That's a really good point I hadn't considered. I was so focused on the federal tax bill that I didn't even think about how it might have affected state taxes or potential credits I could have qualified for. Do you know if there's a simple way to figure out what credits I might have been eligible for at my actual income level?

For a quick estimate, you can use one of the free tax calculators online - just input your correct income and basic situation for that tax year. The IRS's EITC Assistant can tell you if you would have qualified for the Earned Income Credit, which is often significant for lower/moderate income workers. When you file your amended return (Form 1040-X), your tax professional or software should automatically recalculate your eligibility for all credits and deductions based on your corrected income. Make sure to check for the American Opportunity Credit or Lifetime Learning Credit if you had education expenses, and the Child Tax Credit if you have dependents. These can make a huge difference.

What about requesting your wage and income transcript from the IRS? Wouldn't that show everything that was reported under your SSN for that year? Might help identify if there are other reporting problems too.

Is the bank required by law to pay interest on escrow accounts? My escrow account has thousands in it and I've never seen a 1099-INT attached to my mortgage statement.

It varies by state. Some states have laws requiring mortgage servicers to pay interest on escrow accounts (California, Connecticut, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Oregon, Rhode Island, Utah, Vermont, and Wisconsin). In other states, it's up to the terms of your mortgage agreement. If you live in one of those states and have a significant escrow balance but never received interest, you might want to check with your mortgage servicer. It's possible the interest was so minimal they didn't need to report it (usually under $10), or there could be specific exemptions in your state's laws.

This is good advice. I had a similar situation with Chase last year and the account numbers in Box 3 were different. One was for my savings account and the other was for escrow interest.

Good point! I completely forgot to consider state tax implications. I'm in California - any idea if they allow investment interest deductions similarly to the federal rules?

California generally conforms to federal treatment of investment interest expense deductions. So if you can deduct it on your federal Schedule A, you should be able to deduct it on your California Schedule CA (540), assuming you're itemizing on both returns. Just make sure all your documentation is solid since family transactions get extra scrutiny from both the IRS and the California Franchise Tax Board. The loan should absolutely have a reasonable interest rate and formal payment schedule.

The IRS publishes the Applicable Federal Rates (AFR) monthly, which are the minimum interest rates they consider legitimate for loans. You can Google "IRS AFR rates" to find the current ones. They have different rates for short-term, mid-term, and long-term loans. If you charge less than the AFR, the IRS might consider part of the loan as a gift, which creates a whole different tax situation. For family loans for investments, it's usually safest to use the exact AFR rate or slightly above it.

I hadn't even considered an EA! How did you find one who specializes in tech compensation? That price point sounds much more reasonable than what the CPAs are quoting.

I found mine through the National Association of Enrolled Agents website (naea.org) - they have a directory where you can search by specialty. I filtered for ones who listed "equity compensation" as a specialty. Many EAs who work with tech employees advertise their familiarity with ISOs, RSUs, ESPPs, and startup equity. Some even offer free initial consultations where you can discuss your situation before committing. I'd look for someone who has experience with both rental properties and equity compensation specifically. The sweet spot for your situation is definitely an EA who has tech industry experience but doesn't charge CPA rates.

Does FreeTaxUSA handle multi-state returns well? I have property in one state but live in another like OP.

I used H&R Block for 3 years until I realized I was paying $250 for them to enter information I could do myself. Their software is decent but the in-person preparers vary WILDLY in quality. I had one who was amazing (former accountant) and two who clearly just completed their basic training course. One missed a major education credit I was eligible for until I specifically asked about it.

Thanks for the honest feedback. That's what I was worried about - paying a premium for someone who just plugs numbers into the same software I could use myself. Maybe I'll just upgrade my TaxAct subscription instead of switching to in-person prep.

How did you find your CPA? I've been thinking about switching to one but don't know where to start looking for someone reliable.

I asked other small business owners in my area for recommendations. Personal referrals are usually the best way to find a good CPA. Another good approach is to check with your state's CPA association - they often have directories of members organized by specialty. I interviewed three before choosing mine, asking about their experience with rental properties and small business taxes specifically.