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I completed a voluntary disclosure in Pennsylvania last year. I did it myself without a CPA or lawyer, but I'm not sure I'd recommend that approach to everyone. The process took about 4 months from start to finish. They required me to provide: - Explanation letter detailing why I hadn't filed previously - Completed tax returns for the lookback period (3 years) - Profit and loss statements for my business - Calculation worksheet showing how I determined the tax, interest, and penalties I didn't send a check with my initial application - that came later after we agreed on the final amount. The state actually adjusted my calculations slightly before accepting my offer.
Did you do the anonymous inquiry first or did you just identify yourself from the beginning? I'm worried about revealing my info if they might reject me.
I went straight to identifying myself, which was probably my biggest mistake. If I could do it over, I would have either used a representative for an anonymous inquiry or at least called anonymously to discuss my situation before revealing my identity. The state was reasonable in my case, but I've heard stories where the disclosure was rejected and then the taxpayer was fully exposed. So approaching it anonymously first is definitely the safer route if you have any concerns about eligibility.
Just wanted to add that the state actually matters A LOT for voluntary disclosure programs. California's is totally different from like Texas or Florida. What state are you dealing with? That would help us give more specific advice.
Sorry for not mentioning it! I'm dealing with Illinois. Anyone have experience with their program specifically?
Illinois has a pretty straightforward VDA program compared to some states. I went through it about 2 years ago. They required 4 years of back filings, and they were pretty reasonable about accepting my calculations as long as I showed my methodology. The key with Illinois is to be extremely clear about why you failed to file previously - they want to see that it wasn't intentional tax avoidance. They also responded much more quickly than I expected - the whole process took about 10 weeks from submission to acceptance.
Don't forget you can also use Form 4852 (Substitute for W-2) if you absolutely cannot get your W-2s in time! You'll need to estimate your income and withholding based on paystubs or other records. I had to do this one year when a small startup I worked for went under suddenly.
Does using Form 4852 cause any red flags with the IRS? I'm always paranoid about doing anything unusual on my taxes that might trigger an audit.
Using Form 4852 by itself doesn't automatically trigger an audit or create red flags. It's an officially recognized form specifically created for situations like this. However, it's important to be as accurate as possible with your estimates to avoid discrepancies. The key is documenting how you arrived at your figures - keep copies of your paystubs or any other records you used to calculate the amounts. If your employer eventually provides a W-2 that differs significantly from your estimates, you should file an amended return. The IRS understands that you're doing your best with the information available to you when your employer fails to fulfill their legal obligation.
Late to this thread but if ur still looking for those W2s u should try checking the IRS website directly. The IRS actually gets copies of W2s from employers and sometimes u can access them through the "Get Transcript" feature on irs.gov if your employer actually submitted them to the IRS. Saved me last year when my W2 got lost in the mail!!
Just be aware the Get Transcript feature on irs.gov won't have your W-2 info until several weeks after employers submit them to the IRS. And if your employer is generally disorganized enough to not send your W-2 to you, they may not have submitted it to the IRS either.
Just wanted to add that I had this EXACT problem 2 years ago. The key thing to remember is that the IRS and Social Security Administration are separate systems that talk to each other but not in real time. When you file taxes, they check your name/SSN combo against what the SSA has RIGHT NOW. So if your name change isn't fully processed in the SSA system yet (which it doesn't sound like it is), then you need to use your maiden name. Next year will be different - you'll use your married name once you have that new social security card. Don't worry though, the IRS understands people get married and change names all the time!
Do you know if this applies to divorce name changes too? I'm going back to my maiden name after divorce but haven't updated my SS card yet. Should I file with my married name still since that's what's on my current card?
Yes, the same principle applies to divorce situations too. You should always file with whatever name is currently in the Social Security system, which would be your married name until you complete the name change process with the SSA. Even if you've started the process to change back to your maiden name, until it's fully processed and you receive your new card, the SSA database still has your married name. Filing with anything else will cause a rejection.
Quick tip from someone who processes tax returns for a living - if your return got rejected due to a name/SSN mismatch but you already e-filed, you have two options: 1. Correct the name on your return to match what's in the SSA system (your maiden name) and e-file again 2. Print and mail a paper return with your maiden name If you go with option 1, make sure EVERYTHING matches what's on your social security card - even middle initials and suffixes matter. If your SSN card says "Jane A. Smith" don't put "Jane Ann Smith" on your tax return. Option 2 takes longer to process (like 6-8 weeks longer) but sometimes it's necessary if e-filing keeps giving you problems. Just make sure to sign and date the paper return!
Just a heads up from someone who went through this last year - back taxes have to be mailed in paper form! I tried to e-file my 2021 and 2022 returns through TurboTax in January and kept getting errors. Turns out once the e-file deadline has passed for a tax year, you can only submit paper returns. Also, send them via certified mail so you have proof the IRS received them! I learned this the hard way when one of my returns got "lost" and I had no way to prove I had sent it.
How long did it take to get your refund after mailing in the paper returns? And did you mail them all together or separately?
It took about 12 weeks to get my refund after mailing in the paper returns. That's much longer than the typical 21 days for e-filing, but expected for paper returns. The IRS is still working through backlogs. I mailed each tax year in separate envelopes to different processing centers. The IRS has different mailing addresses depending on your state and the tax year, so definitely check the IRS website for the correct address for each return. Don't bundle them together - each year needs to go to the specific processing center for that tax year.
Don't forget that if you're owed a refund, you only have 3 years to claim it! So for your 2021 taxes, you'd need to file by April 15, 2025 or you lose that refund forever. If you OWE money instead, there's no time limit for the IRS to collect, but penalties and interest keep accruing the longer you wait to file. I back filed 4 years of taxes in 2023 and the process wasn't as bad as I expected!
What software did you use for your back filing? I'm trying to figure out the most affordable option since I have to do multiple years.
Malik Thomas
Going back to your original question about your CPA - I'd recommend interviewing a few other accountants before tax season starts. I've found that some CPAs get complacent with long-term clients or are just too overworked to give proper attention. When I switched to a new CPA two years ago, she found nearly $4k in tax savings my previous guy had missed over the years. One tip: ask potential CPAs specific questions about your situation (self-employment tax, home office, medical expenses) and see how detailed their answers are. The good ones will take time to explain rather than dismissing your questions.
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QuantumQuasar
•Thank you for this advice. I've been hesitant to "break up" with my CPA because we have history, but you're right that I should at least talk to other professionals. Do you have any suggestions for the best time to interview new CPAs? I'm guessing they're all super busy during actual tax season.
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Malik Thomas
•November to early December is the ideal time to interview new CPAs. Most have wrapped up extension filings from the previous season but haven't yet been swamped with year-end planning and new tax season work. They'll have more time to thoroughly review your situation and answer questions. October can also work, but by January they're starting to get busy, and by February they're usually not taking new clients until after April 15th. If you wait until actual tax season, you'll likely end up with whoever has availability, not necessarily the best fit for your needs.
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Isabella Oliveira
Has your CPA explained WHY they don't think you need to make quarterly payments? There are some exceptions. For instance, if your withholding from your W-2 job covers at least 90% of your total tax liability or 100% of your previous year's tax (110% if your AGI was over $150k), you might be exempt from making estimated payments despite the self-employment income.
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Ravi Kapoor
•This is really important! My wife and I had a similar situation, but our CPA had us increase our W-2 withholding instead of making quarterly payments. It accomplished the same thing (meeting our tax obligations) but with less paperwork. Worth asking if that's what your CPA was thinking.
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