I went through this exact same situation with my freelance business EIN last year! The mistake is super common - the IRS application can be confusing about employee intentions. I'd recommend calling the IRS Business & Specialty Tax Line first (800-829-4933) as others mentioned, but if you can't get through after a few tries, the written request route works great too. I sent a simple letter explaining the error and got it resolved in about 4 weeks. The key thing is to act on this soon - don't let it sit like some people do. The IRS is actually pretty reasonable about fixing these application errors, especially when you're proactive about it. Once it's corrected, you'll get peace of mind knowing you won't have to deal with those quarterly employment forms you don't need.

I had this same issue with my single-member LLC about 6 months ago! The good news is you definitely don't need to get a new EIN - that would actually create more complications down the road. What worked best for me was calling the IRS Business & Specialty Tax Line (800-829-4933) early in the morning, around 7-8 AM. The wait times are usually shorter then. When you get through, just explain that you made an error on your EIN application by indicating you would have employees when you don't, and ask them to update your filing requirements to remove Forms 940 and 941. The representative will ask for your EIN, business name, and some basic verification info. They can make the change right there on the call - it literally takes about 5 minutes once you're connected. Make sure to ask them to send you a confirmation letter showing the updated requirements for your records. One tip: have your EIN confirmation letter handy when you call, as they might reference the original application details. The whole process was way easier than I expected, and now I only have to worry about my regular business tax returns instead of those quarterly employment forms I never needed in the first place!

Are we sure the gift tax exclusion is $18k for 2025? I thought it was still $17k? Not that it matters much for OP's $20k gift, they'd still need to file the form.

This is such a thoughtful way to help your child! One additional consideration I haven't seen mentioned yet - make sure to document the gift properly with a gift letter that includes the date, value, and your relationship to the recipient. This creates a paper trail that can be helpful if the IRS ever has questions. Also, since your child is 25, they're definitely old enough to handle their own tax reporting, but you might want to give them a heads up about keeping good records of the sale for their tax return. They'll need to know your original purchase price and date to calculate the capital gains correctly. The timing sounds perfect too - if they're planning to use this for a car purchase relatively soon, the stock won't be sitting in their account generating additional gains that could complicate things. Smart planning all around!

Just FYI, there's a special charitable giving deduction for 2025 that lets you deduct up to $600 for married filing jointly ($300 for single) EVEN IF YOU TAKE THE STANDARD DEDUCTION! So you can get at least some benefit from your church donation regardless.

Thanks everyone for the helpful discussion! This has been really educational. I just wanted to clarify one more thing - since we're definitely taking the standard deduction this year, should I still keep all my donation receipts and records from our church? I'm wondering if it's worth tracking everything just in case our situation changes in future years, or if there's any other reason the IRS might want to see proof of these donations even when we're not claiming them as deductions. Also, that "bunching" strategy several people mentioned sounds interesting - basically doubling up donations every other year to get over the standard deduction threshold. Has anyone actually tried this approach successfully?

Has anyone actually found a tax form where self-employed people can claim sick days? I have TurboTax and don't see anything like this mentioned.

Just to add some clarity here - I went through this exact confusion last year when I started freelancing! The accountant was likely referring to the old FFCRA credits that ended, but there are still some things worth knowing as a self-employed person. While there's no federal "sick day" program currently, don't forget about these legitimate self-employment deductions that can help offset income loss when you're unable to work: - Health insurance premiums (huge deduction if you're not covered elsewhere) - HSA contributions if you have a qualifying high-deductible plan - Home office expenses (a portion of rent, utilities, etc.) - Professional development and training costs - Equipment and software purchases Also, some cities and counties have their own programs - worth checking your local government website. And definitely consider setting up a separate "sick fund" savings account where you put aside 5-10% of each payment for those inevitable down days. It's frustrating that we don't have the same safety net as W-2 employees, but building these habits early in your freelancing career will really pay off!

Has anyone used the annualized income method instead? I'm in a similar situation but my income is VERY uneven throughout the year, so paying equal installments seems like it would create cash flow problems for me.

I'm in a very similar boat - just started freelancing in March and was totally confused about estimated payments! Reading through all these responses has been super helpful. One thing I'd add is to make sure you're also setting aside money for self-employment tax (the additional 15.3% for Social Security and Medicare) on top of your regular income tax. That caught me off guard my first year since as a W-2 employee, half of that was paid by my employer. Also, don't forget that you can deduct half of the self-employment tax when calculating your adjusted gross income, which can help reduce your overall tax burden. It's not huge but every bit helps when you're navigating this for the first time! The safe harbor route definitely seems like the way to go for peace of mind, especially in your first year when you're still figuring out your income patterns.