That makes a lot of sense. For the prior years, should I try to file them all at once or do them one by one? And for the stock losses, do you know how many years I can carry those forward? I lost quite a bit in 2021-2022.

You can file them all at once - that's actually better since it shows you're making a comprehensive effort to get compliant. Just make sure each year is in its own separate envelope if mailing them. For capital losses, you can deduct up to $3,000 per year against ordinary income, and carry forward any excess losses indefinitely until they're used up. So those 2021-2022 losses could potentially offset your income for several years to come, which might really help with your current tax situation.

This isn't entirely accurate advice. While audit rates are low for most people, failing to file returns for several years does significantly increase your chances of getting IRS attention, regardless of income level. The IRS does have automated systems that flag non-filers.

Thanks for mentioning this! My tax payment is around $12k so hopefully that's under the limit, but I'll definitely check my account settings to make sure. Do you know if there are monthly limits too or just daily?

There are monthly limits as well, which are typically 3-4 times the daily limit in my experience. For a $12k payment you should be fine unless you've already made other large transfers this month. You can check your specific limits by logging into your Marcus account, going to the profile section, and looking at "Transfer Limits." It's usually shown right there, or you might need to click on account details depending on if you're using the app or website.

This is so true! I freaked out last year thinking my payment didn't go through, even called Marcus support. They explained that tax payments process differently than regular transfers. As long as you got the confirmation email from TurboTax, you should be good.

This is super helpful! I was just checking my Marcus account and didn't see anything pending yet, so was starting to worry. I'll give it a day before I start panicking. Thanks for sharing that!

Yikes, that's scary. Do you know if the payment plan stops the penalties from accumulating? I'm definitely calling them this week.

The payment plan doesn't completely stop penalties and interest, but it does prevent further collection actions like liens and levies as long as you keep making payments. The failure-to-pay penalty drops from 0.5% to 0.25% per month when you're on a plan, which helps a little. Interest (currently around 5%) continues regardless. Still way better than ignoring it though - I learned that lesson the hard way!

This is great advice! I got first-time abatement for a similar situation. Just call the IRS and specifically ask for "first-time penalty abatement" - many agents won't offer it unless you specifically request it.

Thank you all for the helpful responses! I checked my 2020 return and found line 24 showing my total tax liability. Just to confirm, this is the amount I should use to make sure I've paid enough for 2021 through the combination of withholding and estimated payments, right?

Exactly right! Line 24 from your 2020 return is the number you should use as your target for total 2021 payments (both withholding and estimated payments combined). If your income in 2020 was less than $150,000, you need to pay 100% of that line 24 amount. If your 2020 income was over $150,000, you need to pay 110% of that line 24 amount to hit the safe harbor protection against underpayment penalties.

This is so important! My first year being self-employed I completely underestimated my tax liability because I forgot about the self-employment tax. Ended up owing a bunch more than I planned for.

This is so helpful to hear from someone who does this professionally! So I guess the next question is - should I file an amended return just to correct that one "no" to a "yes" even if it doesn't change anything tax-wise? Or is that overkill?

Filing an amended return just to change a "no" to "yes" when there's no tax impact would be complete overkill. The IRS is concerned with collecting the correct amount of tax, and in your case, the correct amount is exactly what you already reported. If you had missed reporting actual income or deductions that changed your tax liability, then yes, you'd want to amend. But for an informational question with no financial impact? Save yourself the hassle. Just remember next year to answer "yes" to that question if you still own those stocks.

Same! I claimed the wrong education credit once and the IRS sent me a very scary letter. But they were actually pretty reasonable about fixing it. I just had to pay back the difference plus a small interest amount.