I didn't even think about quarterly taxes! We haven't been paying anything throughout the year. Is it too late to fix this for last year? And how do we figure out how much to pay each quarter going forward?

It's too late to fix last year's quarterly payments now, but you can avoid penalties going forward by starting them this year. For most resellers, you need to pay estimated taxes if you expect to owe $1,000+ at tax time. For calculating the amount, you can either pay 100% of last year's tax liability divided into four payments (the "safe harbor" method), or 90% of what you expect to owe this year. I personally set aside 30% of my net profit each month and make payments on the quarterly due dates (April 15, June 15, September 15, and January 15). There's a form called 1040-ES that helps with calculations, or your tax software should have an estimated tax calculator. Start now and you'll avoid the shock next tax season!

And sales tax! If you're selling online, the marketplace might collect it for you (like eBay or Amazon) but if you sell directly you might need to collect and remit sales tax depending on your state and sales volume. That tripped me up my first year.

What exactly is "adjusted basis" in this context? Is that like what I originally paid for the house?

Adjusted basis is basically what you paid for the house (original basis) plus improvements you've made that add value, minus any depreciation you've taken on the property. For example, if you bought your home for $300,000 and later added a $50,000 kitchen renovation, your adjusted basis would be $350,000. If you're using your home purely as a personal residence (not for business), you typically don't take depreciation, so that part wouldn't apply to most homeowners.

You might still be able to get the certification directly from the shingle manufacturer. Most major brands have downloadable certification statements on their websites. Just look up the exact model of shingles you installed. Receipts showing the specific type of shingles purchased are also crucial.

What about the tax debt situation? Would an accountant help navigate that better than tax software?

For the tax debt situation specifically, an accountant can provide strategic advice, but they don't have any special access to the IRS. They'd likely advise you to contact the IRS directly to set up a payment plan or explore settlement options. A tax professional might be able to help determine if any of the debt can be addressed through penalty abatement requests or other relief programs. They can also advise on whether filing jointly or separately makes more sense given the outstanding debt. But for actually resolving the debt, you'll still need to work directly with the IRS one way or another.

The marriage penalty isn't as bad as it used to be after the 2017 tax changes, but it can still hit high earners. At their income level (over $400k combined), they could definitely face some penalty. I'd suggest looking at the actual tax brackets for 2024 and calculating both ways. Don't just assume joint is better!

Thanks for mentioning the penalties! I wasn't aware of that distinction with extensions. Do you know roughly how much those penalties typically run? I'm worried now because I definitely didn't pay anything back in April when I filed the extension.

The failure-to-pay penalty is usually about 0.5% of your unpaid taxes per month, with a maximum of 25%. There's also interest that compounds daily at the federal short-term rate plus 3%. It's not catastrophic for most people with simple returns, especially if you're due a refund (in which case there's no penalty at all). But if you owe a significant amount, it can add up. Most tax software will calculate this automatically once you input when you're filing.

VITA is amazing, but most sites are only operational during the regular tax season (Jan-Apr). It can be hard to find VITA services for prior year returns in October.

January is almost always better because you defer the taxes for a whole year. I always push mine to January.