Thank you for mentioning this. I'm hoping we can prove we don't owe this money, but it's good to know there are options if we end up having to pay something. Do you know if the payment plans have reasonable monthly minimums? I've heard horror stories about the IRS demanding huge monthly payments.

The minimum monthly payment is basically determined by the total amount owed divided by the number of months in your agreement (up to 72 months maximum for the standard plan). For your $12k situation, that would be around $167 per month if you stretched it to the max timeframe. The IRS does consider your financial situation though. If you can demonstrate that you can't afford the standard payment, you can apply for what's called a "Partial Payment Installment Agreement" where they may accept lower monthly payments based on your financial situation. This requires filing Form 433-F (Collection Information Statement) to show your income, expenses, and assets.

Great point! I got a fake IRS letter last year that looked SO convincing. The only thing that tipped me off was that they wanted payment via gift cards (lol). Real IRS letters don't ask for gift cards or wire transfers.

Is self-employment tax really that significant? I'm also in a new partnership and trying to figure out if I should be making quarterly estimated payments.

That's a great point I hadn't considered! Do you know where I would find information about my state's specific rules for medical deductions? Is there a website that compares all the different state rules?

The best place to check is your state's department of revenue or taxation website. Just google "[your state] department of revenue medical expense deduction" and you should find the official information. Each state has different rules, and they don't always match federal guidelines. Don't bother with websites that compare all states - they're often outdated. Your state's official tax website will have the current rules. You can also download your state's income tax forms and instructions, which usually explain the medical deduction rules in detail.

The HSA suggestion isn't great for someone at this income level. You need a high-deductible health plan to qualify, and those can be risky for lower income folks. Plus HSAs don't typically work with dental unless it's medically necessary.

I didn't know about Informed Delivery! Just checked and my post office does offer it, but it takes a few days to set up so probably won't help with this letter. But thanks for the TAS number - I'll definitely call them if I can't work something out with the regular IRS line. I'm definitely in hardship territory right now, so maybe they can help me out.

Is this true about the appeal clock starting at attempted delivery? That seems really unfair. What if you're on vacation or something? How would you even know they tried to deliver it?

Thanks for clarifying! That makes sense. Do you know if there's a sample of the new form available somewhere online that shows the exact layout? Would be nice to see what I'm going to be dealing with.

Yes, the IRS has published draft versions of the new K-1 forms on their website. If you go to IRS.gov and search for "2023 draft forms" you should be able to find it. They usually have PDF versions of all the draft forms with instructions. The final version might have some minor changes, but the draft will give you a good idea of the new layout and where to find the guaranteed payments section.

The new K-1 format actually improves the reporting of foreign income and taxes. Instead of lumping foreign taxes into a single box with a statement, the new format breaks out foreign income by country and provides clearer reporting of the foreign taxes paid. This should make calculating your foreign tax credit much easier. There's a new specific section for international tax matters that provides more granular information. You'll see a country-by-country breakdown rather than having to decipher sometimes confusing supplemental statements. This is especially helpful if you have income from multiple countries since you can more easily track which income relates to which foreign tax.

That's such a relief to hear! The supplemental statements were always inconsistent between my different partnerships. Having it directly on the form with a standard format will make things so much clearer. Thanks for the info!