This is exactly the kind of situation that can cause a lot of stress, but you're handling it the right way! I've dealt with similar K-1 corrections before and can confirm what others have said - for SSN-only corrections, you typically don't need the full 1065X process. One thing I'd add that hasn't been mentioned much: make sure to double-check ALL the other K-1s in your return while you're at it. I've found that when I make one data entry error like this, there's sometimes others lurking that I missed. Better to catch them all now rather than having to do multiple corrections later. Also, since you mentioned this is stressing you out - completely understandable! But this is actually one of the easier tax corrections to handle. The IRS deals with SSN corrections all the time, and as long as you're proactive about it (which you are), it should resolve smoothly. Your partner will appreciate you catching and fixing this quickly.

I went through this exact situation about 6 months ago with our LLC that's taxed as a partnership. You're absolutely right that you don't need to file a 1065X for just an SSN correction - that would be overkill for this type of error. Here's what worked perfectly for me: I created a new K-1 with the correct SSN, wrote "CORRECTED" in red ink at the top, and included a simple one-page letter explaining that only the SSN was incorrect and no dollar amounts were changed. I referenced our EIN and the tax year, then sent everything via certified mail to the same IRS processing center. The whole thing was resolved without any issues. My partner never heard anything from the IRS about it, and when I followed up a few months later, everything was properly updated in their system. One tip that really helped: I made sure to give my partner the corrected K-1 immediately so they could reference it if any questions came up on their personal return. Fortunately they hadn't filed yet, so it didn't complicate things on their end. Don't stress too much about this - it's really a straightforward correction and the IRS handles these SSN fixes all the time!

I'm confused by FreeTaxUSA's handling of this. When I tried to create a superseding return, the software only gave me the amended return option. Does anyone know if FreeTaxUSA actually supports filing superseding returns properly? Or do I need to manually handle this somehow?

Thanks for asking this question! I was in a similar boat last month and learned the hard way that there's a big difference. Just to add to what others have said - timing is really crucial here. Since you're still before April 15, you have the choice between superseding (complete replacement) or amending (correction to original). One thing I wish someone had told me: if your changes are significant (like major income additions or big deduction changes), superseding is usually the better route because it treats your situation as if you filed correctly the first time. But if it's just minor corrections, an amendment might be simpler. Also, keep in mind that if you go the superseding route, you'll need to paper file since most tax software doesn't handle the specific markings required for superseding returns. The IRS needs to see "SUPERSEDING RETURN" clearly marked at the top of a new 1040, not a 1040-X form. Have you determined what kind of changes you need to make? That might help decide which path is better for your situation.

I'm dealing with a very similar situation right now! My sister accidentally sent me $200 through PayPal as Goods & Services instead of Friends & Family for splitting a dinner bill. I panicked when I saw those tax notifications and immediately refunded it, but I've been getting the same annoying messages about adding a Tax ID. Reading through all these responses is super helpful - it sounds like I'm worrying about nothing since I refunded the payment and it's way below the $600 threshold anyway. I was especially stressed because I'm self-employed and already have to deal with enough tax complications without adding PayPal confusion to the mix. Thanks everyone for the detailed explanations! It's reassuring to know that PayPal's automated system is just being overly cautious and that the actual tax implications are much simpler than their scary notifications make it seem.

I went through almost the exact same thing a few months ago! My roommate sent me rent money as Goods & Services by mistake, and I had the same panic reaction when PayPal started asking for tax info. I immediately refunded it and switched to Venmo for future transactions. What really helped me understand the situation was realizing that PayPal's system is just following legal requirements - they HAVE to ask for tax information once any G&S transaction occurs, even if it's clearly a mistake. But the actual tax implications are based on IRS rules, not PayPal's internal compliance processes. Since you refunded the payment and you're way below the $600 threshold, you have absolutely nothing to worry about tax-wise. I ended up just ignoring the PayPal notifications (they eventually stopped), and when tax season came around, there was nothing to report. No 1099-K, no complications, no issues with the IRS. The key lesson I learned was to always double-check the payment type before sending or receiving money on PayPal. Now I explicitly tell people "Friends & Family only" when they owe me money to avoid this whole headache in the future!

I went through this exact same situation last year when I moved from California to Nevada! The key thing to remember is that you absolutely cannot modify the W2 yourself - that's considered tax document fraud. What worked for me was calling my employer's payroll department and explaining that the W2 shows the wrong state for where I actually performed work. I had to provide documentation of my move (lease agreement, utility bills) to prove I was a Nevada resident during the tax year. They issued a corrected W2-c within about 10 days. One tip: when you call, don't just say "I moved" - be specific that the STATE shown on the W2 is incorrect for where you physically performed your work duties. That helps them understand it's not just an address change but a tax withholding issue. Since Washington has no state income tax, make sure they didn't withhold any Oregon state tax from your paychecks either - if they did, you'll want that corrected too so you can get a refund from Oregon. The sooner you contact them the better, especially with the filing deadline approaching!

I just went through this exact same issue a few months ago! You definitely cannot change the W2 yourself - that's tampering with a tax document and can get you in serious trouble. You need to contact your employer's payroll department immediately and request a corrected W2 (Form W-2c). Since you moved in December 2023 and worked in Washington all of 2024, the W2 should definitely show Washington as your work state. The good news is that since Washington has no state income tax, you shouldn't have had any state tax withheld from your paychecks - double check your pay stubs to make sure they weren't taking out Oregon state tax all year. When you call payroll, be very specific that this isn't just an address change but that the WORK STATE is wrong on your W2. Have your documentation ready (lease agreement, utility bills) showing you lived and worked in Washington during 2024. Most employers are pretty good about fixing these once they understand the issue. If they drag their feet, you can file Form 4852 (Substitute for Form W-2) with your tax return, but getting the corrected W2 is definitely the cleaner solution. Don't let this delay your filing - start the process with your employer today!

Make sure to keep copies of both the original 401k provider's 1099-R AND documentation from Vanguard showing the rollover was completed. My friend got audited for exactly this situation and having both sets of documents made it super easy to resolve. The IRS just wanted to verify the money actually went into another retirement account.

Just to add some reassurance - I work in retirement plan administration and see this situation all the time. The key thing to remember is that if your 1099-R has distribution code G in box 7, the IRS already knows this was a direct trustee-to-trustee rollover. They're not going to come after you with penalties or anything dramatic. That said, you absolutely should amend to properly report it. The IRS has automated systems that match 1099 forms to tax returns, and eventually they'll send you a notice asking about the missing form. It's much easier to proactively amend than to respond to an IRS notice later. When you amend, you'll report the gross distribution on your 1040 but then show it as a nontaxable rollover, so your tax liability won't change. The amendment is really just about proper reporting compliance. FreeTaxUSA's amendment process is pretty straightforward once you have your refund in hand.