Oh man I hadn't even thought about state taxes. I'm in Virginia - do you know if they handle 401k distributions the same way the feds do?

Virginia generally follows the federal treatment of retirement distributions, so if it's taxable for federal purposes, it will likely be taxable for Virginia as well. However, Virginia has its own deductions and credits that might help offset some of the additional income. I'd recommend checking the Virginia Department of Taxation website or contacting them directly. You might need to file an amended state return as well. Virginia's statute of limitations for tax assessments is generally 3 years, so they could potentially come after you for this even if they haven't yet.

This is good advice. I set up an installment agreement for about $40k a few years ago. Process was actually pretty straightforward online for amounts under $50k, but for $65k you'll probably need to call and talk to someone. They'll ask about your monthly expenses and income to determine what you can pay.

Is this just a TaxSlayer issue or do other tax software companies do this too? I'm thinking of switching to TurboTax or H&R Block next year if they're more reliable with this.

Most tax software does this to some extent, but TaxSlayer seems particularly bad about it in my experience. TurboTax is slightly better - when they say "sent" it usually shows up in the IRS system within 2-3 days. H&R Block was about the same in my experience. The real issue is that these companies say "sent to IRS" when what they really mean is "sent to our processing center for eventual transmission to the IRS." It's misleading but pretty standard across the industry.

Thanks for sharing this! I just checked the IRS website and you're right - they do mention this timeframe. I guess I just expected it to be faster since everything else is digital these days. Makes me feel a bit better knowing it's normal.

That 3 week timeframe seems like a massive exaggeration though. I've used TurboTax for years and it usually shows up in the IRS system within 48 hours. Sounds like TaxSlayer might be slower at actually transmitting than they claim.

What's considered "reasonable" though? That seems super subjective. I do cybersecurity consulting and charge $175/hr but only take home about $80k in salary and the rest as distributions. Is there some formula or percentage that's considered safe?

The R&D tax credit is intriguing - I develop custom solutions for clients frequently. What kind of documentation is needed to support R&D credit claims? I keep detailed time logs already, but wonder if there's specific additional documentation I should be maintaining.

For R&D credits, you'll want to maintain several types of documentation. Time tracking is a good start, but break it down to show which hours were spent on activities that qualify (experimentation, development of new techniques, solving technical uncertainties) versus routine work. Keep design documents, project plans, and technical specifications that show the innovation challenges you were addressing. Emails or meeting notes discussing technical problems and proposed solutions are valuable. Document testing procedures and results, especially failed approaches that led to new directions. It's also helpful to have a narrative for each project explaining why it required innovation rather than just applying existing solutions.

Do you remember what address you sent them to? Is it the same as the regular tax return address or is there a special one for late filings?

The address depends on your location and whether you're enclosing a payment. The IRS has different mailing addresses for different states. You can find the correct address in the instructions for Form 1040 for the specific year you're filing, or on the IRS website under "Where to File." Don't use the current year's address for prior year returns - always check the address for the specific tax year you're filing. And definitely mail each year separately with its own envelope and postage. I learned that lesson the hard way when my bundled returns took an extra 3 months to process.

The first stimulus payment could be offset for child support, but the second and third payments were protected from offset for child support specifically. So you should still get those even with child support arrears. Though they can still be offset for other federal debts.

Do you have to file the same status for both state and federal? Like if we file jointly for federal can we still file separately for state? This is so confusing!

Most states require you to use the same filing status that you use on your federal return. However, a few states have exceptions. In general, if you file jointly for federal, you'll need to file jointly for state as well. The confusion is understandable! Tax rules vary by state, which is why it's important to check your specific state's requirements. For example, in my case with California, we had to calculate both scenarios completely since the state calculations can differ significantly from federal ones, but we had to use the same status for both.

Wait, seriously? I had no idea about this rule. I was planning to have my wife itemize her business expenses while I take the standard deduction. This might change our whole strategy.