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Does anyone know if there's a way to check if the IRS already knows about the unemployment income? Like is there some online account where I can see what income has been reported under my SSN? I'm in a similar situation where I forgot to include my unemployment.
Yes! Create an account on irs.gov and access your "Tax Records". There's a section called "Wage & Income Transcript" that shows all income reported to the IRS under your SSN including W-2s, 1099s, etc. If your unemployment 1099-G is showing up there, then yes, the IRS knows about it. That's also why they'll eventually catch the discrepancy - they have the info but will take time to match it against what you reported. Way better to fix it yourself before they send a notice.
Thanks for this info! I just checked my transcript and yep, there it is - my 1099-G from unemployment is definitely showing up. Guess I better get that amendment filed asap before they come after me.
Don't stress too much. I forgot unemployment on my 2022 taxes and the IRS just sent me a letter like 8 months later saying "we think you owe this amount" and they calculated it all for me. I just had to pay what they said plus a small interest charge. Wasn't a big deal tbh.
Yeah but waiting for them to catch it means you'll definitely pay interest on what you owe. The interest starts accruing from the original due date. If you amend now you still pay interest but for a shorter time period = less money.
Former tax preparer here. One thing to consider is that if your parents have been going to the same person for years, that preparer might actually know important details about their financial history that could be relevant. When I had regular clients, I would often remember things like "oh, didn't you sell that property back in 2019? We should check the basis calculation" that they might forget. That said, $500 is definitely on the high end for a simple return. Maybe go with them to their appointment this year and see what the preparer actually does? You might get a better sense of whether they're getting value or being upsold on unnecessary services.
Is there anything specific to watch for to know if they're getting their money's worth? What kinds of questions should I ask the preparer?
Watch for how much time they spend asking questions about your parents' situation - good preparers should be inquiring about life changes, medical expenses, charitable donations, and changes in income sources. They should explain why they're making certain choices on the return. Ask what specific deductions or credits they're applying that might be missed with self-filing. Also ask if there are any tax planning suggestions for next year - good preparers offer this. If they're just entering W-2s and a few 1099s without much discussion, your parents are probably overpaying.
I'm gonna be the devil's advocate here - just let your parents do what makes them comfortable. My mom insisted on paying $350 to Liberty Tax every year even though I showed her how simple her return was. I finally gave up and realized that for her, it wasn't about the money but about the comfort and routine. For that generation, taxes are scary, and the peace of mind is worth the cost. Maybe offer to split the difference - like suggest a cheaper tax service but don't push the completely free DIY option if they're resistant.
This! I tried forcing my dad to file online and he made a mistake that cost way more than what he would have paid a professional. Sometimes it's not worth the battle.
You should check your driver app accounts too. Even if DoorDash/UberEats didn't mail you a 1099, they sometimes have tax documents available for download in your driver portal. Worth checking before you file.
Thanks for the tip! I just checked both apps and you're right - UberEats had a tax summary in the driver portal even though they didn't send anything. It doesn't have a tax ID number but at least shows my exact earnings which helps. DoorDash didn't have anything though. Guess they really don't generate any documents for earnings under $600.
Don't forget you can deduct mileage for all those deliveries! Standard rate was 67 cents per mile for 2024. Even with just $475 in income, the mileage deduction could potentially offset most of that.
I switched from TurboTax to an accountant three years ago and never looked back. Yes, it's more expensive ($375 vs the $120 I paid for TurboTax), but my accountant finds deductions I didn't know existed. She's saved me at least $1500 each year. Just make sure you find someone with good reviews who specializes in your situation (self-employed, rental properties, whatever applies to you).
Do you meet with your accountant in person? And how early do you need to book them? I heard good accountants get fully booked way before April.
I started with in-person meetings but now we do everything electronically. I send her my documents through her secure portal, and we have a video call to discuss anything unusual about my tax situation that year. You're absolutely right about booking early. I contact her in January to get on her schedule, and even then she's getting busy. By March, she's not taking new clients for the current tax season. Good accountants definitely book up fast, so if you're considering one, don't wait until April!
I was in your exact situation last year. TurboTax said I owed $1850. I panicked and went to H&R Block thinking they'd find some magic deduction. They charged me $220 and I still owed $1750. Barely any difference. If your tax situation is simple, software probably isn't missing much.
That's my fear too. Did H&R Block charge you even though they didn't really help?
Astrid BergstrΓΆm
Here's another factor I haven't seen mentioned yet - timing matters with these decisions. If you take the refund as cash, you get the money now. If you invest that money for a year before you need to make your next state tax payment, you could earn additional returns that offset any tax difference. Just another angle to consider in your decision.
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PixelPrincess
β’But don't you have to pay quarterly estimated taxes if you're anticipating a tax bill? So you couldn't really wait a full year to make that payment, right?
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Astrid BergstrΓΆm
β’You're right that you might need to make quarterly estimated payments - it depends on your total expected tax liability and other withholdings. If you have sufficient withholding from other sources (W-2 job, etc.), you might not need to make estimated payments. Even with quarterly payments though, you still have the benefit of having the money available to you for some period of time versus having it immediately applied to next year's taxes. You could potentially use it for higher priority needs before making those estimated payments when they're actually due.
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Omar Farouk
One other thing to consider - some states give interest on refunds if you take them as cash rather than applying forward. My state gave me 3% interest on my refund last year because of processing delays. That's another reason taking the cash might be better than applying forward!
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Chloe Martin
β’I don't think most states pay interest unless they're really late with the refund processing though. Did you have to wait an unusually long time?
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