Quick question for anyone using automated tax solutions - do they handle local taxes in states like Colorado where home-rule cities have their own separate tax systems? I've found those especially difficult to manage.

The destination-based system also reflects a fundamental principle of tax policy - that taxes should be paid where public services are consumed, not just where they're produced. When you ship a product to a customer in another state, that customer benefits from local infrastructure (roads for delivery), emergency services (if there's an issue with the product), consumer protection laws, and courts (if there's a dispute). From an economic fairness perspective, it makes sense that the tax revenue goes to the jurisdiction providing those services to your customers. Otherwise, you'd have states with major distribution centers or tech companies collecting all the sales tax revenue while customer states bear the costs of supporting those purchases. I know it's complicated for businesses, but the alternative would essentially allow customers to avoid their local sales taxes just by shopping online, which would devastate brick-and-mortar stores that have to compete with tax-free online retailers. The current system at least levels the playing field between online and local businesses.

Just amended my 2023 return last month. Used turbo tax and it wasnt too bad tbh

Just went through this exact situation last year! You definitely need to file the amendment separately - there's no way to combine tax years. I made the mistake of waiting thinking it would be easier and ended up paying extra interest. The good news is that if you owe money, the sooner you file the amendment, the sooner the interest stops accumulating on the additional amount. If you're getting a refund from the amendment, you'll want to file ASAP to get that money back. Don't procrastinate like I did!

KeyBank customer with successful deposit this morning from a 3/22 DDD. The deposit hit my account at exactly 04:37 EST. According to the ACH transaction details, the payment originated through the Treasury's Automated Standard Application for Payments (ASAP) system and was processed through the Federal Reserve's FedACH service before arriving at KeyBank's internal settlement system. Can you verify if your Return Transcript shows TC 846 with the correct account number? Sometimes there can be a mismatch between what's displayed on WMR versus what's on your actual transcript.

KeyBank customer here with a 3/22 DDD - still nothing showing up in my account as of this morning. I've been banking with them for about 3 years and they're consistently slow with tax refunds compared to other banks my friends use. What's frustrating is that I can see pending transactions for everything else (like my paycheck that comes Friday but shows pending Wednesday), but tax refunds seem to be handled differently. I called their customer service yesterday and they basically said "wait until the official date" without being able to tell me if they've even received anything from Treasury yet. At this point I'm just setting a phone reminder to check tomorrow morning and trying not to stress about it. Thanks for posting this - at least I know I'm not the only one dealing with KeyBank's slow processing!

I'm so confused about this whole thing. My daughter's college is asking for a 2024 non-filing verification, but when I called the IRS they said I can only get a letter for 2023 or earlier years right now. How can they ask for something that doesn't exist yet??? Is everyone in financial aid just confused about which tax year they actually need??

Just wanted to share another tip that helped me - if you're having trouble with the online IRS verification system, try clearing your browser cache and cookies completely, then try again. I was getting weird errors for weeks until I did this. Also, make sure you're using the exact same name format that's on your Social Security card - even small differences like "Jr." vs "Junior" can cause the system to reject your identity verification. If you're still stuck after trying all the suggestions here, consider reaching out to your local VITA (Volunteer Income Tax Assistance) site. They often have direct contacts at the IRS and can sometimes help expedite these requests for students facing financial aid deadlines. Many colleges also have VITA programs right on campus during tax season. Don't give up - I know it's frustrating but there are definitely ways to get this sorted out!

Warning from someone who made an expensive mistake: Be careful about rushing into an LLC with S-Corp election just for tax savings! I did this in 2022 without really understanding all the requirements. Yes, I saved about $8k in self-employment taxes, but then got audited because my "reasonable salary" was too low compared to my distributions. Ended up owing back taxes PLUS penalties. The IRS is watching this area closely. The rule is that your salary must be "reasonable" for your industry and the work you do. You can't just pay yourself $30k and take $200k in distributions if comparable positions would pay $120k. Also, the administrative hassle is real. Quarterly payroll filings, extra tax forms, higher accountant fees, etc. For me it added about $3,200 in extra costs annually.

This thread has been incredibly helpful! I've been running a freelance graphic design business as a sole proprietorship for 3 years now and had no idea about these different tax structures. Reading through everyone's experiences, it sounds like the S-Corp election could potentially save me money, but I'm nervous about the "reasonable salary" requirement that @Mateo Perez mentioned. My income fluctuates a lot - some months I make $15K, others I barely break $3K. For those who have made the S-Corp election, how do you handle the salary requirement when your income isn't consistent? Do you have to pay yourself the same amount every month even if the business didn't earn that much? And what happens if you guess wrong on what's "reasonable" - is there a safe harbor rule or something? Also wondering if anyone has experience with creative businesses specifically. I'm not sure what comparable salaries would be for someone doing logo design, web design, and brand identity work.