The most important thing I learned from my tax debt situation is DONT IGNORE IT!! I buried my head in the sand for 2 years and my original $15k debt ballooned to over $28k with penalties and interest. For real tho, call the IRS yourself first. The people on the phone are actually pretty helpful if you're honest and polite. At minimum, get on a basic payment plan to stop the penalties from getting worse while you figure out your options.

I'm dealing with a similar situation - about $19,000 in back taxes from a consulting business that went under in 2022. The constant mail from the IRS was giving me panic attacks, but I finally called them directly last week using the number Isabella mentioned (1-800-829-1040). The IRS agent was actually really understanding and explained that I could set up an installment agreement for around $320/month based on my current income. She also mentioned that once I get current on payments, I might qualify for penalty abatement which could reduce the total amount. What really helped was having all my financial documents ready before calling - bank statements, pay stubs, and a list of monthly expenses. The whole process took about 45 minutes and I walked away with a manageable payment plan instead of the crushing anxiety I'd been carrying for months. Emma, definitely try calling them directly first before paying thousands to a tax relief company. The worst they can say is no, but in most cases they'd rather work with you than go through the collection process.

I think a lot of people are missing that there's a difference between the penalty for late FILING and late PAYMENT. Since you're a nonprofit that doesn't owe taxes, you're only dealing with the late filing penalty, which might give you more flexibility. Also worth checking if you qualify for first-time penalty abatement (FTA) which the IRS offers for organizations with a clean compliance history. You don't even need reasonable cause for that - just a clean record for the past 3 years.

Actually, @Jake Sinclair raises an important question about FTA for nonprofits. From my understanding, first-time penalty abatement is primarily available for income tax penalties, employment tax penalties, and certain excise tax penalties - but NOT for information return penalties like the Form 990 late filing penalty. The IRS treats information return penalties (which is what Form 990 falls under) differently from tax penalties. For Form 990 late filing, you really need to establish reasonable cause rather than relying on FTA provisions. That said, your situation does have some strong elements for reasonable cause: volunteer status, small organization with limited resources, and a significant life event (new baby). I'd focus your letter on those factors rather than trying to pursue FTA, which likely won't apply to your Form 990 situation.

just wanna add that your parents should probably claim you as a dependent if they provide more than half your support (housing, food, tuition help, etc). the american opportunity credit is worth up to $2500 and your parents can only claim it if they claim you as a dependent. since you only worked one month, you probably dont have enough income for the credit to be worth much to you personally. you'll probably still get a small refund from your summer job withholding regardless of whether youre a dependent or not. make sure to file regardless!

One thing nobody's mentioned that tripped me up last year - if u make under like $12,500 (the standard deduction amount) filing as single, you might not even need to file federally! But u should STILL file to get any withheld money back from those summer paychecks. For the 1098-Ts, whoever claims you as dependent gets to use those for the education credits. in my case, my parents let me file independent last year because they make too much to qualify for the education credits anyway (there's an income limit). but if ur parents can use the credits, usually best for them to claim you and you can still file to get ur withholding back on ur own return.

One option nobody mentioned yet - you could use a Print-on-Demand platform that handles tax for you. I use Printful through their Etsy integration, and Etsy collects and remits all the sales tax automatically. I just deal with my income taxes in France, and it's much simpler. The downside is you'll make less profit per item since these platforms take a cut, but the time and stress saved on tax compliance might be worth it when you're starting out.

As someone who went through this exact process last year, I'd highly recommend starting with the basics first. Before diving into tools or services, make sure you understand the fundamental difference between income tax (federal) and sales tax (state-level). For income tax, you'll likely need an ITIN (Individual Taxpayer Identification Number) from the IRS since you're not a US citizen. This lets you file the proper forms like 1040-NR for nonresident aliens. The process takes a few months, so start early. For sales tax, track your sales by state from day one. Most states have economic nexus thresholds around $100K in sales OR 200+ transactions per year. Keep detailed records because once you hit these thresholds, you'll need to register for sales tax permits in those states. Also consider getting a US bank account through services like Wise or Mercury - it makes payments from US customers much smoother and can help with your business legitimacy when dealing with suppliers.

Has anyone used the IRS's own QBI worksheet rather than online calculators? I found it in the Form 1040 instructions and it seems more detailed than most online tools. It definitely accounts for the thresholds and limitations we're discussing.

The IRS worksheet is definitely the most accurate approach, but you're right about it being complex. As a CPA who helps clients with QBI calculations regularly, I always recommend starting with the official worksheet to get the correct baseline calculation before using any online tools. One tip that helps avoid calculation errors: work through each section methodically and double-check that your "qualified business income" number excludes reasonable compensation from your S-corp. I see clients mess this up frequently - they include their W-2 wages in the QBI amount when it should only be the remaining business profits. For Dylan's original question about the $340K joint income with $250K from the S-corp - make sure you're clear on whether that $250K is before or after your reasonable compensation. If it's after, then you're on the right track. If it includes your salary, you'll need to subtract that first to get your actual QBI amount.