Does that 4-year rule apply to employees or just to employers? Like, do I as a regular employee need to keep my W-2s for 4 years, or is that just for businesses?

The 4-year retention rule for employment tax records applies primarily to employers who need to maintain payroll records, tax forms, etc. However, as an employee, it's still wise to keep your W-2s for at least 4 years too because they're essential for verifying your Social Security contributions and earnings history. If there's ever a discrepancy in your Social Security earnings record (which can happen), having those W-2s can be crucial evidence. The Social Security Administration can make corrections to your earnings record beyond the typical IRS audit period, so having documentation for longer than 3 years can be important for your future benefits.

Do you have a recommendation for a good shredder brand? Mine keeps jamming every time I try to do more than 2-3 pages.

That's really helpful to know about your audit experience. Did they give you a hard time about the missing receipts initially? How long did the whole audit process take from start to finish?

They definitely asked for the receipts first and I had a moment of panic when I couldn't produce many of them. But when I showed my expense tracking spreadsheet along with the corresponding bank statements, they were pretty reasonable about it. They focused way more attention on verifying my larger deductions like my home office and some camera equipment I bought for my online business. The whole process took about three and a half months from the initial letter to resolution. It was stressful but not nearly as bad as I expected. The key was being organized with the records I did have and being able to explain my business purpose for each category of expense.

I'm doing online tutoring! I use the notebooks and folders to organize materials for different students, printer paper/ink for worksheets, and pens/markers for creating visual aids. So everything is pretty directly tied to my actual work activities.

This is so true! I'm a freelance designer and my art supplies are obviously business expenses, but when I tried deducting general office stuff like a stapler and paper clips, my tax guy said those are harder to justify without good documentation.

Thanks for breaking it down like this! I definitely don't have rental properties or a complex business - just regular W-2 income and some stocks. This makes me feel much better about trying it myself. Do you have a preferred tax software you'd recommend?

I've used both TurboTax and H&R Block over the years. TurboTax has a slightly better interface and is more user-friendly for beginners, but it's also more expensive. H&R Block is cheaper and gets the job done just as well once you get used to it. If your situation is relatively straightforward, I'd also look at FreeTaxUSA - it's much cheaper than the big names and handles all the basics plus investments really well. TaxSlayer is another good budget option. All of these will walk you through everything step-by-step, so you really can't mess it up too badly.

This isn't really accurate advice. Your experience sounds like you might have made mistakes in your self-filing, but that doesn't mean everyone will. I make over $100k and have been self-filing for years with no issues. Tax software is designed to find deductions through its questionnaire process.

Thank you all for the responses! I went back and checked my filed return, and I did correctly report that I had health insurance coverage for all 12 months last year. So it sounds like I don't need to do anything with these 1095-B and 1095-C forms other than keep them with my records?

That's exactly right! Just keep them with your other tax documents in case of an audit, but there's no need to amend your return if you correctly reported your coverage status. The 1095-B and 1095-C are basically just verification documents - they don't directly affect your tax calculation like income forms do.

This is so true! I filed an amended return last year and the "Where's My Amended Return" tool just showed "processing" for 9 months straight. The IRS is completely overloaded.

Wait, so if I have to report foreign accounts on Schedule B of my tax return, that part isn't extended automatically with the FBAR extension? That's confusing since they're related. Can you clarify what forms need separate extension requests?

That's right - they're definitely related but handled by different agencies. The FBAR (FinCEN Form 114) goes to FinCEN, not the IRS, which is why it has its own separate deadline and extension rules. Your tax return (1040 and all schedules including Schedule B where you check the box about foreign accounts) goes to the IRS and follows regular tax return deadlines. So you need Form 4868 to extend your tax return filing. Also, Form 8938 (Statement of Foreign Financial Assets) if required, goes with your tax return and would be covered by the Form 4868 extension, not the automatic FBAR extension.

Thanks for bringing this up! Does anyone know if they still require 6 years of back FBARs for the Streamlined program? And do you need to amend all your tax returns too, or just file the missing FBARs?