Thank you for mentioning potential refunds! I hadn't even considered that possibility. Do you know if receiving a refund for one year could offset what I might owe for other years automatically? And what exactly is a CP2000 notice? Is that something I should be worried about?

The IRS will generally apply any refunds to outstanding tax debts automatically. So yes, if you're due a refund for 2022 but owe for 2018, they'll typically apply that refund to reduce your 2018 balance. This happens automatically in most cases. A CP2000 is a notice of proposed adjustment to your tax return. It basically means "we think you didn't report all your income." It's not an audit, but it means the IRS identified a discrepancy between what you reported and what they have on record from W-2s, 1099s, etc. Not something to panic about, but you'll need to either agree with their assessment or provide documentation showing why they're incorrect.

Plus if you lived in different states during those years you might need to file partial year returns for each state! I had to file in 3 different states for one tax year when I moved around for work. Total nightmare.

2 I'm confused about the principal place of business requirement. I'm a graphic designer and I do most of my actual design work in my home office, but I meet clients at coffee shops and sometimes work at the library when I need a change of scenery. Does that disqualify me?

13 You're still likely eligible for the deduction. The key is where you perform the primary activities of your business. For a graphic designer, if your actual design work is primarily done in your home office, that would qualify as your principal place of business even if you meet clients elsewhere or occasionally work in different locations. The IRS looks at factors like where you spend the most time working and where the most important aspects of your business are performed. Since the core creative work of graphic design happens in your home office, that should satisfy the principal place of business requirement.

10 The home office deduction goes on your Schedule C (Profit or Loss from Business) if you're self-employed. The software should automatically calculate it based on the information you provide about your home office. There's no separate form specifically for the home office deduction itself. When you input your business expenses in the software, there should be a section specifically for home office. The software will ask if you want to use simplified or regular method, then either ask for square footage (simplified) or ask for all your home expenses and the percentage used for business (regular method).

Do you know if there's a way to easily determine which states require their own estate tax returns? I'm in Florida but my mom owned property in two other states as well.

Florida doesn't have a state estate tax, so you're good there. But if your mom owned property in other states, you may need to file non-resident estate tax returns in those states depending on which ones they are. Currently, only 12 states plus DC have estate taxes: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. If the properties are in any of these, you'll likely need to file. Some states have exemption thresholds much lower than the federal one, so even smaller estates might owe state estate taxes. I'd recommend checking the tax department websites for each state where property was owned just to be safe.

I used TaxAct for my father's estate last year and it handled the K-1 from his business partnership really well. It was much cheaper than TurboTax and had specific guidance for estate returns. They have a section specifically for fiduciary returns that walks you through the 1041 step by step.

Is there any software you recommend for creating and filing the 1099s? I'm guessing I can't just make these myself on regular paper?

You can use tax software like TurboTax, H&R Block, or QuickBooks to prepare and file your 1099s. There are also specific 1099 filing services like Track1099 or Tax1099. The IRS has specific paper requirements if you want to print them yourself - they need to be on official red "scannable" forms which you can order from the IRS or buy at office supply stores. But honestly, e-filing is much easier and more reliable. Most software will e-file with the IRS and let you print copies for your contractors.

This is the right answer. The way OP structured this, they've basically created a business relationship with all those subs. Direct payment from homeowner to subs would have been cleaner taxwise.

Thanks for the encouragement! Did you end up owing a lot in penalties when you finally filed? That's what I'm really worried about.

For the years where I owed taxes, yes, there were penalties - but they weren't nearly as bad as I had built up in my head. The failure-to-file penalty is 5% per month up to 25% maximum, plus interest. But for the years where I was due a refund, there were no penalties at all (though I could only claim refunds for the most recent 3 years). The IRS was actually reasonable about setting up a payment plan. My monthly payment is around $120, which is manageable. The mental relief of not having this hanging over my head anymore is worth way more than what I'm paying in penalties.

THIS! I filed all my federal back taxes but completely forgot about state. Got a nasty surprise letter from my state tax agency six months later with additional penalties. Handle both at the same time if you can.