Don't overlook your state tax obligations too! When I had federal tax issues, I stupidly ignored the state taxes thinking I'd deal with them later. Big mistake - some states are actually MORE aggressive than the IRS with collections. Make sure you're addressing both federal and state tax debts at the same time. In my case, the payment plan with the state was actually harder to get than the IRS one.

I've been through this exact situation - owed $27k to the IRS after some freelance work got misclassified. The anxiety is absolutely brutal, but you have more options than you think. First thing: breathe. The IRS actually wants to work with you because they know they can't collect from someone who's broke or homeless. They'd rather get paid something over time than nothing at all. Here's what worked for me: I immediately called the IRS (yes, the hold times are terrible but it's worth it) and requested an installment agreement. With your income level, you'll likely qualify easily. They'll want financial statements showing your monthly income and expenses, so gather those up. The key is being proactive. If you wait for them to come after you, your options become more limited and expensive. But if you reach out first, they're usually pretty reasonable. Also, file your tax return ASAP even if you can't pay. The penalty for not filing is 5% per month vs 0.5% per month for not paying. That adds up fast. One more tip: ask about first-time penalty abatement if this is your first major tax issue. It can save you thousands in penalties. You have to specifically request it though - they won't offer it automatically. You've got this. It's scary but totally manageable with the right approach.

Great thread - lots of practical insights here. One additional cost consideration that hasn't been mentioned is the potential need for quarterly estimated tax payments if your SPV generates significant income during the year. While C-corp investments typically don't generate much current income (which is part of their appeal), if your HoldCo has other activities or makes distributions, partners may need to make estimated payments to avoid underpayment penalties. Your tax preparer should help calculate these, but it's an additional service that can add $200-400 per quarter. Also, regarding the QSBS tracking mentioned throughout this thread - make sure your operating agreement specifically addresses how QSBS benefits will be allocated among partners if you have different investment dates. Some SPVs lose QSBS eligibility entirely if not structured properly from the beginning, so getting specialized legal and tax advice upfront is crucial.

One cost factor that hasn't been discussed is the potential for amended returns if your QSBS investment structure needs adjustment after the fact. I've seen several SPVs have to file amended partnership returns when they discovered their initial QSBS qualification documentation was incomplete or incorrect. Amended partnership returns typically cost 50-75% of the original return preparation fee, and if you need to amend multiple years, those costs add up quickly. For a 6-partner SPV, you could be looking at an additional $1,500-2,000 per amended year. This is why I always recommend having both your tax preparer AND a securities attorney review the SPV structure before making the initial investment. The upfront cost of getting specialized advice (usually $2,000-4,000 total) is much less than dealing with amendments and potential lost QSBS benefits later. Also consider setting aside budget for an annual tax planning meeting with your preparer, especially in years 3-4 of the investment when you might want to start planning for exit strategies and optimizing the QSBS benefits. These planning sessions typically run $500-800 but can save significant money on the eventual exit.

Has anyone mentioned the premium tax credit? If either of you gets health insurance through the marketplace, that could be another factor in deciding who claims the kid. It can drastically affect subsidy amounts.

This is such a complex situation with so many moving pieces! As someone who works in tax prep, I see this exact scenario all the time with unmarried couples. One thing I haven't seen mentioned yet is the timing consideration - make sure you're both on the same page about who's claiming your son BEFORE either of you files. The IRS will reject the second return that tries to claim the same dependent, and then you'll have to file an amended return to fix it, which delays everything. Also, since you mentioned daycare costs, don't forget about Dependent Care FSAs if either of your employers offers them. You can set aside up to $5,000 pre-tax for childcare expenses, which is separate from the Child and Dependent Care Credit. The person whose employer offers the FSA can use it regardless of who claims the child as a dependent on their tax return. With your income levels ($110k vs $16k), my gut says the lower earner claiming the child will probably result in better overall household savings due to EIC, but definitely run the numbers both ways. The difference could be significant - I've seen it swing $2,000-4,000 either direction depending on the specific circumstances.

dont forget about state taxes too!! some states have different rules for reporting 1099-K income. like here in Massachusetts our threshold is still $600 even tho the federal is $20k. so you might get a state 1099-K even if you dont get a federal one. check your state tax dept website!!

This is such a helpful thread! I'm in a similar situation with my small craft business on multiple platforms. One thing I learned from my tax preparer is that it's really important to track ALL your business expenses throughout the year, not just when tax season comes around. Even if you're only making $740 like the original poster, you can still deduct things like materials, shipping costs, platform fees, even a portion of your internet bill if you use it for business. I use a simple spreadsheet to track everything monthly - it only takes a few minutes but it's saved me hundreds in taxes. Also, if you're using platforms like Etsy, PayPal, or Square, most of them have annual tax summary reports you can download that show all your transactions for the year. This makes it much easier when you're filling out Schedule C, especially if you don't receive a 1099-K form.

Filed on February 18th with my purple Wisely card and still waiting here too! This is my first year using this card instead of my regular bank account, so I wasn't sure what to expect for timing. Reading through everyone's experiences is really helpful - sounds like there's quite a bit of variation even among people using the same card type. I'm at about 17 days since acceptance, so hopefully I'm getting close based on what others are sharing. Thanks for starting this thread, it's nice to know I'm not the only one checking my balance obsessively!

I'm in a similar situation as many of you! Filed on February 25th with my purple Wisely card and still waiting at day 15. This is actually my second year using the Wisely card - last year I got my refund in exactly 21 days, so I'm hoping for similar timing this year. What's interesting is that I'm also an independent contractor like the original poster, and I did notice last year that my refund seemed to come right on schedule despite having Schedule C income. I've been using the "Where's My Refund" tool daily (probably too much!) and it's still showing "processing." Thanks for creating this thread - it's reassuring to see I'm not the only one anxiously waiting and checking balances multiple times a day!