Thanks for the info about TaxSlayer and IRS Direct Pay! I was wondering about making the payments online instead of mailing them. Does the Direct Pay system give you a confirmation that you can save for your records?

Yes, the IRS Direct Pay system provides a confirmation number immediately after your payment processes. You can print this confirmation page or save it as a PDF. I recommend doing both and keeping a folder (digital or physical) for each tax year with all your payment confirmations. They also send a confirmation email if you provide your email address during the payment process. I personally save these emails in a dedicated tax folder in my email account for easy reference later.

This is such an important point. I had the same thing happen in New York. Paid all my federal estimated taxes but completely forgot about state requirements. Ended up with almost $200 in penalties even though my actual state tax bill wasn't that high.

Thanks for mentioning this! Does the deduction for half the SE tax reduce the amount of SE tax I pay, or just my income tax? And do I need a separate form for that or is it part of the regular 1040?

The deduction for half of your SE tax doesn't reduce the SE tax itself, but it does reduce your income tax. It's considered an "adjustment to income" (sometimes called an "above-the-line deduction"), which means you get this benefit even if you take the standard deduction rather than itemizing. You don't need a separate form for this deduction. When you complete Schedule SE to calculate your self-employment tax, the form will automatically calculate the deduction amount. This amount then transfers to Schedule 1 of your Form 1040 as an adjustment to income. Tax software handles this transfer automatically, making it pretty seamless.

If your W-2 wages already hit the Social Security limit ($168,600 for 2024), you'd only pay the Medicare portion (2.9%) on your self-employment income. If your W-2 is below the limit, you pay the full SE tax on your net self-employment income, but only up to the point where your combined income hits that limit. Either way, you still calculate it on Schedule SE.

14 Are you 100% sure about this? I e-filed most of my 1099s but had to paper file a couple of them because of some issues with the system. Do I need a 1096 just for those paper ones, or for all of them?

21 You only need a Form 1096 for the paper-filed 1099s. If you e-filed most of them but paper-filed a few, you would complete a 1096 only for those paper-filed forms. So in your situation, you'd submit a 1096 with your paper 1099s, and in Box 3 you'd put only the count of those paper forms you're submitting (not including any e-filed ones). The 1096 acts as a transmittal/cover sheet only for the physical forms you're mailing in.

17 Yes, Box 5 on Form 1096 should be the total of all amounts from Box 1 of all the 1099-NECs you're submitting with that 1096. So if you have 5 contractors and the Box 1 amounts on their 1099-NECs are $1000, $2500, $750, $3200, and $900, you would put $8350 in Box 5 of the 1096.

7 That's a really good point. I did move about 8 months ago but stayed with the same employer. How would I go about checking if they have me in the right district?

5 You should be able to check your pay stub to see which school district they have you listed under. Look for an abbreviation or code that indicates your tax district. Then compare that with the school district that's trying to collect from you. If they don't match, that's your problem right there. You can also ask your HR or payroll department directly what school district they have on file for you. If there's a mismatch, you might have grounds to dispute the collection fees since the error wasn't your fault.

7 Well that explains why nobody told me about this when I started my job! So for future reference, how do I figure out what my school tax obligations are so this doesn't happen again? I definitely don't want another surprise bill.

Thanks for this advice - I hadn't even thought about checking my credit reports. Is there anything else I should do besides responding to the IRS letter and checking my credit? Should I put a freeze on my credit or file a police report?

Responding to the IRS letter should be your first priority to get your refund moving. After checking your credit reports, consider placing a fraud alert with the credit bureaus if you see anything suspicious. A credit freeze is a good precaution if you find evidence of actual identity theft on your reports. A police report generally isn't necessary unless you find concrete evidence of identity theft beyond just the IRS letter. Many of these flags are preventative measures by the IRS, not confirmation that theft has occurred. If your credit reports are clean, you likely just got caught in the IRS screening system, which has been extra sensitive lately.

Yes! This is actually a big red flag - it means someone definitely tried to file a fraudulent return using your information. You need to call the IRS identity theft hotline immediately at 800-908-4490. And file your legitimate return by paper as soon as possible with Form 14039 (Identity Theft Affidavit) attached.