Pro tip: Skip TurboTax entirely and use FreeTaxUSA. Federal filing is actually free for almost all tax situations (not just the super basic ones), and state filing is only $15. I've been using it for 5 years after TurboTax tried to charge me $120 halfway through my "free" filing. TurboTax, H&R Block, and TaxAct all pull the same bait and switch tactics. They spend millions on advertising their "free" versions knowing full well most people won't qualify once they're deep into the process.

I filed with TurboTax for 7 years and got hit with these "surprise" fees every single time. This year I switched to Cash App Taxes (used to be Credit Karma Tax) and filed completely free - federal AND state, with investment income and everything. took me like 45 minutes total.

The complexity of US sales tax compared to other countries' VAT systems is really striking! One thing that might help as you navigate this is understanding that sales tax in the US is primarily a consumption tax collected by retailers, rather than a value-added tax that businesses can offset against their own sales. For your business purchases, you'll want to distinguish between two types: items you're buying for resale (inventory) versus items for business use (supplies, equipment, etc.). For resale items, definitely look into getting a resale certificate from your state - this can save you significant money upfront since you won't pay sales tax on inventory that your customers will eventually be taxed on. For business use items, while you can't reclaim the sales tax like VAT, remember that the total cost (including sales tax) is generally deductible on your federal business tax return. This doesn't put money directly back in your pocket like a VAT refund would, but it does reduce your taxable income. Also worth noting - if you plan to sell online to customers in other states, you'll need to understand nexus rules and when you're required to collect sales tax from customers. Each state has different thresholds and requirements, which adds another layer of complexity compared to unified VAT systems.

As someone who's been helping businesses navigate US tax compliance for over a decade, I wanted to add a few practical tips for your situation. Since you mentioned you're from overseas, you might also want to consider whether your business structure (LLC, corporation, etc.) affects how you handle these sales tax payments and deductions. One thing I always tell new business owners is to set up a separate business checking account if you haven't already - this makes tracking business purchases (including the sales tax portion) much easier come tax time. When you're making purchases at retailers like Walmart or Target, try to keep business and personal purchases completely separate to avoid any confusion with deductions. Also, don't forget about online purchases! Many states now require online retailers to collect sales tax even for out-of-state purchases, so you might see tax being collected on Amazon orders, etc. The same rules apply - if it's a legitimate business expense, you can deduct the total amount including tax. Finally, consider consulting with a local CPA who has experience with your state's specific rules. They can help you determine if getting resale certificates makes sense for your business model and ensure you're maximizing your deductions while staying compliant. The investment in professional advice often pays for itself in tax savings and peace of mind.

I went through this exact situation about 8 months ago and successfully got my Section 6657 penalty removed! The frustration is absolutely real when you know you did everything right but still got hit with penalties. Here's my successful approach: I wrote a clear, factual letter explaining that I had sufficient funds when the IRS attempted to process my payment. I included my SSN, tax year, and CP14 notice number right at the top. The key was being very specific about dates - I stated the exact date the payment was supposed to process and showed my account balance on that day with highlighted bank statements. I also included Form 843 (Claim for Refund and Request for Abatement) as the formal request mechanism - this is crucial! Without this form, they often just file your letter without processing it as an official abatement request. I decided to pay the penalty upfront to stop interest from accruing, which turned out to be the right call since they refunded it with interest when they approved my request. Sent everything via certified mail to the address on my CP14 notice. The whole process took about 9 weeks, but they completely removed the penalty. The IRS is actually pretty reasonable about these electronic payment failures when you can prove you had adequate funds and acted promptly. Since you filed on time and paid immediately once you discovered the issue, you have a strong case. Don't lose hope!

I went through this exact same situation with a Section 6657 penalty about a year ago, and I can definitely understand your frustration! The electronic payment system failures are unfortunately more common than they should be. Here's what worked for me to get the penalty completely removed: **Essential Documents:** - Form 843 (Claim for Refund and Request for Abatement) - this is absolutely critical - Bank statements showing sufficient funds on the date the IRS attempted to process your payment - A clear, professional letter explaining the situation - Copy of your CP14 notice **Key Points for Your Letter:** - Include your SSN, tax year, and CP14 notice number at the top - State that you're requesting abatement of the Section 6657 penalty - Specify the exact date the payment was supposed to process - Emphasize that you had sufficient funds (reference your bank statement) - Mention that you filed on time and paid immediately upon discovering the issue - Keep it factual and concise - about 1-2 pages max **Payment Strategy:** I'd recommend paying the penalty now to stop interest from accumulating. The IRS will refund it with interest if they approve your request. This also shows good faith on your part. **Mailing:** Send everything via certified mail to the address on your CP14 notice so you have proof of delivery. In my case, it took about 8 weeks to get a response, but they completely removed the penalty and refunded what I had paid. The IRS is actually quite reasonable about these situations when you can prove the payment failure wasn't due to insufficient funds or negligence on your part. Since you can clearly demonstrate you had adequate funds and acted promptly, you have a very strong case. Don't get discouraged by the process - you've got this!

The real question is how would the IRS even know about your under the table work? Unless someone reports you or you're depositing large cash amounts regularly, they have no way to track cash transactions. Not saying you shouldn't report it, just saying realistically the chances of getting caught are pretty low for small amounts.

I was in a really similar situation a few years ago with about $9K in unreported cash income from freelance graphic design work. I kept putting off dealing with it because I was scared, but honestly the process of coming clean was way less painful than the constant anxiety of wondering if I'd get caught. I ended up filing an amended return for the year I missed and had to pay some back taxes plus interest, but no penalties since I voluntarily disclosed it. The IRS actually has programs specifically for people who want to come forward voluntarily - they're much more lenient than if they catch you first. One thing I learned is that even without perfect documentation, you can reconstruct your income using things like text messages with clients, bank statements showing cash deposits, or even just your best honest recollection of jobs and amounts. The key is being able to show you made a good faith effort to be accurate. My advice would be to bite the bullet and report everything. The peace of mind is worth way more than whatever extra tax you'll owe, and you'll sleep better knowing you're not looking over your shoulder anymore.

Just a suggestion - for small partnerships like your barbershop quartet, have you considered using FreeTaxUSA? It handles K-1s with various codes in their free version, including Box 20 codes. I used it for my small LLC this year and it didn't charge extra for any of the "complex" forms that other software wants to upcharge for.

As someone who's dealt with numerous K-1 forms over the years, I can confirm what others have said - Code AG in Box 20 is purely informational and doesn't require any action on your personal return. It's just the partnership reporting gross receipts for Section 448(c) purposes. The frustrating part is how tax software companies exploit these "complex-looking" codes to push expensive upgrades when most small partnerships don't actually need them. For a band with minimal income, you're likely only dealing with the basic income/loss items from Box 1. If you're set on using TurboTax, try continuing without entering the Code AG information - the software should allow you to skip it since it's not a required entry for your personal return. Alternatively, consider switching to a different software that doesn't nickel-and-dime you for standard partnership forms. Also, given that your band barely made money last year, you might want to discuss with your bandmates whether the partnership structure is worth the annual hassle of K-1s and partnership returns. Sometimes simpler is better for small creative ventures.