Option 2. Here's more information to help you.
Every brokerage sends the IRS the 5498 forms each year along with the balance of each of your brokerage accounts, broken down by type and account number. The IRS is aware of what you have.
The IRS usually runs about 3 years behind but is further behind right now. They will notice.
The IRS expects you to file returns up to 10 years back correcting and paying. The last 3 years are only for refunds.
You can absolutely add in your health care expenses and any other deductions you missed. You may not get a refund, but not owing is the next best thing.
Even if you owe, a little now with a smaller penalty and interest beats waiting.
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