand is that your escrow balance of $4650 is just money sitting in an account - it's not a deduction until those funds are actually used to pay property taxes to your local government. Since your 1098 shows $0 for real estate taxes paid, it means your mortgage servicer didn't actually pay any property taxes from your escrow account during the 2024 tax year. This could happen if you bought the house late in the year and the tax payments haven't come due yet, or if the previous owner had already paid the annual taxes before closing. However, don't give up! Check these things: 1. Your closing documents - you may have reimbursed the seller for prepaid property taxes 2. Your monthly mortgage statements - sometimes lenders make mistakes on the 1098 3. Contact your mortgage servicer to verify what taxes were actually paid For the first-time homebuyer credit question - unfortunately the federal credit expired years ago, but definitely check if your state offers any programs. Some states still have credits or deductions available for first-time buyers. The most important thing is to only deduct taxes that were actually paid to the taxing authority during 2024, not money just sitting in escrow waiting to be paid out.

I was charged $580 last year for something similar, but my situation included rental property, multiple state filings, and cryptocurrency transactions. For just a Schedule C with a few 1099s, that's much steeper than what I'd expect compared to other tax scenarios I've encountered. My sister-in-law has a nearly identical tax situation to yours and pays around $350 in the Midwest. Even accounting for potential regional differences, $626 seems about $200 too high unless there are complicating factors you haven't mentioned.

I'd definitely get a second opinion on that pricing. I'm an EA and typically charge $385-425 for a 1040 with Schedule C and multiple 1099-NECs, depending on complexity. The $626 quote seems high unless there are additional factors like depreciation calculations, complex inventory accounting, or multi-state issues. A few questions that might affect pricing: Do you have significant business asset purchases requiring depreciation? Any employee-related forms like 941s? Home office deduction calculations? These can add time and complexity. But for straightforward freelance/contractor income with basic business expenses, you should be looking at $350-450 range max. I'd recommend calling 2-3 other preparers for quotes - most will give you a ballpark over the phone once you describe your situation.

Anyone know if there's a de minimis exception for small gifts throughout the year from the same foreign person? My parents send me like $500-$1000 every month from their accounts in Korea for help with my kids' expenses, and it'll add up to more than $100k for the year. Do I seriously need to file this special form for what's basically just family support?

I'm dealing with a similar situation and wanted to share what I learned from my research. Carmen, you definitely need to file Form 3520 since you received $130,000 from foreign persons (your parents) in 2024. The $100,000 threshold applies to the total amount received from ALL foreign persons combined in a single tax year. A few important points to keep in mind: - Form 3520 is due by April 15, 2025 (same as your tax return deadline) - It must be mailed separately - you cannot e-file it with your regular return - The penalties for not filing are severe (starting at $10,000), so definitely don't skip this - While you need to report the gift, you won't owe income tax on it since gifts from foreign individuals are generally not taxable to the recipient I'd recommend getting professional help with this form if you're unsure about any details, especially since the penalties are so high. Better to spend money on proper preparation than face potential penalties later!

Anybody know if this same rule applies to other rental expenses too? Like if I buy cleaning supplies that I use at both properties, do I need to split that cost too?

Great question! I actually had a similar situation last year with two rental units in the same building complex. After consulting with my CPA, I learned that the correct approach is definitely to split the mileage proportionally - not claim the full amount for each property. Here's what I do now: I keep a simple spreadsheet where I log each trip with the total miles, then note what percentage of time/work was spent at each property. For your example, if you spent equal time at both units, you'd allocate 7 miles to each property on their respective Schedule E forms. The IRS views this as one business trip that served multiple properties, so the expense should be divided accordingly. Claiming 14 miles on both would indeed be double-dipping and could raise red flags during an audit. I've found that being conservative and well-documented with these allocations has saved me headaches down the road. One tip: I also photograph my odometer readings and keep brief notes about what work I did at each property. Makes tax time much smoother!