I used it last year and honestly found it disappointing for quarterly payments. It's decent for annual filing, but the quarterly tool was basic and didn't save me much time. Plus it didn't sync well with my bank accounts. I switched to QuickBooks Self-Employed which is much better for tracking throughout the year and calculating quarterly payments accurately.

Thanks for the honest review! That's really helpful. Maybe I'll look into QuickBooks Self-Employed instead. I'm not doing anything super complicated tax-wise but just want something reliable that won't make me do all the math myself every quarter.

That's really helpful to know! So if this is my first year being self-employed, would I use my tax liability from last year when I was a W-2 employee as the safe harbor amount?

Exactly! Even though your situation has changed, you can use your total tax liability from last year's return (the total tax, not just what you owed at filing time) as your safe harbor amount. Divide that by 4 and pay that amount each quarter, and you'll be penalty-proof even if your self-employment income is significantly higher. Just remember that while this protects you from penalties, you'll still need to pay any additional tax you owe when you file your return. But at least you won't have those nasty underpayment penalties added on top!

Do those store-bought kits usually include multiple forms? I need to do about 15 1099-MISCs this year, and some packages I've seen only include 5 forms.

The kits vary, but most I've seen include 10-25 forms plus one or two 1096 summary forms. If you need more, you can usually buy additional forms separately. The important part is that once you have the template software, you can print as many forms as you need if you purchase additional blank forms. Look for kits labeled as "1099 & 1096 Kit for Laser and Inkjet Printers" or something similar. Just be sure to check that it's for the current tax year, as the forms do change occasionally.

This tripped me up last year! To clarify, what exactly is supposed to go on 1099-MISC now vs 1099-NEC? I have both contractors and some royalty payments.

I accidentally filed everything on 1099-MISC last year even though they should have been on NEC, and had to amend all of them. What a nightmare.

Thanks for these suggestions! We didn't have the LLC for long (formed it about 4 months before converting to C-Corp), so the startup expense angle might be relevant. And yes, we did personally guarantee a business line of credit during the LLC period. How would the at-risk rules potentially help in this situation?

Since your LLC was relatively new, you might be able to classify more expenses as Section 195 startup costs. This allows you to deduct up to $5,000 in the first year (subject to phase-out rules) and amortize the rest over 15 years. While not a complete solution to your problem, it could reduce the immediate tax hit. Regarding the personally guaranteed business debt - the at-risk rules essentially allow you to claim losses up to the amount you have "at risk" in the business. With a personal guarantee on business debt, you may have increased your at-risk amount, potentially allowing you to claim more losses against other income. This is complex territory though, so definitely have your tax advisor look specifically at your at-risk basis during the LLC period.

Doesn't the 199A deduction have income limitations though? If they made $675k in just two months as an LLC, I'm guessing they're well above the phase-out thresholds.

Which review course did you use? I'm trying to decide between Becker, Roger CPA, and Wiley.

This is terrible advice. The IRS absolutely cares about unreported income of any amount! They have automated systems that match reported income against your return. If the employer files a 1099-NEC and you don't report it, you'll likely get a CP2000 notice. Don't risk penalties and interest to save a few bucks in taxes.

I was speaking from practical experience rather than the technical rules. Yes, you're correct that all income should legally be reported. The automated matching system does exist, but in reality, very small discrepancies often don't trigger further action due to the IRS's limited resources. However, I should have been clearer - it's always best practice to report all income regardless of amount because it's the law, and because even small unreported amounts can cause problems if there are other issues with your return that trigger a review.

You have a few options. If you know the employer will issue a 1099-NEC, you'd report it on Schedule C and pay self-employment tax. However, for a one-time payment where your status is unclear, you could report it as "Other Income" on Schedule 1, Line 8z. This reports the income without self-employment tax.