I tried using the IRS site but got super confused. Is there a specific tutorial you followed to figure it out?

The IRS site is definitely not the most user-friendly, I'll admit. I found their tutorial in Publication 1220, but it's pretty technical. Here's what worked for me: create an account first, then go to the "Filing Information Returns Electronically" (FIRE) section. For simpler guidance, I actually ended up watching a YouTube tutorial someone made that walked through the process step by step. Just search "how to file 1099-NEC on IRS FIRE system" and you'll find several helpful videos that are much clearer than the official instructions.

Did you also e-file with the IRS or just mail the paper form? I'm trying to figure out the easiest way.

16 Do you have a link to this? I tried searching but came up with several different resources and I'm not sure which one you're referring to.

7 Sorry I should have included the link! It's called "Tax Procedure" by Morgan and is available through the University of Minnesota Scholarship Repository. Just Google "Morgan Tax Procedure Minnesota" and it should be the first result. The direct PDF is a bit hard to link, but that search should get you there. The most recent edition covers all the TCJA changes and has excellent citations if you want to dive deeper into specific sections of the tax code.

12 Bloomberg's materials are extremely comprehensive but probably not where you want to start if you're new to tax law. They're really designed for practicing tax attorneys and CPAs who already have a strong foundation. I'd recommend starting with something more accessible to build fundamentals, then using Bloomberg as a reference resource when you need deep dives into specific topics.

Thank you for sharing your experience! That's really reassuring. Did you use any specific tax software to file your amended return or did you work with a professional? I'm trying to figure out the best way to handle this correctly.

I used TurboTax to prepare the amended return since that's what I'd used for my original filing. It walks you through the process pretty well. I just entered the additional income and it recalculated everything. For peace of mind, I did have a tax preparer review it before submitting just to make sure I did it right. It was worth the small fee to have a professional double-check my work. If your situation is fairly straightforward (just missing income), you can probably handle it yourself, but having someone review it isn't a bad idea.

This isn't great advice. While it's true the IRS prefers to collect rather than prosecute, deliberately not reporting income is tax evasion. Your cousin was lucky. The IRS can and does pursue criminal charges in some cases, especially when they can prove intent.

Thanks for mentioning the SEP IRA option! Do you know what the contribution limits are compared to the Solo 401k? And is it true there's less paperwork involved? The Form 5500 requirement for Solo 401ks once you hit $250k sounds like a potential headache.

For a SEP IRA, you can contribute up to 25% of your net self-employment income with a maximum of $66,000 for 2023. With a Solo 401k, you can contribute $22,500 as an employee plus that same 25% of income as the employer contribution, still capped at $66,000 combined. The paperwork difference is significant. With a SEP, there's no annual filing requirement regardless of account size - just set it up once and make contributions. Solo 401ks require Form 5500-EZ filing once assets exceed $250,000, which isn't super complicated but is an extra annual task. For many small business owners, the simplicity of a SEP outweighs the potential for slightly higher contributions with a Solo 401k.

Did you have to start running payroll for yourself to contribute to the Solo 401k? That's the part that confuses me with my LLC.

Thanks for bringing this up - I hadn't considered the quarterly aspect. If I adjust my W-4 for the entire year instead of just Q1, would that help avoid the issue you're describing? And would applying my 2024 overpayment to 2025 count specifically toward my Q1 estimated payment?

Yes, adjusting your W-4 for the entire year would be much better from a quarterly perspective. The IRS generally considers withholding to be paid evenly throughout the year, even if your actual withholding varies between paychecks. This is different from estimated tax payments, which are definitely tied to specific quarters. When you apply an overpayment from your 2024 return to 2025, it's automatically applied to the first quarter estimated payment for 2025. So yes, that would cover your Q1 obligation. Just keep in mind that your 2024 return and any overpayment application might not be processed until after the Q1 deadline (April 15, 2025), so you'd want to make sure you're covered in case of processing delays.

This is the most important point! Opportunity cost is real. Even at just 4% in a high yield savings account, that's $1,600 in interest you're missing out on over a year. And that's without even considering investing it in the market for potentially higher returns. Also, with inflation being what it is, your refund next year will literally be worth less than getting the money in your paycheck today.