Thanks for the tip about saving for taxes! Do you think I should open a separate savings account just for setting aside tax money? Also, do you know if I need to make quarterly payments or can I just pay everything when I file next year?

Opening a separate savings account for taxes is honestly one of the smartest moves you can make! I wish I had done that when I first started freelancing. It helps you mentally separate that money so you're not tempted to spend it. For quarterly payments, it depends on how much you'll earn this year. If you expect to owe more than $1,000 in taxes for the year, you should make quarterly estimated payments. Otherwise, you might get hit with an underpayment penalty. The IRS has a form called 1040-ES that helps you calculate these payments. As a new freelancer, it's definitely worth looking into since you don't have an employer withholding taxes from each paycheck.

They're totally different forms for different work relationships. A W-4 is for employees (people who get a regular paycheck with taxes already taken out). A W-9 is for independent contractors (people who get paid the full amount and have to handle their own taxes). If the company is asking for a W-9, that means they're treating you as an independent contractor, not an employee. This affects your taxes a lot - you'll pay more in self-employment taxes, but you can also deduct business expenses. Make sure this classification is correct for the type of work you're doing!

Thanks for the suggestion! I actually did check my spam folder already, but no luck there. I also looked through all my Robinhood emails from January through now and don't see anything about tax documents being ready. I'm starting to think I might just need to manually report it based on my monthly statements.

That's not accurate. The threshold is $10 - if you receive LESS than $10 in dividends, they don't have to send a 1099-DIV. The OP received $54, so Robinhood should definitely have sent one.

Thanks for the podcast suggestions! Do the podcasts you mentioned stay current with tax law changes? Also, does Kohler's book cover anything specifically about online businesses?

The podcasts do regular update episodes whenever significant tax law changes happen, which is super helpful. They did comprehensive episodes on all the Tax Cuts and Jobs Act changes and more recently on the Inflation Reduction Act impacts on businesses. Kohler's book has a whole chapter dedicated to online and digital businesses, covering things like sales tax nexus issues for selling across state lines, deducting website expenses, and tax implications of digital products versus physical goods. The newer editions have expanded this section significantly.

Tax software is great for filing but terrible for planning. You need to understand the concepts BEFORE you make business decisions. I learned this the hard way when I structured my business poorly and ended up paying thousands more in taxes than necessary. Software just processes what already happened, it doesn't help you make strategic decisions.

Wouldn't filing an identity theft form when your identity wasn't actually stolen cause more problems? I'm worried that might flag my account in a bad way for future years.

That's a good question. When you can't verify your identity through normal channels, the IRS actually recommends filing Form 14039 with the box checked for "I received a notice from the IRS and believe someone may have used my SSN." Since you received notices about identity verification, this is technically accurate. It doesn't create problems for future years - actually, it creates an extra layer of protection. After resolving my case, they added additional security to my tax account and gave me a special PIN to use for future filings. Made me feel more secure, honestly!

I'm a tax preparer and yes, this can definitely help! If we prepared your return, we can go with you to the appointment and bring our records which often helps verify everything more quickly. We can also contact the Practitioner Priority Service on your behalf, which is a special IRS hotline only for tax professionals that usually has much shorter wait times.

Do you know if there's a waiting period for the Fresh Start Initiative? Like, can you apply if you just became unable to pay your taxes this year, or do they expect you to have been struggling for a certain amount of time?

There's no specific waiting period for the Fresh Start Initiative programs. You can apply as soon as you realize you can't pay your tax debt in full. The qualification is based on your current financial situation, not how long you've been struggling. What matters more is demonstrating that you can't pay the full amount without causing financial hardship. This is where documenting your income, expenses, assets, and debts becomes important. They want to see that you're making a good faith effort to comply with tax laws going forward, but genuinely can't address the past debt in full immediately.

I used a tax pro for my Offer in Compromise under Fresh Start. Cost me $1,500 but they got my $32k tax debt settled for $8k, so definitely worth it in my case. If you're just doing a simple installment agreement though, you might be able to handle it yourself.