I tried that route. Unless you're basically destitute, they rarely accept OICs. They'll look at your income potential over several years, so making $67k won't help. They also look at assets, bank accounts, retirement funds, etc. It's a really intensive process with tons of documentation required.

That's good to know. I've seen those "settle your tax debt for pennies on the dollar" ads and wondered if they were legit or just trying to collect fees for filing paperwork that gets rejected anyway. From what you're describing, it sounds like most people wouldn't qualify unless they're in really dire financial situations. I guess the IRS payment plan is probably the more realistic option for most folks.

This is the best advice here tbh. I made this mistake and ended up paying an extra $4,000 in penalties because I didn't file since I couldn't pay. The IRS is actually pretty reasonable about payment plans if you're proactive and communicate with them.

Thanks for confirming! Yeah, it's something I wish I'd known earlier. I put off filing for almost 8 months because I couldn't pay what I owed, and those failure-to-file penalties absolutely destroyed me financially. I've found that the IRS is surprisingly willing to work with people on payment plans. Their interest rates aren't even that bad compared to credit cards or personal loans. The key is staying in communication and never ignoring notices.

19 For actual income or deduction changes, you would need to file an amended return using Form 1040-X. Unlike the 1095-C situation, missing investment income absolutely needs to be reported through an amendment. You can prepare an amended return through most tax software, though some charge extra for this service. File it as soon as you can to minimize any potential interest or penalties. If you owe additional tax, pay it when you file the amendment to stop further interest from accruing.

11 I used eztaxreturn for an amendment last year. It's doable but not as streamlined as their regular filing process. You have to essentially recreate your return and then identify what changed. They charge an additional fee too (I think it was around $30 when I did it). But in this case, since the 1095-C doesn't change anything tax-wise, you shouldn't need to amend at all.

1 Do I absolutely have to file Form 2210? I've heard some tax software will calculate the penalty automatically without needing to complete the separate form. Is that true or do I need to specifically file the 2210 no matter what?

22 Most tax software will calculate the penalty for you, but Form 2210 is still technically being prepared and submitted as part of your return - the software just handles it behind the scenes. If your underpayment is relatively small, you can often check a box that lets the IRS calculate the penalty for you instead of doing the calculations yourself. However, if you're requesting a waiver for the penalty or if you had uneven income throughout the year that affects your required payments, you'll need to complete the full form with all the calculations. The software should prompt you with the right questions to determine if you need the simplified or detailed version.

6 That's what I did last year. The penalty wasn't terrible - I owed about $3,000 for my Q4 payment and the underpayment penalty was like $75. For me, that was worth the simplicity of just handling it all at tax time rather than dealing with making a separate late payment.

16 Just be careful with this approach. If you owe a substantial amount, the penalties can add up quickly. They calculate it based on both the amount and how long it was late. Also, if you repeatedly miss estimated payments, it can trigger more IRS scrutiny on your returns.

That's a good point! I just checked and I did opt to have the $89 fee taken out of the federal refund, but that still doesn't explain the big difference. Based on other comments, I'm pretty sure now that I'm just waiting on the state portion to come separately. I'll give it another week or two before I start worrying.

The IRS "Where's My Refund" tool has been super unreliable this year though. Mine was stuck on "received" for 3 weeks even though the money had already been deposited in my account. The state tracker was more accurate for me.

1 Thanks for bringing this up - I think I have my business license sorted but I'm not sure about specialty permits for tobacco/vape products. Who would I even contact to make sure I have everything covered? The city? County? State? It's so confusing trying to figure out which government entity handles what.

8 Look for someone who has specific experience with retail businesses, particularly those dealing with specialized inventory like yours. Ask potential tax pros what percentage of their clients are small retail businesses, and how familiar they are with your state's specific sales tax requirements for your products. A good tax professional should be asking YOU lots of questions about your business operations, not just quoting you a price. They should inquire about your inventory methods, point-of-sale system, how you track expenses, etc. If they don't ask these types of questions, they're probably not specialized enough for your needs. The cheapest option is rarely the best for specialized businesses. That said, the most expensive isn't automatically the best either. Focus on finding someone with relevant experience rather than making decisions based purely on price.