Does this actually work? Wouldn't you still get penalized for those early quarters where you didn't pay enough? I thought the penalty was calculated per quarter, not just at the end of the year.

The underpayment penalty is actually calculated for each quarter separately, but it's based on how much you're short for the required payment for that period. So you're right that you could face some penalty, but it's usually quite small. For me, the calculation worked out to a penalty of about $240 on a $120,000 income. That was worth it for me to maintain better cash flow throughout the year. It's really a business decision - pay the mathematically correct amount each quarter or pay a small penalty for the flexibility. Form 2210 will calculate the exact penalty amount.

Yep, EFTPS works great for this! I use it and you can definitely schedule different payment amounts for each quarter. You can even make extra payments anytime you want. The interface looks like it's from 1995, but it's actually really reliable.

Thanks for confirming! I'll set it up this weekend. Does it send reminders before the scheduled payments go through? I'm worried about forgetting and not having enough in my account when it processes.

Does filing that form actually work? I'm worried about creating bad blood with my former employer if I report them, but I also really need my tax documents.

Filing Form 3949-A definitely gets results in most cases. The IRS takes these reporting failures seriously because they affect tax compliance across the board. You can actually mention to your employer that you're considering filing this form before you actually do it - often just the knowledge that you're aware of your rights and the reporting process is enough to motivate them. As for creating bad blood, I understand the concern, but remember that they're legally required to provide these documents. You're just asking them to fulfill their legal obligation, not doing anything unreasonable. Your financial well-being and tax compliance shouldn't be compromised because they're dragging their feet.

I tried doing this but the IRS website is so confusing. Is there a specific section where I can find tax documents that have been filed? I created an account but can't find my way around.

Wait, are you serious?! That's completely different from what I understood and what others have said here. Do you have a source for this? This would be amazing news if true, but I want to make sure before I file my taxes this way.

Yes, absolutely serious. The provision was included in the COVID-related Tax Relief Act of 2024, which clarified that "no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income." The IRS then issued Revenue Ruling 2025-02 confirming this treatment. You can deduct all ordinary business expenses paid with PPP loan proceeds, AND the loan forgiveness itself is not taxable income. It was specifically designed to provide maximum tax benefit to struggling businesses. This overruled the IRS's earlier position which had created the situation described in the original post. Congress decided businesses needed the additional tax relief.

For partial PPP forgiveness, only the forgiven portion receives the special tax treatment. The unforgiven portion is treated as a regular loan. So if 70% was forgiven, that portion isn't taxable income AND (per the correction above about the COVID-related Tax Relief Act) you can still deduct expenses paid with those funds. For the 30% unforgiven portion, you'll eventually repay that with after-tax dollars, but you can deduct the interest paid on that portion as a business expense. Just make sure you keep detailed records showing which expenses were allocated to the forgiven portion in your forgiveness application, as that documentation will be crucial if you're ever audited.

Thanks for the suggestion! I'm definitely planning to double-check everything once my paper W2 arrives. Did you have any issues with getting your CA tax refund? I'm worried my previous employer might have kept withholding Iowa taxes even though I was living in California.

Getting my CA refund took forever but I did get it eventually. Like 4 months after I filed! You should check your last paystub from Iowa - it'll show if they were still withholding state tax. If they did keep taking Iowa tax after you moved, you'll need to file for a refund from Iowa and make sure you're paying the right CA taxes for that period. The annoying part is proving your residency change date - keep any lease agreements, utility bills, etc from when you first moved to CA.

This is great to know! So many people don't realize they can often get their W2 electronically through their company portal weeks earlier. I always get mine from my company's ADP system in mid-January but the paper copy doesn't show up until February.

Thanks for being so direct! You're right, I'm definitely not going back to that preparer. Do you have any tips on how to find someone who actually specializes in real estate tax situations? I'm worried about just finding another generic tax person who might not understand these specific issues.

Look for a tax professional who is either a CPA or EA (Enrolled Agent) who specifically lists real estate investors as a client focus. Ask potential preparers how many clients they have with rental properties and LLCs. A good test question is to ask them to explain the differences between Schedule E reporting and S-corporation treatment for rental income - if they can't clearly articulate the pros and cons of each approach for your specific situation, keep looking. I also recommend checking with local real estate investor associations or networking groups - these often have recommended tax pros who serve their members. These professionals typically understand both the tax advantages and pitfalls specifically related to rental properties and real estate investments.

Yes, this happened to me! Got a notice about 8 months after filing saying my 1120S was "filed in error" since they had no record of a valid S-election. They gave me 60 days to either file Form 2553 late (with reasonable cause) or file the correct return type. The lesson I learned is don't wait for their letter - it takes them forever to catch these things, and meanwhile you're continuing to file incorrectly.