Has anyone used the IRS Direct Pay system for making estimated payments? I'm trying to figure out if there's a way to see exactly when my payments were applied because I think some of mine might have been applied to the wrong quarters.

For your specific situation with the dramatic income jump from $14k to $88k, you're actually in a pretty favorable position regarding penalties. The "prior year safe harbor" rule means you only needed to pay $1,500 throughout the year (your prior year tax liability) in equal quarterly installments to completely avoid penalties. However, since you mentioned you "finally made all my quarterly estimated tax payments for the year," it sounds like you may have made late payments. If that's the case, you'll still benefit from the lower $1,500 threshold, but there will be some penalty for late payment. When filling out Form 2210, focus on Part II first to see if you qualify for any exceptions. If not, then Part III will calculate your penalty. For the annualized income method on Schedule AI, make sure you're entering your actual cumulative income through each quarter-end date, not dividing your annual income by 4. Given your uneven income pattern, this method will likely result in much lower required payments for Q1 and Q2. The $65 penalty you calculated using the annualized method sounds much more reasonable than the $720 penalty, especially if most of your income came in the latter half of the year.

Has anyone here used the IRS free e-file for partnership returns? I know you can e-file Form 1065 but I'm not sure if there are any special requirements when it's a final return with that "final return" box checked. Our partnership was pretty simple with just the two of us and minimal transactions.

Just wanted to add something that might help with your timing concerns. Since you closed in March 2024, you're actually not as pressed for time as you might think. Your 2023 partnership return (covering August-December 2023) is due by March 15, 2024, but you can file an extension until September 15, 2024 using Form 7004. For your final return covering January-March 2024, that would be due by March 15, 2025 (since it's a 2024 tax year return), so you have plenty of time to get that one right. Given that your total revenue was only $8,400 with $7,200 in expenses, you're looking at a pretty straightforward situation. The net income of $1,200 split between two partners means each partner would report $600 on their personal returns. Since the amounts are relatively small, the IRS is less likely to scrutinize the return heavily, but definitely still follow the proper procedures for the final return filings. One tip: keep detailed records of exactly when you ceased operations and any final expenses related to closing the business. These closing costs can often be deducted on your final return.

Does anyone know if trading losses from section 1256 contracts are considered investment income for the Net Investment Income Tax (3.8% tax)? My CPA says I can use these losses to offset other investment income subject to NIIT, but I'm not sure.

I went through a very similar situation last year with K-1s showing section 1256 losses, and I can share what I learned after consulting with a tax professional. The good news is that section 1256 contract losses from partnerships are generally NOT subject to the passive activity loss limitations, even if you're not actively involved in managing the partnership. This is because they're treated as investment/trading losses rather than passive business losses. For the basis limitation, if your combined capital accounts show $45k positive after the losses, you almost certainly have sufficient basis to claim the full $16k in losses. The key thing to watch for is whether you received any distributions during the year that might have reduced your basis below what's shown in the capital account. Here's what I'd recommend: 1. Report the 1256 losses on Form 6781 as you mentioned (60% long-term, 40% short-term) 2. Check if either partnership sent supplemental statements about distributions or basis adjustments 3. If you're still unsure about your exact basis calculation, consider keeping detailed records going forward since basis carries over year to year The partnership loss limitation rules are definitely confusing when you first encounter them, but for your specific situation with investment partnerships and 1256 contract losses, they're likely not going to be a major obstacle.

Has anyone successfully reported a company to the IRS for not sending 1099s? I'm in a similar spot with FOUR different companies who haven't sent mine. Getting really fed up with chasing them down every year.

I'd recommend filing with your bank statement records rather than waiting any longer. You've already made good faith efforts to get the 1099, and February is getting late in the filing season. One additional tip - when you report this as "Other Income" on Schedule 1, make a note in your records about the missing 1099 situation. If the IRS ever questions it, you'll want to show you attempted to get the proper documentation. Also consider sending one final certified letter to the company requesting the 1099 - this creates a paper trail showing you tried to resolve it properly. The most important thing is that you report the income accurately. The IRS cares more about you reporting what you earned than whether you have the physical form. Your bank statements showing $3,750 in deposits from this supplier are perfectly acceptable documentation.

Just a random thought - does anyone remember which tax software handled the COVID questions the best back in 2021-2022? I used H&R Block online and felt like their COVID sections were super confusing and poorly explained. Wondering if I should switch to something else this year.

Just to add to what others have said - you're definitely not alone in being confused about the COVID tax credits! The situation was really complicated because there were so many different programs with different eligibility rules and deadlines. For your specific situation in 2021 when you missed work due to COVID, unfortunately as an employee who used vacation time, you wouldn't have qualified for the self-employed sick leave credits that some people are mentioning. Those were specifically for people who were self-employed or independent contractors. The main things you might have missed would be the stimulus payments (Economic Impact Payments) - there were three total: $1,200 in 2020, $600 in late 2020/early 2021, and $1,400 in 2021. If you only remember getting one in 2020, you might want to check your old bank statements or tax transcripts to see if you received the other two. You can request free tax transcripts from the IRS website to verify what payments they have on record for you. If you did miss any stimulus payments, you'd need to amend your 2021 or 2020 returns to claim them as Recovery Rebate Credits, but as others mentioned, you're running up against the 3-year deadline for amendments. For your current 2024 tax return, there shouldn't be any COVID-related credits to claim.