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One thing nobody mentioned - check your last paystub of the year and compare the YTD 401k contribution total with what's on your W-2 in Box 12 with code D. They should match. If not, your employer might have made an error. My company somehow transposed numbers in my 401k contribution amount one year and it caused a huge headache at tax time. Better to catch it early!
Is there a deadline for when employers have to fix W-2 errors? My company is notoriously slow with correcting payroll issues and I'm worried if something's wrong with my 401k reporting, they'll take forever to fix it.
Employers are supposed to issue corrected W-2s (W-2c) as soon as they discover errors, but there's no strict deadline specifically for corrections. However, if you find an error, report it to your employer immediately - they should issue a W-2c within a reasonable time. If your company drags their feet, you can actually report the discrepancy directly on your tax return. The IRS has Form 4852 (Substitute for W-2) where you can report what you believe are the correct numbers based on your pay stubs if your employer won't fix their mistake in a timely manner.
For anyone wondering, the 401k contribution limit for 2025 is $24,000 (or $30,000 if you're over 50). Make sure you're not exceeding that across all your jobs if you have multiple employers with 401k plans. Your W-2 Box 12 code D amounts from all jobs get combined for this limit.
Does the employer match count toward that limit? I'm putting in about $20k myself but with my employer's 6% match it would go over $24k.
One thing nobody's mentioned yet - make sure you keep documentation about your mom living there all these years. The IRS might question why you're selling a property that wasn't your primary residence but also wasn't a rental property. Utility bills in her name, mail addressed to her at that address, her driver's license showing that address, etc. would all help establish that she was the actual resident even though you were the owner. You should definitely keep these records with your tax documents.
Would this documentation help reduce any tax liability though? Or is it just to explain the unusual situation if questioned?
It's primarily to explain the unusual situation if questioned during an audit. The documentation itself won't reduce your tax liability, as the property will still be treated as a non-primary residence for capital gains purposes. However, having this documentation ready could prevent potential complications if the IRS questions why you owned a property that wasn't your primary residence but also wasn't generating rental income. Without proper explanation, they might incorrectly assume it was an unreported rental property, which could trigger a more extensive audit.
Don't forget to check if your state has any different rules about this kind of property sale! Federal is one thing but some states have their own wrinkles. In NY where I am, there were additional forms needed for non-primary residence sales that my accountant almost missed.
Good point! In California we have totally different rules for property tax reassessments when property transfers between family members. The fed and state systems barely talk to each other.
Former tax preparer here - a tip most people don't know: if you filed through ANY paid tax preparation service (H&R Block, Jackson Hewitt, local CPA, etc.), they are required by law to keep copies of your returns for at least 3 years. Call the office where you filed, and they can print you a complete copy, usually for a small fee (typically $25-50). This is often faster than going through the IRS, especially during busy periods. Just bring ID when you pick it up since it's sensitive information.
I appreciate the tip! Unfortunately I used TurboTax and did it myself online, but I'm still trying to figure out their system to download old returns. Their website navigation is not very intuitive. Do you know if online services like TurboTax have the same 3-year retention policy?
Online services like TurboTax typically store your returns for even longer than 3 years - many keep them for 7+ years. The challenge is usually navigating their interface to find them. For TurboTax specifically, after logging in, click on your name in the top right corner, then "Tax Returns & Documents." From that screen, you should see all your past returns with a "Download/Print PDF" option. If you're still having trouble, their customer support can guide you through it - they're pretty responsive if you use their chat feature.
If you're really in a pinch, call the Spanish university's international student office directly. I had a similar issue with a UK university, and when I explained the situation, they were willing to accept alternative documentation (my W-2 forms combined with the transcript). Sometimes they just need to verify your income/employment and can be flexible about the exact format. Worth a try before you go through all the hassle with the IRS!
Just to add a practical tip - when you mail in a return with zero income that's only claiming the recovery rebate credit, write "RECOVERY REBATE CREDIT ONLY" in big letters at the top of the first page of the 1040. This helps the IRS route it properly and can speed up processing. Also, use certified mail with tracking so you can prove when it was sent and received. The IRS is still dealing with massive backlogs, and these paper returns sometimes get lost in the shuffle.
Thanks for this advice! Would regular certified mail be good enough, or should I do certified mail with return receipt? And should my friend expect to wait a long time to get the rebate after filing?
Regular certified mail with tracking is sufficient - you just need proof it was delivered. Return receipt is extra protection but not strictly necessary. Your friend should definitely expect to wait several months for the rebate after filing. Zero-income returns claiming only the recovery rebate credit typically get flagged for manual review, which adds processing time. Current estimates I've seen suggest 3-6 months for these special case paper returns, though it could be shorter or longer depending on the IRS backlog at the time of filing. Make sure your friend keeps a complete copy of everything submitted so they can follow up if needed.
Has anybody had this experience? My sister filed a return like this last year just to claim her missing stimulus, and she got a letter from the IRS asking for ID verification before they would process it. She had to upload her ID through the IRS website and answer some questions to prove her identity.
Eduardo Silva
5 Don't forget to track EVERYTHING for your content creation. I'm a tax preparer who works with several influencers, and the biggest mistake I see is not keeping good records. Even if it seems small, document all income and expenses. Use a separate credit card for business purchases if possible, and take photos of receipts. For your level of income, you don't need a formal business structure - a Schedule C is fine. But good record-keeping will save you tons of headaches at tax time and protect you if you're ever audited.
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Eduardo Silva
ā¢9 Do you recommend any specific apps for tracking expenses? I always lose my receipts and then panic at tax time trying to piece everything together from bank statements.
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Eduardo Silva
ā¢5 I usually recommend QuickBooks Self-Employed for content creators as it lets you categorize transactions easily and tracks mileage automatically if you travel for content. It also helps separate business from personal expenses. For a simpler option, many of my clients use free apps like Everlance or just a dedicated spreadsheet with photos of receipts stored in Google Drive. The key is consistency - pick a system you'll actually use and stick with it all year rather than scrambling at tax time.
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Eduardo Silva
17 Just a heads up - since you made less than $5,000, you don't need to worry about quarterly estimated tax payments yet. I made that mistake my first year and paid penalties. But definitely report the income on Schedule C! You can deduct things like equipment, software, courses to improve your content, portion of internet/phone used for business, etc. Keep all your receipts and maybe track the % of time you use devices for content vs personal use. The self-employment tax hits hard if you're not prepared for it.
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Eduardo Silva
ā¢14 This isn't entirely accurate. The requirement for quarterly estimated taxes isn't based on a specific income threshold but whether you'll owe $1,000+ at tax time. Even with $3-4K in side income, you could potentially hit that depending on your overall tax situation.
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