Just wanna say I was in almost the exact same boat (8 years unfiled, same job) and I got through it. Took me about 2 months working on weekends. The hardest part was just starting. Once I filed the first year, it got easier. For what it's worth, I did owe money in the end, but the IRS was actually reasonable about setting up a payment plan. The monthly amount was way less scary than the total figure.

I'm dealing with a similar situation (7 years unfiled) and wanted to share what I learned from my tax attorney consultation. The key thing that helped reduce my stress was understanding that the IRS has a "Failure to File" safe harbor provision - if you consistently had taxes withheld from your paychecks and were due refunds in most years, the penalties are often minimal or waived entirely. Since you mentioned being at the same job the whole time, there's a good chance you had regular withholdings. The IRS is generally much more lenient with people who were overwithholding versus those who were underpaying. One thing I wish I'd known earlier: if you're going to owe money across multiple years, consider filing all your returns at once and then immediately requesting an installment agreement. This stops the failure-to-file penalties from continuing to accrue and shows good faith effort to comply. Also, don't beat yourself up about the delay - life happens, and depression makes everything harder. The fact that you're tackling this now shows real strength. You've got this!

Double check if your 1099-R has code J or T in Box 7. Those codes indicate a distribution for a first-time home purchase. If not, that might be part of the problem - the IRS doesn't know the purpose of your withdrawal.

I went through almost exactly the same situation last year! The key thing to understand is that the IRS penalty notice is likely wrong because they're missing the proper documentation showing what portion of your withdrawal was contributions vs. earnings. Here's what I learned from my experience: 1. You absolutely CAN withdraw Roth IRA contributions tax and penalty-free at any time - you were right about that 2. The problem is proving to the IRS which portion was contributions vs. earnings 3. Form 8606 is crucial - it tracks your basis (contributions) in the Roth IRA Since you've been contributing since 2008 and you're 42, your account has definitely been open for more than 5 years, which is great. This means even the earnings portion that qualifies under the first-time homebuyer exception should be completely tax-free. You'll need to: - File Form 8606 for 2023 showing your contribution history - File an amended return (1040-X) to properly report the distribution - Include documentation proving your total contributions over the years The scary notice from the IRS is likely just their automated system assuming the worst case scenario. Once you provide the proper documentation, most or all of that tax bill should disappear. Don't panic - this is fixable!

make sure u track ur business expenses!! i'm also a dependent with 1099 income and i saved SO MUCH by tracking my mileage for doordash. the standard mileage rate is like 67 cents per mile for 2024 i think? that adds up fast and reduces ur self employment tax!!!!

Just to add to all the great advice here - don't forget about quarterly estimated tax payments for next year! Since you're self-employed and had no taxes withheld, you'll likely need to make quarterly payments in 2025 to avoid underpayment penalties. The IRS generally expects you to pay as you earn, not just at year-end. You can calculate your estimated payments based on this year's tax liability or use the safe harbor rule (pay 100% of last year's tax if your AGI was under $150k). Form 1040ES has worksheets to help you figure this out. The first quarter payment for 2025 is due January 15th, so you'll want to get on top of this right after you file your 2024 return!

Has anyone looked into whether state tax laws might treat this differently? I know for federal purposes what everyone's saying about tax classification controlling is right, but I'm in California and they sometimes have their own weird rules about business entities.

This is a really complex area that trips up a lot of business owners! I've been dealing with similar multi-entity structures for years as a tax preparer, and I wanted to add a few practical considerations that might help. One thing that often gets overlooked is the administrative burden of maintaining multiple entities properly. You'll need separate bank accounts, separate books, formal resolutions for major decisions, and regular distributions documented properly. The IRS loves to challenge structures where the paperwork doesn't match the claimed entity separation. Also, consider the timing of distributions. If your LLC (taxed as partnership) makes distributions to the S-Corps, and then the S-Corps need to pay your salaries, you'll want to coordinate the cash flow carefully. I've seen situations where the S-Corp doesn't have enough cash to pay reasonable salaries because the LLC distributions weren't timed properly. One more thought - if you're considering converting the LLC to S-Corp status instead, remember that you'll lose the flexibility to make special allocations that partnerships allow. With an S-Corp, everything has to be pro-rata based on ownership percentages. I'd strongly recommend getting a second opinion from a CPA who specializes in multi-entity structures before making any changes. The tax savings can be significant, but the compliance requirements are real.

Don't forget that you need the CORRECT YEAR tax forms! I made this mistake when catching up. You can't use current year forms for past years - the tax laws change. You can find prior year forms on the IRS website here: https://www.irs.gov/forms-instructions (scroll down to "Prior Year Forms") Also, you should file paper returns for past years - most electronic filing only works for current year and maybe one year back.

I had a similar situation after being in the hospital for months. The key thing that helped me was getting my "Wage and Income Transcripts" from the IRS website. It shows all W2s and 1099s that were reported under your SSN for each year, so you know exactly what income the IRS already knows about. You can request them online here: https://www.irs.gov/individuals/get-transcript