How much is the fee to set up a payment plan online? Is it better to just pay in full if you can?

The fee for setting up an online payment plan is currently $31 if you do direct debit payments. It jumps to $130 if you pay by check or money order. So yeah, if you can pay in full, that's always best to avoid fees and interest. Always better to pay in full if possible since the IRS charges both setup fees AND ongoing interest for payment plans. The interest compounds daily too, which adds up fast.

Yes, if you still have an outstanding tax debt when you file next year and are due a refund, the IRS will automatically apply that refund to your outstanding debt. It's called a tax offset. They'll send you a notice explaining that they applied your refund to previous tax debt.

Thanks for explaining! That's actually not terrible then, kinda like an automatic payment I guess. At least the money's not just disappearing into a black hole lol.

Does Cash App Taxes handle state returns too? Also wondering if they're reliable for more complicated situations like if I have some freelance income next year?

Yes, Cash App Taxes includes state returns for free as well. They can handle freelance income with Schedule C, but they do have some limitations. They don't support multiple state filings, foreign income, or more complex situations like farm income or at-home business depreciation. For most people with W-2 income, some investments, and side gig/freelance work, they work perfectly fine. Just make sure to check their list of limitations if you have anything unusual in your tax situation.

While I get your point, this isn't great advice. The 1099-B is reported to the IRS by the broker, so they actually do know about the $5 gain. If there are mismatches between what's reported to them and what you report, it can trigger automated flags in their system. I'm not saying they'll audit over $5, but why risk it when there are legitimate free options to report it correctly?

What about if my side hustle truly can only be done in certain locations? I make custom furniture and sometimes source special wood when visiting my parents in Oregon. These woods aren't available where I live.

That's a more defensible position. If you can document that you're sourcing materials unavailable in your area, and if this activity is central to your business model, you've strengthened your case for the business purpose of the trip. Keep receipts for the materials purchased, document why these specific materials are necessary for your business, and maintain records showing how these purchases translate into business products and revenue. Remember though - if visiting parents is still the primary reason for timing the trip, you might only be able to deduct the specific business activities (like the extra mileage to visit lumber suppliers) rather than the entire trip cost. The IRS will still look at whether you would have made this trip without the personal component.

I went through one last year for my consulting business. What saved me was having a detailed calendar showing all appointments before the trip was booked, emails setting up meetings, receipts with business purpose noted, and a time log showing how many hours were spent on business vs personal activities. The auditor specifically mentioned that having documentation created BEFORE the trip (proving business intent) was key.

That's not entirely accurate. The IRS has specific rules about converting business assets to personal use. While you do stop claiming depreciation, you need to document the conversion properly. If you're ever audited, you'll need to show when and how the asset was converted. The recapture issue isn't just about selling - it's about properly accounting for the asset's basis change.

You're technically right that there are "proper" ways to document everything, but in practice, for a small business owner with a vehicle, the IRS rarely digs into these details. I've been through two audits over the years and they never once questioned how I handled vehicles that went from business to personal use. The most important thing is consistency - just stop claiming any business expenses for that vehicle moving forward. Keep some basic documentation about when you stopped using it for business. The detailed recapture calculations really only matter when you sell the vehicle.

TurboTax can handle it, but you need to be careful. The software doesn't explicitly ask "Are you converting a business vehicle to personal use?" Instead, you'll notice that when you enter your vehicle information, it will ask about business use percentage. If you used it 0% for business this year vs. some percentage in previous years, it should recognize the change. But I'd recommend using TurboTax Live to get an expert to review your return if you're handling something like bonus depreciation conversion. It's easy to miss something important.

You can actually submit the ITIN applications (Form W-7) along with your tax return. That's what we did last year. BUT since ITIN processing takes time (up to 11 weeks or more), your refund will be delayed until the ITINs are processed. If you're concerned about meeting the deadline, file your return with the W-7 forms by the filing deadline. You don't need to file an extension unless you can't complete your actual tax return by then.

That's super helpful! I was worried we'd miss out on filing jointly this year because of the ITIN timing. Good to know we can submit everything together by the deadline.