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Quick question - does anyone know if the IRS is more likely to audit you if you've been audited before? I got audited three years ago (also for crypto) and I'm wondering if I'm now on some kind of high-risk list.
There's no official "audit again" list, but previous audits are part of your tax history that the IRS can see. If your previous audit resulted in significant changes to your return, that could potentially increase your risk profile for a few years. However, if the previous audit found everything in order or only minor issues, it shouldn't substantially increase your future audit risk. The best protection is just keeping good records and reporting everything accurately.
Based on my experience dealing with crypto taxes, paper filing definitely won't help you avoid an audit and might actually hurt your chances. The IRS has sophisticated scanning technology that digitizes paper returns anyway, so all your transaction data ends up in their computer systems regardless. What really matters for audit risk is accuracy and consistency in your reporting. With 1000 crypto transactions, the key is making sure your reported gains/losses match what the exchanges have reported to the IRS. Many exchanges now send 1099 forms directly to the IRS, so any discrepancies between what you report and what they've already told the IRS about your activity will be flagged automatically. Your best bet is to e-file for faster processing and focus on having bulletproof documentation for every single transaction. Keep records of all trades, transfers, fees, and cost basis calculations. That's what will protect you if you do get selected for audit, not the filing method.
This is really helpful advice, thank you! I'm curious about the exchange reporting you mentioned - do all the major exchanges send 1099s now? I've been trading on Coinbase, Kraken, and Binance.US and I'm wondering if the IRS already has records of all my activity from these platforms. If they do, then yeah, accuracy in matching their reports seems way more important than trying to hide behind paper filing.
I messed up last year and filed the wrong form for my cousin with TPS. We used 1040NR instead of 1040 even though he met the substantial presence test. Will he get in trouble for this? Should we file an amended return?
Thanks for the advice. I think we'll go ahead with the amended return. He definitely couldn't claim some credits he should have been eligible for. Do you know how far back we can amend? He's actually been on TPS for almost 3 years but has been filing nonresident returns the whole time.
You can generally amend returns for up to 3 years from the original filing date (or 2 years from when you paid the tax, whichever is later). So if your cousin has been filing incorrectly for 3 years, you should be able to amend at least the last 2-3 years depending on when exactly he filed each return. Given that he's been on TPS for 3 years and likely met the substantial presence test for most of that time, amending multiple years could result in significant refunds if he missed out on credits like the Earned Income Tax Credit, Child Tax Credit, or education credits that nonresidents can't claim. I'd recommend starting with the most recent year first to see how much difference it makes, then decide whether it's worth amending the earlier years. The process can be time-consuming, but if there are substantial refunds involved, it's definitely worth it.
This is such valuable information for anyone with TPS status! I went through a similar situation last year and can confirm that meeting the Substantial Presence Test is indeed the key factor for filing as a resident alien, regardless of your specific immigration status. One additional tip for your colleague: when using online tax software, they should look for the question about "How long have you been a U.S. resident for tax purposes?" rather than getting confused by immigration status questions. Most software will guide them to resident alien filing if they indicate they've been in the U.S. for the required time period. Also, it's worth noting that as a resident alien, they'll be able to claim the standard deduction and potentially qualify for refundable credits like the Earned Income Tax Credit if their income qualifies. This is often much more beneficial than the limited deductions available to nonresident aliens. The transition from F1 to TPS actually works in their favor here since F1 students have that 5-year exemption from the substantial presence test, but TPS holders don't have any such exemption - so the test applies normally and they can file as residents once they meet it.
This is exactly the kind of comprehensive information I was hoping to find! Thank you for breaking down the software question approach - that's really helpful. I was wondering about the standard deduction eligibility too, so it's great to hear that confirmed. Quick follow-up question: when the software asks about "How long have you been a U.S. resident for tax purposes?" should my colleague count from when they first arrived in the US (on the F1 visa) or from when their TPS was approved? I want to make sure they answer that question correctly since it sounds like it's a key determining factor for the software's guidance.
Anyone have experience with claiming professional development stuff? I took some online courses to learn new design software and wondering if I can deduct those?
Absolutely! I deducted several Udemy and LinkedIn Learning courses last year for my business. If the skills directly relate to your current business, they're deductible as ordinary business expenses. Keep the receipts and course descriptions that show how they relate to your work.
Great question! As someone who's been self-employed for 5 years, I've learned the hard way about keeping meticulous records. Here are the key deductions you should definitely be tracking: **Home Office**: Since you work from home 75% of the time, measure your dedicated workspace and calculate the percentage of your home it represents. You can deduct that percentage of rent, utilities, renters/homeowners insurance, and maintenance costs. The space must be used exclusively for business though. **Equipment & Software**: All your graphic design software subscriptions (Adobe Creative Suite, etc.), computer equipment, monitors, tablets, cameras - fully deductible if used primarily for business. **Internet & Phone**: You can deduct the business portion of your internet and phone bills. Since you work from home 75% of the time, that's a reasonable percentage to claim. **Professional Development**: Courses, workshops, conferences, books, and subscriptions related to graphic design are all deductible. **Marketing & Networking**: Website hosting, business cards, portfolio printing, networking event fees, client entertainment (50% deductible). The key is documentation - keep every receipt and maintain a simple spreadsheet throughout the year. I also recommend setting aside about 25-30% of your income for taxes since you're self-employed. Better to overpay quarterly than get hit with a big bill in April!
Make sure you're also considering the state tax implications! I did something similar with my boat and found out my state had different reporting requirements than federal. Also check if you properly transferred the title - in some states, if the title is still in your name and your friend gets in an accident, you could be liable!
That's a really good point about the title transfer. I heard about someone who "sold" their car but never properly transferred the title, and then the "buyer" racked up thousands in toll violations that came back to the original owner. Does a loan agreement with the car as collateral change who's legally responsible?
The loan agreement doesn't change the liability aspect - proper title transfer is what matters for legal responsibility of the vehicle. Even if you have a loan agreement, if the car is still titled in your name, you remain the legal owner in the eyes of the DMV and potentially liable for accidents, violations, etc. What matters is what the DMV records show, not what your private loan agreement says. The title should be transferred to your friend's name, and then you can place a lien on the title based on your loan agreement. This protects you from liability while still securing your interest in the vehicle until the loan is paid off.
Has anyone considered that the IRS might view this as a gift if the loan terms are too favorable? Interest-free loans between friends can sometimes be seen as having "imputed interest" if they're below market rates. Just something to consider.
Ivanna St. Pierre
Filed mine Feb 5th and already got it! Maybe check if you have any errors?
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Butch Sledgehammer
β’how tf did u get yours already when u filed after me π€
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Ivanna St. Pierre
β’idk man just lucky I guess π€·ββοΈ
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Zara Ahmed
Filed Jan 28th here in Detroit and still waiting too! The processing delays are so frustrating this year. At least it's good to know I'm not the only one still stuck in limbo. Hopefully we'll all see some movement soon π€
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