Did you have to pay again to use TaxAct even though you'd already paid for the other service to create your PDFs? That seems like paying twice for basically the same thing?

Yes, unfortunately I did have to pay again for TaxAct. You're right that it feels like paying twice, which was frustrating. That's the downside of creating PDFs without e-filing capability built-in. Some services advertise "create tax documents" but don't clearly explain that those documents aren't suitable for e-filing. Next year, I'll just start with a service that includes e-filing from the beginning to avoid the double cost. The lesson I learned is to check if e-filing is included before starting the tax preparation process.

The problem with mailing is the processing time - my friend mailed hers in February and didn't get her refund until JUNE. E-file is typically processed in days not months. Plus there's always the risk of it getting lost in the mail.

My accountant never mentioned anything about earned income credit... what are the requirements for that? I make about $52,000 a year if that matters.

For the 2024 tax year (filing in 2025), a single parent with one child can qualify for the Earned Income Credit if they earn less than about $53,120, so you'd be right under the threshold! The maximum credit for your situation would be around $3,995, which could completely wipe out what you owe and possibly even give you a refund. Your accountant should have absolutely checked this for you. The qualifications are different from the child tax credit - your 17-year-old would still count for the EIC as long as they lived with you for more than half the year, have a valid SSN, and meet the relationship test. Definitely look into this or get a different tax preparer who's more thorough!

You can file an extension with Form 4868, but that only extends the time to FILE your return, not the time to PAY what you owe. You'll still accrue penalties and interest on any unpaid amount after the April deadline. BUT - the IRS has payment plans that are actually pretty reasonable. Look into the short-term payment plan (120 days) which has no setup fee!

I tried Cash App Taxes last year and it was pretty good for basic stuff. But be careful if you have any investments or slightly complicated situations - I had to switch halfway through because it couldn't handle some investment income properly. For just W-2 and student loans it should work fine though!

Cash App Taxes (formerly CreditKarma Tax) works great for straightforward returns including student loan interest deductions. It's completely free for both federal and state filing with no income limitations or surprise fees. If you have investment income like stocks or crypto, it can handle basic investment reporting but does have some limitations with more complex investment situations. For someone with just W-2 income and student loan interest, you'll have no problems at all.

OMG thank you for the warning! Did you end up owing more money because of their calculation error? That's my biggest fear - getting hit with penalties because the software messed up.

Yes, unfortunately I did end up owing about $320 more plus a small penalty because their software didn't properly account for some 1099 income I had reported. The most frustrating part was that I entered all the information correctly, but their system just calculated it wrong on the backend. The good news is that if you file an amended return promptly after discovering the error, the IRS is usually pretty reasonable about waiving major penalties, especially if you can show it was a software issue. But it's still a hassle you don't want to deal with.

Thanks for this clear explanation! Just to double check - even though the payments all come to my personal account, we should still file as a partnership rather than me paying my partner as a contractor? And we'd both still use Schedule C on our individual returns?

Yes, even though payments come to your personal account, you should still file as a partnership if you're truly operating as equal partners. The money coming to your account is just a logistical detail - the business relationship is what matters to the IRS. After filing Form 1065, you would each report your partnership income on Schedule E, not Schedule C. Schedule C is for sole proprietorships, while partnership income flows through Schedule E based on the information from your K-1.

Was it expensive to set up the LLC? I'm thinking about doing this with my podcast partner but worried about the cost.

That's a smart approach. Do you have a template for that letter you could share? I think being more formal about it from the beginning might help.

I don't have a shareable template handy, but it's pretty simple. My letter includes: 1) A brief explanation that tax law requires me to collect their tax information before making payments, 2) A deadline for returning the completed W9, 3) A statement that I cannot process payments without a completed W9 on file, and 4) A reminder that I'll be sending them a 1099 form by January 31st for any payments over $600. I also explain that protecting their information is important to me and describe how I store their documents securely. Most contractors appreciate the professionalism and clarity. Having this as part of your onboarding process for any new vendor relationship sets the right tone from the start.

You're absolutely right! This is a common mistake. For foreign individuals, you need Form W-8BEN. For foreign entities/businesses, you need Form W-8BEN-E. These forms certify that they're not subject to US tax withholding because they're foreign persons. The reporting requirements are also different. Instead of 1099s, you might need to file Form 1042-S for certain types of payments to foreign contractors. The rules get complicated depending on what services they're providing and where they're located.