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One thing nobody has mentioned yet - make sure you're responding to the CORRECT address. The return address on the notice itself isn't always where you should send your response. Look for specific instructions within the notice that will tell you exactly where to mail your response. Also, just to add to what others have said, I'd recommend including the following in your response package: 1. A cover letter explaining the situation clearly 2. A copy of the CP2100A notice 3. Copies of ALL versions of the 1099-NEC you have (but never send originals) 4. Your contact information including a daytime phone number
Thanks for this advice! I just checked my notice again and you're right - there's actually a specific address listed in the instructions section that's different from the return address. Would have totally missed that.
Glad you caught that! It's one of those details that's easy to miss but can make a big difference in how quickly your response gets processed. The other thing I forgot to mention is to make sure you keep the certified mail receipt and tracking information for at least a year. I've had situations where the IRS claimed they never received something, and having that proof of delivery saved me from some serious headaches.
Has anyone successfully resolved a CP2100A without calling or using special services? I mailed my response with documentation two months ago for a similar issue and haven't heard anything back. Getting worried they lost my response or are ignoring it.
I resolved mine by mail only last year, but it took almost 3 months to get their confirmation letter. As long as you have proof you mailed it (certified mail), you should be fine. They're just incredibly slow with paper processing.
21 One thing nobody's mentioned yet - you should check if your shares were held in a TFSA or RRSP. If they were in a TFSA, you won't owe any tax at all on the gains. If in an RRSP, you won't owe tax until you withdraw from the RRSP. Most employee share purchase plans are held in regular taxable accounts, but it's worth checking to be sure.
1 I didn't even think about that. My shares were just in a regular account through the employee program, not in any tax-sheltered account. I wish I had put them in a TFSA now! Would have saved me a bunch on taxes. Is it too late to do anything about the tax situation now that I've already sold?
21 Unfortunately, once you've sold the shares outside of a registered account, you can't retroactively shelter them from tax. The capital gains tax will apply as others have explained. For future reference though, you might want to consider using your TFSA contribution room for any new investments. The annual TFSA contribution limit for 2025 is $7,000, and if you haven't used your room from previous years, you might have quite a bit of contribution space available. Any investments you hold in a TFSA can grow and be sold tax-free.
16 Has anyone actually calculated what the tax might be for the OP? If you bought at around $15K and sold at $27K, that's a $12K gain. Half of that ($6K) is taxable and gets added to your income. If you're in Ontario and make around $60K otherwise, that $6K would be taxed at roughly 30%, so you'd owe about $1,800 in additional tax. Of course, this varies by province and income level.
8 That calculation seems about right based on average tax rates. Important to note that if this pushes OP into a higher tax bracket, a portion could be taxed at a higher rate. Also don't forget that if there were any dividends received while holding the shares, those would have been taxable in the years they were received!
For anyone facing rejected returns: the Free File Fillable Forms on the IRS website are FREE and available for the current tax year AND prior year returns. You don't need to pay for expensive software to fix a rejected return. Go to irs.gov/freefile and look for the Fillable Forms option. You'll need to manually enter your info, but if you have copies of your W-2s and other tax documents, it's completely doable. I've used this method for the past 3 years with no issues.
Thanks for mentioning this! Do you know if the Free File Fillable Forms will tell me why my return was rejected in the first place? And is there a deadline for filing last year's return before penalties start piling up?
The Free File Fillable Forms will generally show an error code or explanation if your return gets rejected, which should help identify the issue. However, they won't have access to your previously rejected return from another service like H&R Block. Regarding deadlines, if you're owed a refund, you have 3 years from the original filing deadline to submit your return without losing your refund. So for 2023 taxes, you'd have until April 2027. However, if you owe taxes, penalties and interest started accruing after the original due date (April 15, 2024, for 2023 taxes). The failure-to-file penalty is usually 5% of unpaid taxes each month, up to 25%, and the failure-to-pay penalty is 0.5% per month. I'd recommend filing as soon as possible to minimize these penalties if you think you'll owe.
Does anyone know if there's consequences for filing a return super late? Like my 2022 return got rejected and I never fixed it. Now I'm about to file 2024 taxes but worried the IRS is gonna come after me or something?
