Technically you can file as soon as the season opens IF you have all your documents. But employers aren't required to send W-2s until January 31st. So unless your employer sends them early, you'll need to wait. Don't file without all your documents! I made that mistake once and had to file an amendment, which was a huge pain.

Thanks for clarifying! I'll wait till I have everything then. Don't want to deal with amendments or worse, getting audited for missing information.

I filed early last year too and got my refund in 2 weeks with direct deposit. But I have a super simple return with just one W-2 and standard deduction. I think complexity matters more than when you file.

This is really helpful advice. Do you know if TurboTax can help me calculate how much I should be paying quarterly? Or should I just put aside 30% of everything I make to be safe?

TurboTax can give you estimated quarterly payment vouchers based on your previous year's income, but since your situation has changed, it might not be accurate. For simplicity, I'd recommend setting aside 30% of every payment you receive in a separate savings account dedicated to taxes. Then each quarter, calculate your actual tax obligation more precisely (or use a tax calculator online) and make your payment. Whatever is left in the account after your quarterlies can go toward retirement savings or other goals. This approach gives you a buffer and prevents nasty surprises.

This! I'm in California and they're even stricter about estimated payments than the feds. And their penalties are no joke either.

This is super helpful! I hadn't even thought ahead to resolution options yet. Any tips on documentation needed for the Offer in Compromise? I suspect my client will have significant tax debt once we figure out all the unfiled years.

For the OIC, you'll need comprehensive financial documentation - recent bank statements (3 months), pay stubs, vehicle registrations, property records, investment accounts, retirement accounts, credit card statements, loan statements, and monthly expense documentation. The IRS Form 433-A (individual) or 433-B (business) will be required. The key is accurately documenting your client's collection potential. This includes liquid assets, equity in property, and future income potential minus allowable expenses. If your client has few assets and limited income, that strengthens the OIC position. Make sure to fully document any hardship conditions or special circumstances that would justify accepting less than the full amount owed.

Streamlined procedures only apply to international situations with unreported foreign assets/income. If this is purely domestic, it wouldn't qualify. Regular voluntary disclosure through filing the required back returns is the way to go.

Thank you for the insider perspective! Our company is pretty small (only about 25 employees) so I'm dealing directly with the owner's wife who handles all the payroll stuff. She seemed annoyed when I brought it up, which is probably why she claimed there was a "window" that closed. Do you know if there are any potential consequences for me if I just file without mentioning the HSA contributions since I don't actually have an HSA?

The main concern would be that the IRS's systems might flag a mismatch between what your employer reported and what you're reporting. However, for a small amount like $65, it's unlikely to trigger any serious issues. If you file without claiming any HSA (which is correct since you don't have one), you're being honest about your actual tax situation. If the IRS does question it, simply explain that your employer made an error and refused to correct it despite your requests. The fact that you've tried to get it fixed works in your favor.

Most tax software including TurboTax has a section for HSA contributions. Just don't enter anything in that section even though your W-2 shows the code W amount. If the software asks about it specifically, there's usually an option to indicate it's incorrect or doesn't apply to you.

I hadn't considered wash sales affecting the holding period classification! I'll definitely look back through my history to see if I had previous transactions in this stock. That actually makes a lot of sense because I was actively trading this particular ticker throughout the year, so there's a good chance I triggered some wash sales along the way. Would that really change the Form 8949 category though? I thought wash sales just affected the basis calculation, not the short-term/long-term classification.

Wash sales primarily affect your cost basis by disallowing the loss, but they can also affect holding periods in certain circumstances. If you repurchase shares within 30 days of selling at a loss, the holding period of the original shares can sometimes be added to the new shares. This is a complex area of tax law and brokers often handle it differently. Some brokers calculate everything properly, while others (especially the free trading apps) often make errors in reporting. Your situation sounds like a reporting error rather than a legitimate holding period adjustment, but it's always good to check your complete trading history to be sure.

This is the correct answer! Broker lot relief methods are often the source of these discrepancies. I work in accounting and see this constantly with clients who trade actively.