Something no one has mentioned yet about QBI - there are income thresholds where the calculation gets MUCH more complicated. For 2025, if your taxable income exceeds $191,550 (single) or $383,100 (married filing jointly), the QBI deduction starts to phase out for certain businesses. If your business is a "specified service trade or business" (like health, law, accounting, consulting, financial services, etc.), you could lose some or all of your QBI deduction when you hit those thresholds. For other businesses, the calculation becomes based on W-2 wages paid and property owned. Since you're building a spreadsheet, you might want to include a "warning flag" if your income approaches these thresholds so you know when you need to consult a tax professional!

Great discussion here! As someone who struggled with these exact calculations when I started freelancing, I wanted to add a few practical tips for your spreadsheet: 1. **Create separate cells for each step** - don't try to do everything in one formula. Break it down like: - Cell A: Gross Revenue ($135,000) - Cell B: Business Expenses ($25,000) - Cell C: Net Earnings (A-B = $110,000) - Cell D: SE Tax (C * 0.9235 * 0.153 = $15,543) - Cell E: Half SE Tax (D/2 = $7,771.50) - Cell F: QBI (C - E = $102,228.50) - Cell G: QBI Deduction (F * 0.20 = $20,445.70) 2. **Add validation checks** - I include formulas that flag potential errors, like if my QBI calculation seems off compared to net earnings. 3. **Build in the income thresholds** that Jamal mentioned - have your spreadsheet automatically warn you if you're approaching the phase-out limits for QBI. The key insight that took me forever to understand: retirement contributions reduce your *taxable income* but not your *QBI*. They're calculated independently and both subtracted from your income. Once I got that straight, everything else fell into place!

One thing nobody mentioned - you need to get a Social Security number for your baby ASAP after birth to claim them on your taxes. The hospital will usually give you the paperwork to apply, but if not, you need to go to the Social Security office with the birth certificate. You absolutely cannot claim any child-related credits without their SSN.

Since you're expecting in July and will be working only 8 months this year, there's another important consideration - make sure you understand how your reduced income will affect your tax situation. With around $50k in actual earnings (8 months of $75k), you might qualify for the Earned Income Tax Credit (EITC) which phases out at higher incomes but could be significant with one child and lower income. Also, regarding your student loan interest - you can deduct up to $2,500 per year in student loan interest payments, and with $3,500 in payments annually, this could be a nice deduction. Just make sure you get the 1098-E form from your loan servicer. For your FSA question - you can't double-dip on medical expenses. If your FSA covered something, you can't also claim it as a medical expense deduction. But any out-of-pocket costs beyond what FSA covers could potentially be deductible if you itemize and they exceed 7.5% of your AGI. One more tip - keep detailed records of everything related to childcare payments to your aunt. You'll need her SSN, receipts, and documentation that this is legitimate childcare (not just family help) to claim the Child and Dependent Care Credit. This credit can be up to $1,050 for one child under 13.

As someone who started a tax business 2 years ago, I'd recommend looking at TaxAct Professional. It's significantly cheaper than the big names but handles everything you mentioned. The learning curve is steeper than some others, but the per-return cost structure worked better for me when starting out. I only paid for what I actually used instead of a huge upfront cost.

I went through this exact same decision process when I started my practice 3 years ago. After trying several options, I settled on UltimateTax Software and it's been fantastic for my small business needs. What sold me was their flat-rate pricing with no per-return fees - you pay one annual fee and can prepare unlimited returns. This was crucial when I was starting out and unsure about client volume. Their federal and state packages are comprehensive, and they handle all the special forms you mentioned including K-1s, injured spouse, and amendments. The tech support is excellent - they have extended hours during tax season and I've never waited more than 10 minutes to speak with someone who actually knows the software. They also provide free training webinars throughout the year which helped me get up to speed quickly. One thing that really impressed me was their bank product integration. They work with multiple financial institutions for refund advances and transfers, and the fees are very reasonable. The processing is seamless and my clients love the quick turnaround. The software itself is intuitive once you get the hang of it, and their diagnostic tools catch errors before you e-file. I'd definitely recommend getting a demo to see if it fits your workflow.

This is such a complex situation, and I really appreciate everyone sharing their experiences here! As someone who's been dealing with similar back tax issues, I wanted to add a few thoughts. First, regarding the statute of limitations - it's worth noting that while you generally can't get a refund after 3 years, the IRS can still apply overpayments as credits to other tax years even beyond that timeframe in certain circumstances. The key is how you handle the filing process. One thing I learned the hard way is that the ORDER you file multiple years matters tremendously. If you file 2017 first and request the overpayment be applied to 2018, then file 2018 showing that credit, it's processed differently than if you file them simultaneously or in reverse order. Also, don't forget about estimated tax payments you may have made for 2019 that could be applied back to 2018 if needed. The IRS has more flexibility with moving payments between adjacent tax years than most people realize. I'd strongly recommend getting everything professionally reviewed before filing - the potential savings from doing this right the first time far outweigh the cost of professional help. Missing these nuances could cost you thousands in lost credits or unnecessary penalties.

I've been following this thread as someone who went through a very similar situation with unfiled returns from 2016-2018. One thing I want to emphasize is the importance of acting quickly once you decide to file these old returns. The longer you wait, the more interest and penalties accumulate, and you risk losing additional credits. I procrastinated for an extra year after discovering my situation, and it cost me about $800 in additional interest that I could have avoided. Also, something that helped me was creating a simple spreadsheet tracking all my payments, estimated taxes, and what I owed for each year before I started filing. This gave me a clear picture of exactly how much I could recover and helped me set realistic expectations. When I finally filed, I was able to recover about 60% of what I thought I'd lost to the statute of limitations by following a strategic filing order and including the right forms. The key was understanding that while I couldn't get cash refunds for the older overpayments, I could still use them to offset other tax debts. Don't let the complexity paralyze you - even an imperfect filing is better than continuing to let these returns sit unfiled. The IRS is generally more willing to work with taxpayers who are making an effort to get compliant.

Has anyone used the IRS's "Offer in Compromise" program? I've heard you can settle for way less than you owe. With $70k in tax debt maybe that's better than a payment plan?

I went through something very similar - owed about $85k in back taxes after a stock windfall, then got laid off and couldn't deal with it for years. The stress was unbearable. Here's what I learned: Don't pay those tax resolution companies. I almost did the same thing and would have wasted $8k+ for services I could handle myself. First, get those returns filed immediately with your CPA. This stops the failure-to-file penalties which are brutal (5% per month vs 0.5% for failure-to-pay). Second, that $20k payment you made is definitely in the IRS system. When you file your 2020 return, make sure your CPA applies it to reduce your balance. You can verify this later with an account transcript. Third, with your new income level, you'll likely qualify for a standard installment agreement. The IRS will want financial disclosure (Form 433-F) for amounts over $50k, but they're usually reasonable about payment terms if you're compliant and honest about your situation. I ended up getting penalty abatement for about 60% of my penalties under the "reasonable cause" provision - the job loss and financial hardship were legitimate reasons. Saved me over $15k. The key is getting current with filing first, then dealing with collections. The IRS is actually pretty workable once you're compliant and communicating with them directly. Don't let the debt sit unfiled any longer - it only gets worse. You've got this! The fact that you're employed again and addressing it now puts you in a much better position than you think.