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Just a quick tip - most states have an online portal where you can register and view your filing history. Google "[your state] tax portal" or "[your state] department of revenue account" and you should find it. You'll need to create an account and verify your identity, but then you can see if you filed last year without having to call anyone. That's how I confirmed I had accidentally skipped filing state taxes one year (had to pay a small penalty but it wasn't too bad).
Do you know if these state portals also show if you owe money still? I filed state taxes last year but got a letter recently saying I have an outstanding balance, which seems wrong.
Yes, most state tax portals will show any outstanding balances you might have. They typically display your filing history, payment history, and any current amounts due including penalties or interest that might have accrued. If you received a letter saying you have an outstanding balance that you believe is incorrect, definitely log into your state's portal to verify. Sometimes there can be processing errors or payments that weren't properly credited to your account. The portal should show the breakdown of what they think you owe and why, which can help you determine if there's a legitimate issue or a mistake.
I made this exact mistake two years ago and didn't file my state taxes! I filed through what I thought was the "official site" and only did federal. Didn't realize until I got a notice from my state a year later. Had to pay penalties and interest. Check your state's department of revenue website asap to see if you have any unfiled returns or balances due. You might still be able to file a late return and reduce any penalties if you act quickly!
Has anyone used tax software to figure this out? I tried entering a similar expense in TurboTax for my home business and it wasn't clear where to put it.
Has anyone used a property improvement like tree removal as a direct materials cost if you use the wood in your woodworking business? I had a similar situation and my accountant let me fully expense the tree removal because I milled the wood for inventory. Might be worth considering if the trees are a usable species.
That's brilliant! What documentation did you need to provide to make that work? I'm guessing you'd need to show the wood was actually used in products?
Based on what you described, you're operating as a partnership. The 1099 suggestion is incorrect - that's for independent contractors, not business partners. Since you're splitting income 50/50, you should: 1. File Form 1065 (Partnership Return) 2. Generate Schedule K-1 forms for each partner 3. Each partner reports their income on their individual returns You don't need a formal business entity to be a partnership for tax purposes. Even without paperwork, if you're splitting profits, you're a partnership in the eyes of the IRS.
Thanks for this clear explanation! Just to double check - even though the payments all come to my personal account, we should still file as a partnership rather than me paying my partner as a contractor? And we'd both still use Schedule C on our individual returns?
Yes, even though payments come to your personal account, you should still file as a partnership if you're truly operating as equal partners. The money coming to your account is just a logistical detail - the business relationship is what matters to the IRS. After filing Form 1065, you would each report your partnership income on Schedule E, not Schedule C. Schedule C is for sole proprietorships, while partnership income flows through Schedule E based on the information from your K-1.
My wife and I do content creation and had this EXACT issue last year! We just formed an LLC and elected partnership taxation (its super easy). Now all income goes to the LLC bank account and we file Form 1065. Saved us so much headache and actually some tax money too!
Just to add something practical - I send contractors a complete packet when I hire them that includes the W9 form, instructions, and a letter explaining why I need it and the deadline to return it. I make signing and returning the W9 a condition of our first payment. Never had anyone refuse once they understand it's literally required for them to get paid. Just saying, setting expectations up front saves so much hassle later!
That's a smart approach. Do you have a template for that letter you could share? I think being more formal about it from the beginning might help.
I don't have a shareable template handy, but it's pretty simple. My letter includes: 1) A brief explanation that tax law requires me to collect their tax information before making payments, 2) A deadline for returning the completed W9, 3) A statement that I cannot process payments without a completed W9 on file, and 4) A reminder that I'll be sending them a 1099 form by January 31st for any payments over $600. I also explain that protecting their information is important to me and describe how I store their documents securely. Most contractors appreciate the professionalism and clarity. Having this as part of your onboarding process for any new vendor relationship sets the right tone from the start.
Quick question - what if they're a foreign contractor? W9 is for US persons only. If they're outside the US, you need to request a W-8BEN instead. Made this mistake last year and had to go back to all my overseas contractors for the right form.
You're absolutely right! This is a common mistake. For foreign individuals, you need Form W-8BEN. For foreign entities/businesses, you need Form W-8BEN-E. These forms certify that they're not subject to US tax withholding because they're foreign persons. The reporting requirements are also different. Instead of 1099s, you might need to file Form 1042-S for certain types of payments to foreign contractors. The rules get complicated depending on what services they're providing and where they're located.
Amina Bah
I had the same issue last year and ended up using TaxAct. Their system allowed me to manually input the information from my PDFs. It took some time, but they had a reasonable price for e-filing federal and state returns. The interface is pretty straightforward and helps catch errors too.
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Oliver Becker
β’Did you have to pay again to use TaxAct even though you'd already paid for the other service to create your PDFs? That seems like paying twice for basically the same thing?
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Amina Bah
β’Yes, unfortunately I did have to pay again for TaxAct. You're right that it feels like paying twice, which was frustrating. That's the downside of creating PDFs without e-filing capability built-in. Some services advertise "create tax documents" but don't clearly explain that those documents aren't suitable for e-filing. Next year, I'll just start with a service that includes e-filing from the beginning to avoid the double cost. The lesson I learned is to check if e-filing is included before starting the tax preparation process.
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CosmicCowboy
honestly at this point just print and mail it. i know its old school but if u already did all the work making the PDFs then why start over? the irs processess paper returns fine it just takes a little longer for refunds. sometimes the simplest solution is best lol
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Natasha Orlova
β’The problem with mailing is the processing time - my friend mailed hers in February and didn't get her refund until JUNE. E-file is typically processed in days not months. Plus there's always the risk of it getting lost in the mail.
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