We tried that first but ran into issues with the identity verification. Apparently since he's never filed before, there's not enough tax history for the automated system to verify him. It kept rejecting the account creation. So frustrating!

That's common with the ID verification system if you don't have a filing history. Another option is to have him go to a local IRS Taxpayer Assistance Center in person. They can provide transcripts on the spot, and their identity verification process is different than the online system. He'll need to call 844-545-5640 to make an appointment first. Just make sure he brings two forms of ID. The in-person verification might bypass the issues you're having online.

Totally agree! I used to work at one of those places (won't name names) and we were trained to upsell unnecessary services. For a prior year return, we'd charge double or triple the normal fee even though it's the exact same work. The "professional" preparing your taxes often has minimal training too - like a 2-week course.

Thanks for suggesting this. Do VITA volunteers handle complicated situations like missing W-2s and multiple years of unfiled taxes? And do they have any income limits for who they'll help?

VITA generally helps people who make $60,000 or less, so based on what you shared about making under $15,000, you'd definitely qualify. They absolutely can help with multiple years of unfiled taxes - that's a common situation they deal with. As for missing W-2s, the volunteers are trained to help you get replacement documents or transcripts from the IRS. Many VITA sites can even access your wage and income transcripts directly if you give them permission, which makes the process much smoother.

This is so important! When I was applying to schools, I found out that having documented homelessness also qualified me as an "independent student" for FAFSA purposes, which meant they didn't need my parents' financial info at all. Made a huge difference in my aid package.

Did the estimator handle bonuses correctly? I get about 20% of my income from quarterly bonuses and those are always withheld at a different rate. Every calculator I've tried seems to mess that part up.

The estimator does handle bonuses, but you have to enter them correctly. There's a specific section where you can enter expected bonuses separately from your regular salary. It will then factor in that bonuses are typically withheld at the 22% supplemental rate rather than your normal withholding rate. When I used it, I had to enter my annual salary in one field and then my expected bonus in the separate bonus field. Don't combine them or it will calculate as if all your income is withheld at the same rate. That was probably the issue with other calculators you've tried.

You might have checked the box in Step 2(c) for "multiple jobs" without realizing what it does. That box basically tells your employer to withhold at single rates which is much higher. Try redoing the form without checking that box and instead use the withholding estimator to calculate a specific extra amount to withhold on line 4(c).

You're totally right! I just checked my form and I DID check that box plus I had also put an additional amount on line 4(c). So I was essentially double-counting the extra withholding needed. HR gave me a new form to fill out today and I'm only going to use the specific dollar amount approach instead. Thanks for catching that!

Thanks for the heads up. I was afraid of that. I just checked my credit report and there are no liens showing up yet, so maybe I caught it in time? Would the liens definitely show on my credit report or could they exist without showing up there?

Tax liens don't always show up on credit reports anymore - the credit bureaus changed their policies a few years back. The absence on your credit report doesn't guarantee there's no lien. You should request an "Account Transcript" from the IRS for each tax year to see exactly where you stand and what actions they've taken. You can request these online through the IRS website if you can create an account, or your tax professional can request them for you with proper authorization. These transcripts will show if they've filed SFRs, assessed penalties, or initiated collection actions.

The Fresh Start Initiative can definitely help in your situation. It expanded options for installment agreements and offers in compromise. One key benefit is penalty abatement - especially for first-time non-filers. You might qualify to have some penalties reduced or removed entirely.

Wait, so this is an "election" we have to specifically make? How do we do that? Is there a specific form or do we just deduct the $5k on our Schedule C?

You make the election by attaching a statement to your tax return for the year your business begins operations. The statement needs to include the amount you're electing to deduct, a description of the expenses, and the month your business began active operations. You'll also report the actual deduction on either Schedule C (for sole proprietors) or your business entity return. The remaining amount over $5,000 would then be amortized over 15 years starting with the month your business began. Most tax software will walk you through this if you indicate you have startup costs, but it's good to be aware of the requirement for the election statement.

Are there any good apps you recommend for tracking this stuff? I'm starting a small side business too and want to do it right from the beginning.