A little-known trick: if you make a large estimated payment in January of the following year (before filing), you might be able to apply it to the previous year's Q4 estimated payment. I've done this before when I realized I might face an underpayment penalty. The key is to specify on the payment voucher that you want it applied to the previous tax year's Q4 payment. This won't help with penalties from Q1-Q3 underpayments, but it can reduce the Q4 portion of any penalty.

This is such a common area of confusion! I went through the same thing last year with my mixed W-2 and consulting income. One thing that really helped me understand the penalty calculation was realizing that the IRS essentially wants you to "pay as you go" rather than catch up at year-end. So even if your total payments exceed your tax liability, you can still owe a penalty if those payments weren't distributed properly throughout the year. For your 2025 planning, increasing withholding is definitely the right move since it's treated as paid evenly throughout the year. But don't completely eliminate estimated payments if your self-employment income is substantial - you might just need to adjust the timing and amounts. Also worth noting: if your prior year tax liability was under $1,000, or if this is your first time owing an underpayment penalty, you might qualify for first-time penalty abatement even after filing. The IRS is surprisingly reasonable about waiving penalties for taxpayers with good compliance history.

To add some historical context to this discussion, the authority for the Treasury Department to issue tax regulations comes from 26 U.S. Code § 7805, which gives the Secretary of the Treasury the power to "prescribe all needful rules and regulations for the enforcement" of tax laws. This delegation of authority has been around since the Revenue Act of 1916! Sometimes Congress will specifically direct Treasury to issue regulations on a particular topic. These are called "legislative regulations" and they carry the full force of law. Other times, Treasury issues "interpretative regulations" on their own initiative to clarify how they understand the tax code.

Something nobody has mentioned yet is that sometimes courts effectively "write" tax regulations when they interpret ambiguous parts of the tax code or regulations. I had a case where I followed what I thought the regulation clearly stated about rental property depreciation, but my accountant explained that a Tax Court decision had effectively changed how that regulation is applied.

As someone who's been through multiple IRS audits with gig work, I can confirm that reasonable estimates ARE acceptable when you don't have contemporaneous records, but you need supporting documentation and a consistent methodology. The key is being able to show HOW you calculated your estimates. If you use your delivery history to calculate average miles per delivery, then apply that to your missing months, that's defensible. Just document your process clearly. For going forward, I'd honestly recommend investing in a good tracking app. Yes, it costs money, but think of it this way - if you drive 15,000 business miles in a year, that's nearly $10,000 in deductions at the current rate. A $5-10/month app subscription is a tiny fraction of that potential tax savings. The biggest mistake I see drivers make is trying to save $60 on an app subscription and then losing thousands in deductions because they forgot to track consistently. Your future tax savings will far outweigh the app costs. Whatever system you choose, just pick one and stick with it religiously. The IRS cares more about consistency and reasonable documentation than perfection.

Just want to echo what others have said about not getting too stressed about the missing months - you're definitely not the first dasher to face this situation! One thing I'd add is to check if your car insurance or phone has any location tracking data you could use as backup documentation. Some insurance companies track mileage for usage-based discounts, and your phone's location history might show your delivery patterns even if you weren't actively tracking. Also, don't forget that your phone and any mileage tracking app subscriptions are tax-deductible business expenses too! So even if you do pay for a premium app, you can write off that cost. The most important thing is just picking a system that works for YOUR habits and sticking with it. Whether it's a fancy app, a notebook, or just odometer photos on your phone - consistency beats perfection every time. You've got this!

I've been through this exact situation and it's incredibly frustrating! One thing that worked for me was checking if your former employer is registered with your state's business licensing department - many states have online databases where you can search by company name and find their EIN listed in their registration documents. Also, if you paid into unemployment insurance while working there, your state's unemployment office might have the employer's EIN on file and could provide it to you. I called my state's workforce commission and they were able to look it up for me using just the company name and my employment dates. Don't let their negligence stress you out too much - the IRS understands that some employers are unresponsive, which is exactly why Form 4852 exists. Just document your attempts to contact them (save those emails and call logs) in case the IRS ever asks. You're doing everything right by being proactive about this!

Have you tried checking with your bank? If you had direct deposit set up with this employer, your bank statements might show the company's full legal name and sometimes additional identifying information that could help you track down their EIN through business databases. Also, if you're still struggling to find the EIN after trying all these suggestions, remember that you can actually file Form 4852 without the EIN initially - just put "UNKNOWN" in that field and include a note explaining that the employer is unresponsive. The IRS will work to identify the employer based on the other information you provide (company name, address, your employment dates, etc.). While this might add some processing time, it's better than missing the filing deadline entirely. You can always amend your return later once you get the correct EIN, but at least you'll have filed on time and avoided any late filing penalties.

I've been running my freelance business for 6 years now. Quick tip that saved me a TON on taxes: track EVERYTHING business related. Seriously, I almost missed out on $4,800 in deductions my first year because I wasn't keeping good records of things like: - Home office (if you have dedicated space) - Portion of internet/phone bill used for business - Software subscriptions - Computer/equipment depreciation - Professional development (courses, books) - Health insurance premiums (self-employed) These all reduce your business income BEFORE the QBI calculation, which means they effectively give you double tax savings - once by reducing your income directly and again by reducing the base for your QBI calculation.

This is exactly the kind of question I had when I was transitioning to full-time freelancing! The confusion about QBI order of operations is so common. One thing I'd add to the great explanations here - make sure you're also considering quarterly estimated tax payments as you scale up. With $105K in revenue, you'll likely owe more than $1,000 in taxes, which means you need to make quarterly payments to avoid penalties. The QBI deduction is fantastic, but don't forget it only reduces your income tax, not your self-employment tax. So even with all these deductions, you'll still owe that ~$13,673 in SE tax on your net business income. Also, since you mentioned this is currently a side hustle - if you have W-2 income too, that complicates the QBI calculation because it's based on your total taxable income from all sources. The 20% QBI deduction is limited to 20% of your taxable income minus net capital gains, so having W-2 income might actually help you claim the full QBI deduction.