Yes, there can be consequences, but it depends on your situation. If the IRS owes you a refund for 2022, there's no penalty for filing late - but you only have 3 years from the original due date to claim that refund before you lose it forever.
Thanks, I'm pretty sure I was owed a refund of like $800 something. So sounds like I should file that 2022 return ASAP if I still want that money? Didn't realize there was a time limit on getting refunds!
The capital loss carryover worksheet is confusing but here's a simple way to check if your numbers are right: 1. Look at last year's Schedule D 2. Find line 21 (If a loss, the amount should be in parentheses) 3. Check if that loss was more than $3,000 4. If yes, then you used $3,000 on last year's 1040 and the rest should carry over to this year Basically you need to chain together your tax returns year after year. The worksheet isn't showing accumulated amount because that's not how capital losses work - they cascade from one year to the next, with each year's calculation building on the previous year.
This explanation makes sense but I'm still confused about one thing - when I'm entering info into TurboTax, does it want me to enter the full carryover amount from my previous return, or just the original capital losses from each specific year? The input screen is confusing me.
When entering information into TurboTax, you should enter the carryover amount shown on your previous return's Capital Loss Carryover Worksheet. You're not re-entering the original capital losses from each specific year - those have already been accounted for in the carryover calculation from previous returns. TurboTax specifically wants the carryover amount that was calculated at the end of your 2024 return, which should represent all your accumulated unused losses. Think of it as a single number that represents your "capital loss balance" that you're bringing forward, not as separate loss events that you need to track individually.
Has anyone else found that different tax software handles capital loss carryovers differently? I was using H&R Block for years and switched to FreeTaxUSA this year, and my carryover amounts look completely different.
YES! This happened to me when I switched from TurboTax to TaxAct. The Capital Loss Carryover Worksheet looked completely different and I realized I had been entering my carryover amounts wrong for YEARS. I had to go back and look at my old returns and realized I'd been shorting myself by not carrying over short-term and long-term losses separately. Cost me like $900 in refunds I could have had.
Thanks for confirming I'm not crazy! I went back and checked my old returns and realized the issue. H&R Block was combining my short-term and long-term carryover losses into one field, but FreeTaxUSA tracks them separately. Once I separated my carryover amounts correctly (about 60% was short-term, 40% long-term based on my trading history), the worksheet finally showed the correct total amount.
Emma Thompson
One important thing nobody has mentioned yet - make sure you have a session-by-session record of your gambling, not just an annual summary. The IRS technically requires you to document your gambling activity by session (meaning each time you visited the casino, not just your annual totals). I recommend creating a spreadsheet with dates, locations, types of gambling, amounts wagered, winnings, and losses for each visit. This level of detail really helps during an audit. Your players club records will help, but they don't always capture everything, especially if you gambled at multiple casinos or did any sports betting.
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Yara Haddad
ā¢This is really helpful info. Do you know if there's a specific IRS form or format they prefer for documenting gambling sessions? I have most of this info in my records but not organized in any special way.
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Emma Thompson
ā¢There's no specific IRS form for documenting your gambling sessions. The key is consistency and detail. I use a simple spreadsheet with columns for: Date, Casino/Location, Type of Gambling (slots, poker, sports betting, etc.), Amount Wagered, Amount Won, Amount Lost, and Net Gain/Loss for the session. Make sure to include those big jackpots that generated W-2Gs, noting them specifically in your records. The more your documentation aligns with the W-2Gs the IRS received, the more credible your overall record keeping will appear. Also include any supporting documentation like hotel folios if you traveled to gamble, ATM receipts showing withdrawals at casinos, and credit card statements showing casino charges. The goal is to create a comprehensive picture of your gambling activity that explains both the reported winnings and your overall losses.
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Malik Davis
Just a heads up - the rules are different for professional gamblers vs. recreational gamblers. If gambling is your primary occupation and source of income, you'd report it differently on Schedule C instead of Schedule A, and you wouldn't face the same limitations on deducting losses. But be careful claiming to be a professional gambler! The IRS has strict criteria and will scrutinize this closely. You need to be able to prove you approach gambling as a business with the intention of making a profit, keep extremely detailed records, and spend substantial time gambling (like it's your job).
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Isabella Santos
ā¢Do professional gamblers have to pay self-employment tax? I'm curious because I've been winning pretty consistently at poker for the last few years and wondering if I should be filing differently.
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