Quick tip: dont forget to set aside money for state income tax too if ur state has it!! I got destroyed my first year self employed bcause I only calculated federal. My state takes another 5% which I wasnt ready for.

As a tax professional, I want to emphasize that the previous commenters have given you excellent advice, but there's one crucial point I need to stress: you MUST start making quarterly estimated tax payments immediately if you haven't already! Since you're on track to make $54K this year, you should be paying estimated taxes quarterly (due dates are Jan 15, April 15, June 15, and Sept 15). The IRS expects you to pay as you earn, not wait until tax time. If you don't, you'll face underpayment penalties on top of your tax bill. For someone in your situation, I'd recommend setting aside about 25-30% of each payment you receive for taxes (federal income tax + self-employment tax + state if applicable). This might seem like a lot, but it's better to overpay slightly and get a refund than to be hit with penalties. Also, since this is your first year with significant income, definitely consider consulting with a tax professional or CPA who specializes in self-employment. The cost of their services (usually $300-500) will likely save you much more than that in proper deductions and tax planning strategies. The good news is that with proper planning and deductions (QBI deduction, business expenses, retirement contributions), your actual tax burden will be much lower than your initial calculation!

I gotta ask - does it matter what kind of business you have? I run a small lawn care service and charge sales tax on products (fertilizer, plants, etc.) but not on the service portion. Am I supposed to be charging tax on everything?

I'm dealing with something similar right now with my food truck business. Been operating for 2 years and just found out I should have been collecting sales tax on prepared food in my state. The panic is real! One thing I learned is that you definitely want to get registered for a sales tax permit ASAP even before you figure out the back taxes situation. Continuing to operate without one while you're sorting out the past issues just makes things worse. Also, keep detailed records of EVERYTHING moving forward - sales by location, exempt vs taxable items, etc. I started using a POS system that automatically calculates and tracks sales tax by jurisdiction since I operate in multiple cities. It's been a lifesaver for staying compliant going forward while I work through my past issues. The voluntary disclosure route really does seem to be the way to go based on what I'm reading here. Better to rip the band-aid off and deal with it head-on than live in constant fear of getting caught.

I inherited a nonqualified annuity last year too, and my situation was slightly different. My tax preparer said I absolutely needed the 1099-R to properly file, even though taxes were withheld. Has anyone used H&R Block or TurboTax for this kind of situation? I'm trying to figure out which would handle this better.

I'm dealing with a very similar situation with my grandmother's nonqualified annuity that I inherited last year. The missing 1099-R is definitely a red flag - I received mine from the insurance company even though they withheld the correct amount of taxes. Here's what I learned from my tax preparer: even if the annuity company calculated and withheld taxes correctly, you still need to report the distribution on your tax return. The 1099-R shows the IRS that you properly accounted for the income and any withholding. I'd strongly recommend calling Nationwide again and asking specifically for the tax reporting department. When I had issues getting my 1099-R, I had to escalate beyond the general customer service reps. They should be able to reissue it or at least explain in writing why one wasn't generated. Don't spend that money you set aside until you get this resolved - better safe than sorry when it comes to the IRS. The fact that taxes were withheld is good, but without proper documentation, you could run into issues during filing or if audited later.

Has anyone actually tried to submit an amendment past the 3 years just to see what happens? I'm curious if they automatically reject it or if there's some review process where they might consider special circumstances.

I'm sorry to say this, but based on everything discussed here, your mother is unfortunately outside the refund window for her 2018 medical expenses. The 3-year statute ran out in April 2022 (assuming she filed by the original due date in 2019). However, don't give up entirely on tax savings! A few things to consider: 1. **Future planning**: Make sure you're tracking all her ongoing medical expenses for current and future tax years. If she's still having significant medical costs, you don't want to miss them again. 2. **State taxes**: Some states have different amendment periods than federal. It might be worth checking if your state allows longer amendment windows. 3. **Other missed deductions**: While you're reviewing her situation, check if there are any other deductions or credits from more recent years (2021-2024) that might have been missed and are still within the amendment window. The $12K potential refund stings, but unfortunately the IRS is extremely rigid about these deadlines. Even filing the amendment now would likely just result in a rejection letter citing the statute of limitations. Better to focus that energy on making sure nothing gets missed going forward.

Did you check box A, B, C, D, or E on the form? If you're claiming any of the special conditions for waiver (like I had to when I had an unexpected wealth event mid-year), you need to attach an explanation letter along with the form. The IRS was super picky about having that documentation when I filed my 2210.

Based on everyone's responses, it sounds like the most likely issue is that you need to use 110% of your 2022 tax liability for line 5 since your AGI was over $150,000. But before you resubmit, I'd suggest double-checking a few things: 1. Make sure you're looking at the actual tax amount from line 16 of your 2022 Form 1040 (not line 24 which includes additional taxes) 2. Calculate both 90% of your 2023 tax ($13,423.50) AND 110% of your 2022 tax, then use whichever is smaller 3. If you haven't already, consider whether any of the waiver conditions apply to your situation (boxes A-E on the form) The good news is that once you get the calculation right, the IRS should process your refund relatively quickly. I went through something similar last year and it was frustrating, but getting that line 5 calculation correct based on your income level should resolve the issue.