Did you use a tax professional to help set up your payment plan or did you negotiate it yourself? I'm in a similar situation ($56k debt) but worried about saying the wrong thing if I try to handle it myself.

I initially tried to set it up myself, but I made some mistakes on the financial forms that got my first proposal rejected. After that frustration, I hired a tax resolution specialist who helped me properly document my financial situation and negotiate terms that worked for my actual circumstances. It cost about $1,800 for their services, but they saved me way more than that by properly structuring everything. If your situation is straightforward and you're comfortable with financial forms, you might be able to handle it yourself. But in my experience, having a professional who knows exactly what the IRS is looking for made a huge difference in both the monthly payment amount and my stress level. They also helped identify which penalties could be abated, which I wouldn't have known to ask about.

100% this. My parents got scammed by one of those "we'll settle your tax debt for pennies on the dollar" companies. They paid $4500 upfront and got literally nothing but a standard installment agreement they could have set up with a 20-minute phone call. Complete ripoff.

Is there a specific credential or certification I should look for when hiring someone to help with tax debt? I see all these different titles - tax attorney, CPA, EA, tax resolution specialist - and don't know which is most appropriate.

Can both unmarried parents claim EITC for the same child? Or does only one get to claim it? My ex and I share custody 50/50 and we're confused about how to handle this.

Only one parent can claim a child for EITC purposes. The same child cannot be claimed by multiple taxpayers for this credit in the same year. For 50/50 custody situations, you'll need to decide which parent claims the child. If you can't agree, the IRS tiebreaker rules apply, which typically award the claim to the parent with the higher adjusted gross income. Some parents alternate years. Just make sure you don't both try to claim the same child - that will trigger IRS notices for both of you.

Does Head of Household make that big of a difference? I've been providing most of the housing costs since my boyfriend's been saving for taxes. Would I qualify for this even if I don't claim our daughter?

Head of Household can make a huge difference - the tax brackets are more favorable than Single filing status and the standard deduction is larger too. For 2023, the standard deduction for HOH is $20,800 compared to $13,850 for Single - that's nearly $7,000 more of your income that's not taxed! Unfortunately, you would need to claim your daughter as a dependent to qualify for Head of Household status. You must have a qualifying person (usually a dependent child) to file HOH. Since you're providing most of the housing costs, you might actually benefit more than your boyfriend would by claiming her, especially if the HOH status drops your tax rate.

What specific things should we include in our partnership agreement regarding the payment for performances? We have a basic agreement but didn't get that detailed.

You should specifically include language about "guaranteed payments" for services performed by partners. This would clearly state that your partner receives $X per performance, regardless of the partnership's profitability, as compensation for services rendered in their capacity as a partner. You should also include how profits and losses will be allocated after accounting for these guaranteed payments. In your case, it would specify that after paying all performers (including your partner) and other business expenses, the remaining profits are split 50/50. Having this clearly documented will make your tax filings much more straightforward and defensible if ever questioned by the IRS.

This is really important advice. First-time business owners often miss this and end up with underpayment penalties. I've found that setting aside about 30% of net income for taxes is a good rule of thumb for most partnerships.

Is that $1,000 per partner or for the partnership as a whole? And how do we calculate how much to pay each quarter?

Oh this is super helpful! I just checked my TurboTax account and found exactly this problem - I had set up an account for my ex years ago and somehow that routing info got saved as my primary. So weird that TurboTax would keep outdated bank info for years without confirming it's still valid! How long did it take from when you discovered the problem until you got your refund check?

From discovery to actually receiving the check was about 10 weeks total. The most frustrating part was that the "Where's My Refund" tool was completely useless during this time - it just kept saying the refund was sent to my bank account for weeks after the bank had already rejected it. If I were going through this again, I'd skip the frustration of trying to call myself and use one of the services others mentioned. The not-knowing was the worst part, and getting actual confirmation that the IRS was aware of the rejection and processing a check would have saved me a lot of anxiety.

I actually managed to get TurboTax to help after a LOT of escalation. The trick is to not deal with the first-level support. Ask specifically for a "Tax Specialist" and mention that the software incorrectly transmitted your banking information. They ended up giving me a direct contact at the IRS and even followed up to make sure my issue was resolved. They also refunded my TurboTax fees and gave me free filing for next year. But it took about 6 calls and a lot of insistence that this was their error, not mine.

FreeTaxUSA has been pretty transparent in my experience. The regular version is free for federal but charges for state. The Free File version (for AGI under $41k) is free for both. They do charge for audit assistance and a few other add-ons, but those are optional and clearly marked. Been using them for 3 years with no surprise charges.

Thanks for the info! Good to know they're upfront about the costs. I'm sick of getting to the end of filing just to find out it's going to cost me $75+ to actually submit my return. I'll definitely look into the Free File option with them since I'm right at the AGI limit.

The Free File versions are functionally the same as the paid versions in terms of calculations and error checking. The companies aren't allowed to offer "lite" versions through the program - they must provide their full tax preparation functionality. The differences typically come in supplemental features like audit support, tax advice, data storage for multiple years, or the ability to import previous years' returns. But for the actual tax preparation and error checking, you're getting the same engine.