Make sure you understand that the withholding compliance program isn't punishment - it's the IRS's way of making sure you don't end up with a huge tax bill at the end of the year. If your withholding is currently set too low, you might think you're doing fine throughout the year but then get hit with a big payment due in April. I went through this a few years back when I started working as a contractor alongside my regular job. The extra withholding hurt my monthly budget a bit, but it was better than owing thousands in April with penalties and interest.

Just to share a different perspective - I got put on this program a couple years ago and it ended up being a good thing for my finances in the long run. I was chronically underwithholding and getting hit with surprise tax bills and penalties. The program forced me to have the right amount withheld. After a year, I requested a review and got released from the program, but I kept my withholding at the higher level. Now I actually get small refunds instead of owing thousands every April. It was annoying at first but ended up being a helpful correction to my tax situation.

Quick practical advice that helped me when I missed the extended deadline last year: 1. Pay as much as you can estimate RIGHT NOW through IRS Direct Pay (google it) 2. Get your documents organized ASAP even if you can't complete the return 3. File within 60 days of the missed deadline if at all possible - penalties increase substantially after that 4. If you have a clean payment history for the last 3 years, request "First Time Penalty Abatement" when you do file 5. Include a letter explaining your situation with your late return The 3-year clean compliance history was key for me - got nearly all penalties removed with a simple phone call after filing late by about 3 weeks.

Something important no one mentioned - if you're truly self-employed, don't forget about your quarterly estimated tax payments! Even while sorting out last year's taxes, make sure you're making estimated payments for 2024 if you haven't been. The Oct 15 deadline happens to fall very close to the Q3 estimated payment deadline (Sep 16 this year). Missing estimated payments creates a whole separate penalty issue (underpayment penalty) that exists regardless of extensions. Even if you get filing penalties abated, underpayment penalties for missing quarterlies typically won't be forgiven.

As someone who purchased an EV last year, make sure you also check that the vehicle itself qualifies! There are price caps on the vehicles too - used EVs must be under $25,000 to qualify for the credit. And the dealer has to be a registered dealer, not just any private sale. Also, the credit is nonrefundable, meaning you need to have at least $4,000 in tax liability to get the full benefit. With your income level that shouldn't be an issue, but something to be aware of.

Important point nobody's mentioned yet - if you buy the EV for your rideshare work, it will be a business vehicle (at least partially). This affects how you claim both the EV credit AND your future business deductions. If you use the EV 100% for business, you can take the full credit but then you can't also claim the standard mileage rate for those miles in future years. You'd need to use actual expenses method instead. If you use it partially for personal use (like 70% business/30% personal), the situation gets more complex.

Something else to consider - if your rental property is in an opportunity zone, there might be additional tax benefits that interact with these passive activity loss rules. We bought a small rental in a designated opportunity zone last year and not only were we able to defer capital gains from another investment, but the way it affected our passive activity calculations was significant.

Here's another wrinkle - if any of your rental property is short-term (like Airbnb or VRBO where average stay is 7 days or less), it falls under different rules and might not qualify for the $25k special allowance at all regardless of your MAGI. Those properties are considered nonresidential and have different passive activity classifications. I learned this the hard way last year when I converted one of my long-term rentals to a vacation rental and discovered I couldn't use those losses against my other income even though I was below the MAGI threshold. Real estate tax rules are full of fun surprises!

One thing nobody mentioned yet - if you're on unemployment but doing gig work or freelancing to make extra money, you need to be paying quarterly estimated taxes on that income! I learned this the hard way last year when I drove for DoorDash while on unemployment and got hit with an underpayment penalty. The unemployment + self-employment combo can be really tricky tax-wise. Unemployment has the option for withholding but your gig work doesn't, so you have to plan ahead.

unemployment dosent hurt your return but it isnt free money either lol. I got laid off in 2023 and collected for 5 months. main things to know: 1) its taxable income. u will get a 1099-G form 2) withholding is OPTIONAL but smart!! check the box to withhold 10% federal 3) some states dont tax unemployment (mine does tho) 4) if u dont withhold u might need to make quarterly payments if its a lot of $$ i didnt withhold enough and owed $840 at tax time which sucked.