I hadn't thought about that option. Is the OIC process more complicated than setting up an installment agreement? And do they accept a lot of these offers or is it really difficult to qualify?

An OIC is definitely more complex than a standard installment agreement. You'll need to complete Form 656 and Form 433-A (OIC) with much more detailed financial information. The process typically takes 6-12 months for a decision. As for acceptance rates, they've improved in recent years. The IRS accepts about 40-45% of OICs submitted these days, which is much better than the historical 10-15% acceptance rate from years ago. The key is being realistic about what you offer - they use a formula based on assets, income, and expenses to determine the minimum they'll accept.

This is good advice. I was placed in CNC status for 2 years when I had a medical issue that wiped out my savings. The IRS reviewed my case after about 24 months and by then I was able to set up a reasonable installment plan. Without that breathing room I would have been completely underwater.

Oh that's a good point - the property taxes are paid through the mortgage escrow. Would those be split between the estate and me in the same way as the interest? The property was reassessed after the inheritance too, so the taxes went up.

Yes, property taxes would typically be split the same way as the mortgage interest - based on when the mortgage was legally in your name versus the estate's name. However, since you were the legal owner of the property (the deed was in your name) earlier than the mortgage transfer, you might be able to claim all property taxes paid after the deed transfer regardless of whose name was on the mortgage. The property tax reassessment is actually important too - when you inherit property, you often get a "stepped-up basis" to the fair market value at the time of death, which affects your cost basis if you ever sell the property. Keep all documentation about the reassessment as you'll need that for future tax implications.

Did you have to file amended returns after getting the attorney involved? I'm in a similar mess with Wells Fargo and just got a corrected 1098 for last year, wondering if I need to amend.

Wait, really? I had no idea about this QBI deduction! Does it have income limits or phase-outs I should know about? And do I need to form an LLC or something to qualify for it?

Yes, there are income thresholds where phase-outs begin. For 2025, the phase-out begins at $191,950 for single filers and $383,900 for married filing jointly. Since your income is $105k, you should be well below these limits and eligible for the full 20% deduction. You don't need an LLC to claim this deduction - you can claim it as a sole proprietor reporting income on Schedule C. The QBI deduction is calculated on your net profit after business expenses, not on your gross 1099 income. This is another reason to make sure you're tracking all legitimate business expenses properly.

S-Corps can definitely be a tax-saving strategy for higher-income contractors, but they come with additional costs and complexity. With an S-Corp, you'd pay yourself a "reasonable salary" which is subject to FICA taxes (Social Security and Medicare), but you can take the rest of your business profits as distributions that aren't subject to self-employment tax. This can save you about 15.3% on the distribution portion. However, you'll have additional expenses: incorporation fees, annual state fees, separate tax return preparation, payroll processing, etc. Generally, the breakeven point where an S-Corp makes sense is around $80-100k of net profit, so at $105k you might benefit, but you should run the numbers carefully.

Thank you for the specific form recommendation! I didn't know about the 14157-A. Would you mind sharing how long the investigation into your preparer took? And did you end up having to pay back all the incorrect refunds you received in your situation?

The investigation took about 8 months before I received notification that action had been taken against the preparer. The IRS doesn't share specific details about penalties they impose, but I did receive a letter confirming my complaint was substantiated and that "appropriate action" had been taken. Regarding repayment, yes, I did have to pay back the incorrect refunds plus interest. However, the IRS did waive most of the accuracy-related penalties after reviewing my documentation showing I'd been misled. I was able to set up a payment plan with manageable monthly payments. The most important thing was separating myself from the fraudulent behavior by being completely transparent and proactive.

This is incorrect advice. They said they filed SEPARATELY, not jointly. Innocent spouse relief only applies to joint returns. Please be careful giving tax advice when you don't fully understand the situation.

Do you just manually calculate your portion each month, or have you found a way to automate this? My bill varies slightly each month so I'm always having to recalculate.

I manually calculate it each month since my bill does vary slightly. I keep a simple spreadsheet that shows the total bill, my portion, and the 50% business use calculation. This takes me about 2 minutes each month but provides a clear audit trail. I know some people set up a fixed monthly amount based on an average, but I prefer the exact calculation each month for accuracy.

I use Zoho Analytics and it's great for this. I created a custom dashboard that pulls my expense data and shows trends in my split costs. You can set up categories for "fully business" vs "partially business" expenses and track them separately.

That's exactly what I needed to know! I'll look into setting up that dashboard. Do you track the percentages separately or just the dollar amounts?