Wow thanks for mentioning this! I had no idea about the 20% down payment requirement. Do you know if there are any exceptions to this rule? I'm cash poor right now which is part of my problem.

Yes, there's an exception if you meet the IRS low-income certification guidelines. If you qualify as low income, both the $205 application fee and the 20% down payment can be waived. The qualification is based on your household size and income compared to federal poverty levels. If you don't qualify as low income but still can't make the 20% down payment, you can choose the periodic payment option instead. This requires you to propose monthly payments and start making these payments while your OIC is being considered. The downside is if your offer is rejected, those payments won't be returned.

This is actually a misconception. Once an OIC is accepted and you fulfill the terms, that tax debt is settled permanently. However, there is a 5-year compliance period where you must file all required returns and pay all taxes on time. If you don't, the IRS can revoke the agreement and reinstate the original debt.

Thanks for mentioning the state filing! I totally wasn't thinking about that. Do I need to wait until the federal amendment is processed before doing the state one?

In most cases, you should file both amendments around the same time. You don't need to wait for the federal amendment to be processed before filing your state amendment. However, some states do require you to attach a copy of your federal amendment (Form 1040-X) to your state amendment form. Each state has their own amendment form and process. For example, California uses Form 540X, New York uses Form IT-201-X, etc. Check your state's tax department website for the specific form and instructions. The state amendment process is usually similar to the federal one, but processing times can vary significantly by state.

Did you have to pay immediately or did they bill you after processing the amendment?

This makes sense but I've heard some freelancers can reduce their tax burden significantly with the right business entity. Is sole proprietorship really the most tax efficient at $42k? Wouldn't an S-corp save on self-employment taxes?

At $42k in profit, an S-corp typically won't save you money because of the additional costs involved. With an S-corp, you must pay yourself a reasonable salary (subject to both employer and employee portions of FICA taxes), file separate corporate tax returns, and potentially pay for payroll services. The tax advantage of an S-corp comes from distributing some profits as dividends that aren't subject to self-employment tax. But when your profit is around $42k, a reasonable salary would likely be most or all of that amount anyway, leaving little to nothing for the tax-advantaged distributions. Plus, you'd have several hundred dollars in additional annual costs for corporate filing fees, separate tax returns, and possibly accounting services. The math usually doesn't work out favorably until you're earning significantly more.

Is there a specific form for making these quarterly payments? And what are the deadlines? I just started freelancing and haven't made any quarterly payments yet this year...

That's an interesting perspective, but how would a youth advisory council actually work? Would they have any real power or just be symbolic? And who would choose which teens get to serve on it?

Those are good questions. I think for it to be meaningful, the council would need some actual authority - perhaps control over a small portion of the budget earmarked for youth programs, or veto power over certain spending decisions that directly impact young people. As for selection, I would suggest a combination of approaches - some members elected by high school students, others appointed based on applications and interviews to ensure diverse representation across socioeconomic backgrounds, geographic regions, etc. Maybe even have a rotating membership with 1-2 year terms so more young people get the opportunity to participate.

That's a really privileged perspective. Not all parents vote in their children's best interests - many vote against policies that would help their own kids based on political ideology. And regarding felons, many states now recognize that permanent disenfranchisement after serving a sentence is counterproductive to rehabilitation and reintegration. That's why so many states have restored voting rights after sentence completion.

10 Did you find the Chamber of Commerce membership worth the cost? I've been considering joining but wasn't sure if it would actually lead to clients or just be another expense.

3 The Chamber membership was absolutely worth it for me, but it depends on how active your local chapter is. Mine hosts weekly networking events and monthly small business seminars, so I had plenty of opportunities to connect with potential clients. The key isn't just joining but being consistently present and helpful. I volunteered to give short presentations about tax topics at events, which positioned me as an expert. I didn't hard sell my services - just provided useful information and made myself available for questions afterward. This approach consistently brought in 3-5 new clients per event.

8 I tried the roadside signs one year - total waste of money. Got maybe 2 clients from it. Digital billboards were slightly better but still not great ROI. What actually worked better was putting flyers in apartment complexes and on community bulletin boards at grocery stores and coffee shops. Much cheaper and targeted people in my actual service area.