What kind of expenses did they disallow for you? I'm trying to get a sense of how strict they are about the national standards vs. actual expenses.

They disallowed part of my housing expense because it exceeded their local standard for my county, even though I provided actual bills. They also questioned my car payment since it was higher than their transportation standard. They allowed my medical expenses but required documentation for every single claim. The most frustrating part was they calculated my "potential income" based on previous years when I made more, even though my current situation had changed. This is where having a professional really helped - they knew how to document the change in circumstances properly.

Exactly this! And they'll also reject your offer if you miss ANY payments or filing deadlines during the time they're considering your offer. Friend of mine had her offer rejected 7 months into the process because she filed her current year return a week late.

Do you know if these exceptions apply automatically, or do you have to fill out a special form? I used some of my withdrawal for medical expenses but I'm not sure how to claim that exception.

The exceptions don't apply automatically - you need to report them correctly on your tax return. For medical expenses, you'll need to file Form 5329 along with your tax return. On that form, you'll enter the early distribution amount, then enter the portion that qualifies for the medical expense exception using the appropriate exception code. Keep in mind that only unreimbursed medical expenses exceeding 7.5% of your adjusted gross income qualify. So if your AGI is $50,000, only medical expenses above $3,750 would potentially qualify for the exception. Make sure to keep all documentation of your medical expenses in case of an audit - receipts, insurance statements, anything showing these were legitimate medical costs.

I got mine from Fidelity in late January, but Vanguard didn't send mine until February 10th. They're required to mail them by January 31st, but that doesn't mean they'll arrive right away. You could check if yours is available electronically - might be faster than waiting for mail.

How do you manually adjust cost basis? I think I might be in this exact situation but I have no idea how to fix it. My broker's website is confusing and when I called customer service they weren't helpful at all.

Most brokerages have a section where you can adjust or enter cost basis information for your holdings. Look for something like "Update Cost Basis" or "Adjusted Cost Basis" in your account settings or portfolio section. You'll typically need to enter the acquisition date and price per share from your vesting documentation. If you can't find it online, call your broker again but specifically ask for their "cost basis department" - regular customer service reps often don't know how to handle these adjustments. Have your vesting statements ready showing the FMV (fair market value) on your vesting dates. If they're still not helpful, you can report the correct basis directly on your tax return using Schedule D and Form 8949, making sure to check the box indicating that the basis reported to the IRS was incorrect.

Exactly right. I recommend people make estimated tax payments each quarter after significant vestings to avoid penalties too. I messed this up one year and got hit with underpayment penalties on top of the extra tax!

I don't think this is accurate. The IRS doesn't proactively send you your tax information just because you have direct deposit set up. You might be thinking of something else? Maybe tax return transcripts that you specifically requested?

You know what, you're absolutely right and I was confusing two different things. What actually happened was I had requested my tax transcripts online and selected to have them mailed, then forgot about it. They came months later after I'd moved but were forwarded to my new address. The direct deposit thing was completely unrelated. Thanks for the correction!

The Get Transcript tool is actually pretty comprehensive! It shows all the W2s and 1099s that have been reported to the IRS under your SSN. The only real limitation is that sometimes there's a delay in when information appears - if an employer just recently submitted your W2, it might not show up immediately. Also, while it shows the federal tax information, it might not have complete state tax details, so if you need that for state returns, you might need to contact your state tax department separately.

Thanks for mentioning this! Just checked my 1099-B and you're right - the cost basis is completely missing for two of the transactions. Do I need to contact my brokerage to get this corrected or can I just fill in the correct amounts on Form 8949?

You can fill in the correct cost basis directly on Form 8949 yourself - you don't need to wait for a corrected 1099-B. Just use code "B" in column (f) to indicate that you're reporting a cost basis different from what's on your 1099-B. Keep all your records showing the actual purchase price in case you're ever audited. Even a printout of your transaction history from your brokerage account can work as documentation. The IRS understands that cost basis issues are common, especially with older investments or when securities transfer between brokerages.

Free File Fillable Forms don't support amended returns (1040-X) unfortunately. I tried going that route last year. You either have to print and mail a paper amendment or use commercial software. Some tax software has free amendment options if you filed your original return with them, might be worth checking.