Has anyone mentioned the Failure to File penalty yet? It's 5% of unpaid taxes for each month your return is late, up to 25%. If you're more than 60 days late, minimum penalty is either $435 (for returns due after 1/1/2020) or 100% of the tax owed, whichever is less. Since you mentioned 1099 income in your reply, you definitely have unpaid taxes, which means these penalties are already applied to your account in the IRS system. The sooner you file, the sooner you can work on resolving this!

Clay, given that you had $25-28k in 1099 income for those unfiled years, you're definitely looking at owing taxes AND penalties that have been accumulating since those returns were due. The self-employment tax alone on that income would be around $3,500-4,000 per year, plus regular income tax. Here's what I'd recommend as your next steps: 1. File those back years immediately - every month you wait adds more penalties 2. When you file, consider requesting First Time Penalty Abatement if you've been compliant since then (sounds like you have been with 2021-2023) 3. If you can't pay everything at once, set up a payment plan with the IRS - they're much more cooperative when you come forward voluntarily The good news is that filing those returns might actually help your FAFSA situation too. The Department of Education can flag accounts with unfiled tax obligations, and having everything properly filed removes any potential complications with your financial aid eligibility. Don't let your tax preparer's casual attitude discourage you - this is serious business with the IRS, and getting compliant now will save you money and stress in the long run.

One thing I haven't seen mentioned yet is the importance of tracking your basis properly for the converted Broadcom shares. Since this is a tax-free reorganization, your original VMware cost basis carries over, but you'll need to adjust it for the conversion ratio. For example, if you had 100 VMware shares with a $50 basis each ($5,000 total), and you convert at the 0.2520 ratio, you'll end up with 25.2 Broadcom shares. Your total basis remains $5,000, but now it's spread across 25.2 shares, giving you a per-share basis of about $198.41 for the Broadcom stock. Make sure to keep detailed records of this conversion because when you eventually sell the Broadcom shares, you'll need this adjusted basis to calculate your gain or loss correctly. Your brokerage should handle this automatically, but it's good to double-check their math and keep your own records as backup.

One additional consideration that might affect your decision is the potential for state tax implications. While the federal tax treatment is fairly clear (cash portion taxable, stock conversion tax-deferred), some states have different rules for corporate reorganizations. For example, if you live in a state like California or New York, they might have specific provisions about how they treat stock-for-stock exchanges in mergers. Some states don't automatically conform to federal tax-free reorganization rules, which could mean you owe state taxes even on the conversion portion. I'd recommend checking with your state's tax authority or a local tax professional to understand any state-specific implications before making your election. This could be especially important if you're in a high-tax state, as it might influence whether the 50/50 option is as advantageous as it appears from a federal tax perspective. Also, don't forget to consider the timing - if you're close to year-end, the cash portion will be taxable in 2025, so make sure you have adequate withholding or estimated tax payments to cover any additional tax liability.

11 When I first started my business, I made the mistake of just applying 15.3% directly to all my earnings and ended up overpaying by quite a bit! The 0.9235 factor is actually a benefit for us self-employed folks. Quick tip: Don't forget that after calculating your SE tax, you also get to deduct HALF of that amount from your income for calculating your income tax. That's another benefit most people miss! It's on Schedule 1 of your 1040.

The confusion around the 0.9235 multiplier is totally understandable! I had the same question when I first started freelancing. Think of it this way: when you're a regular employee, your employer pays half of your Social Security and Medicare taxes (7.65%) and you pay the other half (7.65%). As self-employed, you're both the employee AND the employer, so you owe the full 15.3%. But here's the key part - employees effectively get a "discount" because their employer's portion (7.65%) is tax-deductible to the business. The 0.9235 factor essentially gives you that same advantage by reducing the income subject to SE tax, which mathematically works out to be equivalent to making half of your SE tax deductible. So instead of paying 15.3% on your full income (which would be unfair compared to employees), you pay 15.3% on 92.35% of your income, resulting in an effective rate of about 14.13%. It's actually designed to keep things fair between employees and self-employed individuals!

One thing to consider for next year - you might want to adjust your withholding on your W-4s since your tax situation has changed significantly. If you're owing a lot now, updating your withholding could help prevent a big surprise next year. The IRS has a Tax Withholding Estimator tool on their website that can help with this.

I feel your pain! This exact thing happened to us when we got married in 2023. We went from getting a nice EIC refund to owing money, and it was such a shock. One thing that helped us was really diving into ALL the credits and deductions we were now eligible for as a married couple. Yes, we lost the EIC, but we found some other benefits that partially made up for it: - The Child and Dependent Care Credit has higher income limits for married couples - We could contribute more to retirement accounts (like IRAs) which reduced our taxable income - Some education credits we hadn't been aware of - Better health insurance premium tax credits I'd strongly recommend getting a second opinion from another tax preparer or using one of the online tools mentioned here. Your current preparer sounds like they didn't fully explore your options. Sometimes paying for a more thorough consultation upfront can save you hundreds or even thousands in the long run. Also, don't forget you can amend previous returns if you discover you missed anything! We ended up amending our 2023 return after finding some missed deductions and got back an additional $1,100.

Has anyone dealt with getting a refund for over-garnished amounts? The IRS took about $350 more than I actually owed before they processed my payment and sent the release to my employer.

I went through this exact same situation about 6 months ago! The IRS continued garnishing my wages for almost a month after I paid off my tax debt. Here's what finally worked for me: 1. **Document everything** - Keep your payment confirmation, bank statements showing the payment cleared, and records of any calls you make to the IRS. 2. **Call early and be persistent** - I found calling right at 7 AM gave me the best chance of getting through. Use the number 800-829-1040 and when you get the menu, press 1 for English, then 2 for personal tax issues, then 3 for payment questions. 3. **Ask for a payment tracer** - When you finally reach someone, ask them to do a "payment tracer" on your account. This helps locate your payment if it wasn't properly applied to stop the garnishment. 4. **Request expedited release** - Explain that the continued garnishment is causing financial hardship (mention the rent situation). They can sometimes expedite the release process. In my case, it turned out my payment had been received but wasn't properly coded to release the garnishment. Once they corrected it, the release was sent to my employer within 48 hours. The whole ordeal took about 5 weeks total, but I did get refunded the excess amount they garnished after my debt was paid. Don't give up - you WILL get this resolved!