Does anyone use any good spreadsheets or apps to track all this? I'm making about $5,500/month freelancing and setting aside 25% for taxes but have no idea if that's right. Honestly tax time is so stressful every year.

Setting aside 25% might be close, but it really depends on your specific situation! With $5,500/month ($66k annually), you'll want to factor in the QBI deduction which can significantly reduce your income tax burden. Here's a rough breakdown for your income level: - Self-employment tax: ~15.3% of net income (after the 0.9235 adjustment) - Federal income tax: Varies by deductions/credits, but likely 12-22% bracket - State tax: Depends on your state I'd recommend using a more precise calculator or spreadsheet that accounts for the QBI deduction, standard deduction, and any business expenses you have. You might actually be over-saving, which means you're missing out on cash flow you could be using for business growth or personal expenses. The stress is real though - I used to lose sleep over whether I was setting aside enough. Having a more accurate system has been a game changer for my peace of mind.

Can someone tell me if this Notice 2023-21 lookback extension also applies to business returns? I have a small LLC and filed a separate business return for 2019. Wondering if I can still amend that if needed.

This is really helpful information! I had no idea about this extension. I'm definitely going to go back and review my 2019 return - I remember being super stressed that year with a job change and probably rushed through it. Quick question though - when you file an amended return using Form 1040-X, do you need to include copies of all the supporting documents again, or just the new ones for the changes you're making? I don't want to mess this up and delay my refund even more. Also, does anyone know roughly how long amended returns are taking to process right now? I know regular returns were backed up for a while, wondering if amendments are facing similar delays.

Just adding another perspective - I think the principle here is that the income has been "constructively received" in tax terms. You have the right to the money, even if there are conditions on when you can physically get it. It's like if your employer puts money in your 401k - you're taxed on the match even though you can't touch the money until retirement. Or if a client writes you a check in December but you don't cash it until January - it's still income in the year it was available to you.

I actually went through something very similar with my old Twitch affiliate account! Had about $35 sitting there that I couldn't access because I stopped streaming and never hit the $100 payout minimum. When I got the 1099, I was so confused because I literally never received any money. After doing some research, I learned that platforms like YouTube, Twitch, etc. are required to report earnings once they reach certain thresholds (usually $600+ total), even if they haven't paid you yet due to their internal payout minimums. It's frustrating because you're paying taxes on money you may never see, but legally you do have to report it. The silver lining is that if you ever do reactivate your channel and reach the payout threshold, that $24 is already "tax-paid" so you won't owe anything additional on it when you finally receive it. Still annoying though - wish these platforms would just pay out everything when accounts go inactive!

FYI - there's also the National Taxpayer Advocate office that handles more systemic issues. Different from the local TAS offices that handle individual cases. Prob not what you need rn, but good to know the diff. Also, TAS has been super backed up since COVID started and they never fully recovered their staffing. Might be worth trying to reach a regular IRS agent first to check your amended return status before escalating to TAS.

I actually got through to TAS about 6 weeks ago using that 1-877-777-4778 number. Here's what worked for me: I called at exactly 7:00 AM EST on a Tuesday and got connected after about 25 minutes on hold. The agent was really helpful once I explained that my amended return had been sitting for 5 months with no movement despite multiple calls to regular IRS lines. One thing that helped my case was that I had documentation showing the delay was affecting my ability to get a mortgage pre-approval. TAS seems to prioritize cases where you can show concrete financial impact from the delay, not just general frustration (though trust me, I was plenty frustrated too). Also, make sure you have your Individual Taxpayer Identification Number (ITIN) or SSN, the tax year in question, and your most recent contact with the IRS documented before you call. They'll ask for all of this upfront to verify your case qualifies for their assistance. Good luck - the wait times are brutal but once you get through, they're actually pretty effective at cutting through the red tape!

Has anyone mentioned withholding yet? When I did my IRA withdrawal last year, I had them withhold 35% for federal taxes right off the top. That way I didn't have to do that recursive calculation - the withholding counts as if it was paid evenly throughout the year, so no underpayment penalties. You just fill out the form saying what % you want withheld.

One thing that might help reduce your overall tax burden is checking if you qualify for any deductions or credits that could offset the increased income from your IRA withdrawal. Since you mentioned you're divorced, make sure you're not missing out on head of household filing status if you have dependents, or consider if you can bunch itemized deductions (like charitable contributions or state taxes) into the year you take the withdrawal to maximize their benefit. Also, don't forget about estimated quarterly tax payments! If you're taking this withdrawal mid-year and your withholding plus regular paycheck taxes won't cover the full liability, you'll need to make estimated payments to avoid underpayment penalties. The IRS generally wants you to pay 90% of current year taxes or 100% of last year's taxes (110% if your prior year AGI was over $150k) throughout the year. Have you run the numbers on what your effective tax rate would be if you spread this over 2-3 years instead of taking it all at once? Even if it delays your home purchase slightly, the tax savings could be substantial enough to make it worthwhile.