Do you use special software to calculate both scenarios? Seems like it would be time-consuming to do everything twice.

I use TurboTax and it has a feature that lets you compare filing jointly vs. separately. Most of the major tax software options have this comparison tool built in. You basically enter all your information once, and then it shows you the difference in refund/amount owed for both filing statuses. It takes maybe an extra 15-20 minutes to review both scenarios, but it's definitely worth it when you discover a difference of several hundred or even thousands of dollars. In our case, we've saved over $12,000 across those 7 years by choosing the optimal filing status each year rather than just defaulting to one option.

This is so important! My wife and I saved over $4k last year by filing separately specifically because of her federal student loans on IBR. The tax hit was about $1800 more filing separately, but her monthly payments dropped by $450 per month which saved us $5400 for the year.

Do you know if the H&R Block free version can handle a small 1099 income? Like I mentioned, I only made about $3,200 from side gigs, and I'm not sure if that pushes me into needing their paid version.

Unfortunately with H&R Block, any 1099 income usually requires an upgrade to their Self-Employed version which costs around $85 for federal filing alone. That's why FreeTaxUSA might be better for your situation since they handle 1099 income with their free federal filing. H&R Block is really only completely free if you have just W-2 income and take the standard deduction.

I used it in the pilot program last year and it was surprisingly good! Way more straightforward than I expected from a government service. The interface is simple but effective, and it's ACTUALLY free - no surprise fees or upsells. The only limitation is that it only works if your tax situation is relatively simple (W-2 income, standard deduction, some basic tax credits). I don't think it handles 1099 income yet, but they're expanding for 2025.

Thanks for sharing your experience! That's encouraging to hear. I've got a pretty simple situation, just a W-2 job, so sounds like it would work well for me. I'll definitely look into it when filing season comes around.

Is there any advantage to doing the electronic withdrawal instead of credit card? The fees for credit cards seem high but I'm wondering if there's another reason people choose direct withdrawal?

The main advantage of electronic fund withdrawal is that there are no processing fees, unlike credit card payments which charge around 2%. If you're paying a large tax bill, that 2% can add up fast. Another benefit is that with electronic withdrawal, you can schedule the payment for a future date (up to the filing deadline), while still filing your return early. This gives you more control over exactly when the money leaves your account. Credit card payments process immediately when you make them.

There are limits but they're pretty high. I think it's like 2 payments per processor, but each can be up to $99,999. So you should be fine with $12k. Just check your card's credit limit first, obviously.

Thanks for the info! That's good to know - my credit limit is $20k so I should be fine. Gonna get so many travel points from this payment!

Wow thanks for mentioning this! I had no idea about the 20% down payment requirement. Do you know if there are any exceptions to this rule? I'm cash poor right now which is part of my problem.

Yes, there's an exception if you meet the IRS low-income certification guidelines. If you qualify as low income, both the $205 application fee and the 20% down payment can be waived. The qualification is based on your household size and income compared to federal poverty levels. If you don't qualify as low income but still can't make the 20% down payment, you can choose the periodic payment option instead. This requires you to propose monthly payments and start making these payments while your OIC is being considered. The downside is if your offer is rejected, those payments won't be returned.

This is actually a misconception. Once an OIC is accepted and you fulfill the terms, that tax debt is settled permanently. However, there is a 5-year compliance period where you must file all required returns and pay all taxes on time. If you don't, the IRS can revoke the agreement and reinstate the original debt.

Thanks for the straightforward approach. In your experience, is it better to slightly overpay and get a refund, or try to nail the exact amount? And do you make adjustments during the year if your income fluctuates significantly?

I personally prefer to slightly overpay. The peace of mind is worth more to me than the interest I'd earn on that money elsewhere. I do adjust my payments throughout the year based on actual performance. Since I can see my real numbers in my accounting software, I'll recalculate before each quarterly payment. If Q1 was unusually profitable, I'll increase my Q2 payment accordingly. If business slows down, I might reduce a later payment. The key is documented methodology - as long as you can show you made a good faith effort to estimate correctly, the IRS tends to be reasonable.

Direct File doesn't support business returns yet, definitely not S-Corp returns (Form 1120-S). It's still limited to pretty basic individual returns. For S-Corps you'll still need to use tax software or an accountant.