Is anyone else getting way more IRS letters this year than before? I never got any for 20 years, and suddenly got 3 different ones in the past few months. One was about the Child Tax Credit payments, one was about some adjustment to my return, and another was about verification. Feel like they're sending out more notices than before?

I totally get why you were scared to open it! I had the same reaction when I got my first IRS letter a few years ago. Just seeing that official envelope in the mailbox made my heart race. Most of the time these letters are actually pretty routine - they might be correcting a small math error (which sounds like what happened to you with that CP12!), asking for clarification on something, or even just sending you information about changes to tax law that might affect you. The key thing is to always respond by the deadline if they're asking for something, even if it's just to say you agree with their assessment. And keep copies of everything! I learned that the hard way when I had to reference an old notice months later. Glad it turned out to be good news for you with that extra refund! Sometimes the IRS actually catches mistakes that work in our favor.

Random question - does anyone know if guaranteed payments from an LLC taxed as a partnership qualify for QBI? I've heard conflicting things.

This is such a helpful thread! I'm in a similar situation with my single-member LLC and have been stressing about getting the QBI calculation right. One thing I want to add that might help others - make sure you're using the correct SE tax amount in your calculation. The "50% of SE tax" that gets deducted from your QBI should match exactly what you deduct on Form 1040 line 15 (the deductible portion of self-employment tax). I made the mistake of using 50% of my total SE tax liability instead of the actual deductible portion, which threw off my entire QBI calculation. The deductible portion is slightly less than 50% due to how SE tax is calculated. Also, for anyone using tax software, double-check that your health insurance premiums are properly coded as self-employed health insurance. If they're mistakenly categorized as a business expense on Schedule C, you could be double-deducting them in your QBI calculation.

I had a similar situation with mixed income sources and was initially confused about my QBI calculation too. After reading through all these responses, I realize I should have done more research upfront about the SSTB vs non-SSTB distinction. For anyone else in this situation, I'd recommend documenting your income split from day one. I wish I had kept better records showing the time and effort I spend on different business activities. It would have made tax time much less stressful. One thing that helped me was creating a simple spreadsheet tracking which clients pay for consulting services versus which ones buy my software products. Even though some clients do both, I can clearly show the revenue breakdown and the different types of work involved. This kind of contemporaneous record-keeping seems like it would be valuable if the IRS ever had questions. The phase-out calculation is definitely more nuanced than I originally thought. Thanks to everyone who shared their experiences - it's really helpful to know I'm not the only one who found this confusing!

As someone who's been through QBI calculations for a mixed consulting/product business, I can confirm your software is likely correct! The phase-out rules are really complex when you have multiple income streams like yours. The key insight that helped me understand my situation was realizing that IT consulting is typically considered a Specified Service Trade or Business (SSTB) and subject to the $170,050-$220,050 phase-out range for 2024, but software product sales are generally NOT considered SSTB income. This means you can reasonably allocate your $178,000 between these two categories. For your consulting income portion, you'd face the gradual phase-out since you're in that range. But for your software sales portion, you'd get the full 20% QBI deduction with no income-based limitations. If a significant chunk of your $178,000 comes from software sales, this could easily explain why your deduction is higher than expected. The most important thing is having good documentation to support this split. Keep separate invoices, track time spent on each activity, and maintain records showing these are distinct business operations. I learned this the hard way when I realized my record-keeping wasn't as detailed as it should have been! Your $25,600 deduction sounds reasonable if you have a good mix of SSTB and non-SSTB income. The tax software likely made this allocation automatically based on how you categorized your revenue streams.

Has anyone tried checking the "Married filing separately" box on the W4 but still filing jointly on the actual tax return? My tax guy suggested this for my situation where my wife makes 3x what I make.

I went through this exact same situation last year! The multiple jobs worksheet can be brutal when there's a huge income gap like yours. Here's what worked for me: Instead of using the multiple jobs worksheet on your W-4, try this approach: Keep your W-4 simple (just check "Married filing jointly" and claim your standard withholding), then have your spouse add extra withholding on their W-4 using line 4(c). Since they make $350k, even a few hundred extra per paycheck won't hurt them as much as it's hurting your $45k paychecks. To estimate the right amount: Take last year's total tax liability, subtract what would normally be withheld from both your paychecks with standard withholding, and divide that difference by your spouse's number of pay periods. Add that amount to line 4(c) on their W-4. This way you keep most of your paycheck while still covering the extra tax burden from your combined high income. You can always fine-tune it once the IRS calculator comes back online, but this should give you immediate relief from having empty paychecks.

Check if your CPA requested a transcript of the account. That could explain why you're seeing the transcript update with a future date, but haven't received the letter yet. When we request transcripts for clients, it sometimes triggers a notice generation. The fact it says 12/16 just means that's when it will post to your account officially.

The fact that you're seeing dates in the future (12/16 when it's only 12/5) is actually normal for IRS systems - their computer generates the notice with the official posting date, but the physical letter gets mailed right away. This is super common with amended returns. Given the $7,850 liability showing up, this is most likely just the IRS sending you formal notification that they've processed your amended 2019 return and determined you owe additional tax. Certified mail doesn't necessarily mean anything scary - they use it for any notice involving a balance due to ensure you receive it. The good news is you already have a CPA who filed the amended return, so they should be able to help explain exactly what the notice says once you get it. Don't stress too much - this sounds like standard procedure for amended returns with additional tax owed.