This is really helpful info, thanks! Are there similar income limits for deductions too? I got a decent raise this year and I'm wondering if that might affect what I can claim when I file in 2025.

Yes, many deductions have income limits too! Student loan interest deduction starts phasing out at $75,000 for single filers, traditional IRA deduction has limits if you have a workplace retirement plan, and medical expense deductions only count for expenses over 7.5% of your AGI, so higher income means fewer medical expenses qualify. If you got a big raise, definitely look into maxing out your 401(k) or other retirement accounts since that lowers your AGI and might help you qualify for more deductions and credits that have income limits.

In my experience, they do ask questions to try to determine eligibility, but they're only as good as the information you provide. If you don't know to mention something or misunderstand a question, you could miss out. I accidentally skipped some education questions last year and nearly missed a $1500 credit!

But isn't it better to break it into multiple payments? What if I can't come up with the entire amount in one payment, even after 120 days?

If you can't pay the full amount within 120 days, then you definitely want to set up the installment agreement with monthly payments. That's a different option in the online payment system. The installment agreement is great if you need more time, but it does come with a setup fee and you'll have to make regular monthly payments. With the 120-day option, you're just telling the IRS you'll pay in full by a certain date, and they don't charge a setup fee for that arrangement.

This is TERRIBLE advice! Not filing is the worst thing you can do. The IRS charges a failure-to-file penalty of 5% of your unpaid taxes for each month your tax return is late, up to 25%. The failure-to-pay penalty is only 0.5% per month. Plus, there's a statute of limitations on how far back the IRS can audit you, but it doesn't start until you file. So by not filing, you're keeping yourself open to audit indefinitely. I learned this the hard way. Don't repeat my mistake.

Thanks for mentioning that! I had no idea about needing a PTIN or the software costs. Are there any decent budget options for software when just starting out with a few clients, or do you really need to invest in the professional versions right away?

There are definitely budget-friendly options when you're just starting out. TaxAct Professional and TaxSlayer Pro offer lower-cost entry packages for new preparers with a small client base. Some even have pay-per-return options which might be more economical if you're only doing a handful of returns. Drake also offers a "pay-per-return" option that might work better for your first season than their full package. I'd recommend trying the demos of a few different software options before committing - they all have different interfaces and workflows. ProSeries and Lacerte are more expensive but very popular if your business grows.

This is great advice. What resources did you use to learn that specific niche? Were there courses specifically for gig worker taxes or did you piece it together from general tax knowledge?

Is that actually allowed by the IRS though? Wouldn't they want the payment to come from the person who owes the tax?

The IRS doesn't actually care who makes the payment as long as it's properly credited to your tax account. You just need to make sure the payment includes your name, tax ID number, form type (1040-NR), and tax year. This is common for married couples where one spouse pays both tax bills, parents paying for their kids, or employers paying for employees in some cases. The key is making sure the payment information correctly identifies whose tax account should be credited.

This is terrible advice. The IRS absolutely tracks everything, even small amounts. My friend ignored a $12 balance and two years later got a notice with penalties and interest that had grown to over $40. Just pay what you owe.

Did the enrolled agent help negotiate a lower amount overall or just handle the payment plan? Wondering if it's actually possible to get the IRS to accept less than what they say you owe.

The EA didn't get the actual tax amount reduced - that's rarely possible unless there are actual errors in how your tax was calculated. What they did get reduced were the penalties, which in my case had added about $7k to my original tax bill. They managed to get about $5k of those penalties removed through the first-time penalty abatement program and reasonable cause arguments. They also made sure I was claiming all legitimate business deductions that I had missed on my original filings, which lowered the taxable income and therefore the tax due. This is different than "negotiating" with the IRS - it's just proper tax preparation that I had failed to do correctly.

I tried for an OIC but got rejected. They look at your income, expenses, assets... basically if they think you CAN pay (even over time), they won't accept less. Those radio ads are super misleading. Like 40% of OICs get accepted, and usually for people with serious hardships or very little income/assets compared to their debt.

Thanks for sharing your experience. That's pretty much what I suspected - those ads do sound way too good to be true. I guess I'll look more into payment plans instead since I do have a steady income. Did you end up with an installment agreement after your OIC was rejected?