That's helpful but what if your income this year is way different from last year? I made much more this year so I'm worried about owing a huge amount at tax time if I just base it on last year's taxes.

That's a valid concern. The safe harbor just protects you from penalties, but you're right that you could end up with a large tax bill if your income increases significantly. If you expect to make substantially more this year, you might want to use the regular worksheet method to calculate payments based on your projected current year income. You can also adjust your payments for future quarters if you realize you're not paying enough. Just remember that each quarterly payment has its own due date and covers specific periods of income, so adjusting later payments doesn't retroactively fix earlier underpayments.

I use TurboTax Self-Employed and it does have a feature to calculate your quarterly payments. You input your estimated income for the year and it generates payment vouchers with the amounts. I've found it pretty helpful but it doesn't automatically adjust if your income changes during the year - you have to go back in and recalculate.

How do you check with state agencies if you don't know which states they might have filed in? Do you have to contact all 50 states?

You don't need to contact all 50 states. When you get your federal tax transcript, it may show which states had information returns (like W-2s or 1099s) filed. Focus on those states first. Additionally, if the identity thief used your address, they likely filed in your home state. If they used a different address, the IRS transcript might show where refunds were sent, giving you a clue about which states to check. Most state tax departments have identity theft departments similar to the IRS.

Did freezing your credit affect your ability to get housing? I'm worried since I'm still establishing myself after being homeless and might need to apply for apartments.

What about if you're a high-income earner? I heard there's a different percentage for people making over a certain amount. Is it still "whichever is smaller" in that case?

You're right to ask about high-income situations! If your AGI was over $150,000 (or $75,000 if married filing separately) in the prior year, the rule changes slightly. Instead of 100% of your prior year tax, you need to pay 110% of your prior year tax. So using the same example but assuming you're a high earner: - 90% of $12,000 = $10,800 - 110% of $8,000 = $8,800 In this case, $8,800 would be smaller, so that's your target to avoid penalties. And yes, it's still "whichever is smaller" - the IRS just adjusts the prior year percentage for high-income taxpayers.

Yep, the same rules apply for self-employment income. Your required estimated tax payments (to avoid penalties) still need to cover the SMALLER of 90% current year or 100% prior year (110% if high income). The difference is you need to include both income tax AND self-employment tax in your calculations. A good practice for self-employed folks is to set aside 25-30% of your income for taxes (including SE tax), but using last year's total tax as your safe harbor amount is usually the easiest way to avoid penalties if your income is growing.

I thought code V was only for incentive stock options (ISOs), not for non-qualified stock options? OP mentioned having NQSOs so I don't think they would have a code V entry. Isn't NQSO income just included in boxes 1, 3, and 5 as regular income?

You're absolutely right - I mixed up the reporting requirements. Code V is indeed only for ISOs, not for NQSOs. For non-qualified options, the income is simply included in boxes 1, 3, and 5 of the W-2 as ordinary income, with no special code needed. As for ESPPs, they're still worth considering alongside NQSOs, but you're correct that they're a completely different benefit with their own tax treatment. The main advantage is the potential discount on the purchase price (usually up to 15%) and the possibility of favorable tax treatment if specific holding periods are met.

Oh that's a great point! Does anyone know if you can get double-taxed by different states on the same stock option income? I moved from Massachusetts to Texas mid-year and exercised options that had been vesting for years.

Oh geez, I didn't even think about state taxes! I'm in Texas - do you know if they have any special LLC fees or requirements? And what about sales tax for digital services like web design? Do I need to charge clients sales tax?

You're actually in luck with Texas! Texas doesn't have state income tax and doesn't charge the kind of franchise fees that states like California do. However, Texas does have something called a "franchise tax" but small businesses with revenue under a certain threshold (around $1.23 million) are typically exempt. Regarding sales tax for web design, Texas does consider digital products and some services taxable. Web design can fall into a gray area - if you're just providing the service it might be exempt, but if you're delivering digital products those could be taxable. You should register for a sales tax permit with the Texas Comptroller to be safe. The rules are complex and change frequently, so it might be worth a consultation with a local tax pro who knows Texas specifics.

Second this! Mixing personal and business finances is a nightmare at tax time. Plus it can potentially jeopardize your liability protection, which is a big reason for having an LLC in the first place. It's called "piercing the corporate veil" when you treat business assets like personal ones.