Has anyone used multiple crypto tax software programs to compare results? I tried three different ones and got wildly different numbers for the same transactions. Kinda concerning.

I went through a similar nightmare situation with years of unfiled crypto taxes. One thing I learned the hard way is to tackle this systematically rather than trying to fix everything at once. Start with your most recent tax year first (2023) since that's what you need to file soon. Get that sorted with proper crypto tax software, then work backwards. This approach helps you understand the process before diving into the messier historical data. For the older years, focus on the big transactions first - don't stress about every $5 trade from 2017. The IRS cares more about substantial unreported income than minor discrepancies. If you're missing some transaction data from defunct exchanges, document what you tried to recover and use reasonable estimates based on what you can reconstruct. Also consider consulting with a tax professional who specializes in crypto - the cost might be worth it given the complexity of your situation and the potential penalties involved. They can help you determine which years actually need amended returns and guide you through any voluntary disclosure programs if applicable. The most important thing is that you're taking action now rather than continuing to ignore it. The IRS generally works with taxpayers who are making good faith efforts to get compliant.

Has anyone actually gotten penalized for using the wrong form? I sent 1099-MISCs to my investors last year but now I'm thinking they should have been 1099-DIVs based on this thread...

This is such a common confusion for new business owners! I went through the exact same thing last year. The key is understanding the legal relationship you have with your investors, not just calling them "investors." If they gave you money in exchange for ownership in your business (equity), you'll likely need 1099-DIV for distributions or Schedule K-1 if you're structured as a partnership/LLC. If they loaned you money and you're paying them back with interest, that's 1099-INT territory. If they're getting guaranteed payments regardless of your business performance, that might be 1099-NEC or 1099-MISC depending on the specifics. My advice: dig out those original investment contracts and look at the exact wording. Words like "loan," "equity stake," "ownership percentage," or "guaranteed return" will tell you everything you need to know about which forms to use. Don't guess on this - the penalties for using wrong forms can be expensive as others have mentioned!

When my wife needed an ITIN (she's from Brazil, we live there), we used a Certified Acceptance Agent in our country instead of mailing everything to the IRS. Made the process way easier because they verified all her documents locally so we didn't have to send originals or certified copies through international mail. The IRS website has a directory of acceptance agents worldwide. Might be worth checking if there's one near you: https://www.irs.gov/individuals/international-taxpayers/acceptance-agents-1

I went through this exact situation last year! As others mentioned, you definitely need to get your wife an ITIN even when filing separately - it's required for the spouse field on your tax return. A few practical tips from my experience: 1. Don't stress about the "date of entry" field being blank - just attach a brief statement explaining she's never entered the US 2. Make sure to get a certified copy of her passport (not just a regular photocopy) 3. The process took about 12 weeks for us, so plan accordingly One thing I wish I'd known earlier: you can actually request expedited processing if you're facing a hardship due to the delay. We didn't know about this option and just waited the full processing time. Also, keep copies of everything you send - the IRS sometimes requests additional documentation and it helps to have everything on hand. The good news is once you get through this first year, you'll have her ITIN for all future tax filings. It's a pain initially but worth getting it sorted out properly.

This is such a helpful thread! As a tax professional, I see this situation come up frequently with divorced parents. You've all covered the key points really well - yes, each parent can claim one child, and the arrangement your son is considering is perfectly legitimate and often works better than alternating years. One additional consideration I'd mention is to think about Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent). While it's not required in their situation since they're each claiming different children, it's good to know about in case their circumstances change. If one parent ever needs to "release" their right to claim a child to the other parent (maybe due to changed custody or income situations), this form makes it official. Also, since they've been flexible with arrangements, they might want to build in some flexibility to their tax agreement too. Maybe include a clause that they can revisit who claims which child if there are major changes in custody time, income, or expenses. This way they're not locked into something that might not make sense down the road. The communication and documentation advice everyone's shared is spot-on. Having clear agreements upfront prevents so many headaches later!

This is such a great question and I'm glad to see so many helpful responses! I went through a very similar situation with my ex-husband a few years back with our twin boys. We had been alternating who claimed both kids each year, but it created a lot of tension because whoever didn't get to claim them that year felt like they were missing out on significant tax benefits. Switching to each claiming one child consistently was honestly one of the best decisions we made for our co-parenting relationship. It eliminated the yearly negotiation and made our tax planning much more predictable. Both of us could count on the same credits and deductions each year, which made budgeting easier. One thing I'd add that I don't think anyone mentioned yet is to consider each child's future plans when deciding who claims which child. For example, if one child is likely to go to college soon, the parent who claims that child will be eligible for education credits when the time comes. It might make sense to think about which parent is more likely to be paying for college expenses and have them claim that child consistently. Also, don't underestimate how much easier this makes things when you're actually sitting down to do your taxes. No more scrambling to coordinate with your ex about who's claiming whom - you both just know exactly what to expect on your returns each year.

I completely understand your confusion about the handwriting - IRS documents can be notoriously difficult to read! As everyone has confirmed, CAF numbers are definitely 8 numeric digits followed by 1 alphabetic character, so your instinct that it's an 8 (not a B) in the 8th position is correct. One additional verification method that might help: if you have access to a computer scanner or even a good smartphone camera app, try scanning the document at high resolution and then adjusting the contrast or brightness. Sometimes digital enhancement can make unclear handwriting much more legible than trying to read it on the original paper. I've found this particularly helpful with IRS correspondence where the carbon copy quality isn't great. Also, since you mentioned this is for eFiling, most tax software will actually validate the CAF number format when you enter it, so if you input it correctly as 8 digits + 1 letter, the system should accept it without issues. If there were a format error, you'd typically get an immediate notification. You're absolutely doing the right thing by double-checking - CAF number errors can cause filing delays that nobody wants during tax season!

I've been following this discussion and wanted to add one more helpful resource for anyone dealing with unclear CAF numbers in the future. The IRS actually has a dedicated CAF Unit help desk at 855-204-6840 that specifically handles questions about CAF number format, status, and verification. This line is separate from the general Practitioner Priority Service and tends to have shorter wait times since it's more specialized. When you call, they can verify your CAF number immediately by looking it up in their system using your name and the date you received it. They're also really helpful if you need to update any information associated with your CAF number or if you have questions about proper usage. Like everyone else has confirmed, the format is definitely 8 numeric digits + 1 alphabetic character, so you're right that it's an 8 in the 8th position. But having that direct CAF Unit number can be really valuable for future reference, especially during busy filing seasons when general IRS lines are swamped. I've used this line several times over the years and always had good experiences with knowledgeable representatives who understand the specific issues tax professionals face.