That's smart! Do you just use a regular spreadsheet or is there a template somewhere? Also, how do you handle documents that have multiple numbers on them like investment statements?

I just use a regular Excel or Google Sheets spreadsheet that I created myself. Nothing fancy, just those columns I mentioned. For complex documents like investment statements, I expand my tracking approach. I create sub-rows under the main document listing key figures (dividends, capital gains distributions, etc.) and note the specific form boxes where those numbers should go. Sometimes I even take screenshots of the tax software entry screens and note which box on my document goes to which field in the software. It's a bit more work upfront, but it saves me tons of confusion, especially for documents that have dozens of figures on them.

I used IRS Free File last year with W-2, some freelance income, and a small amount of stocks. It worked fine for me! Just make sure you go through the IRS website (irs.gov/freefile) rather than going directly to the tax company sites. If you go direct, they sometimes don't show the free options.

That's an interesting option I hadn't thought about. Would I still need to file anything special for 2022 and 2023 to show that I'm now applying that excess to 2024? Or does just paying the penalty take care of it?

You would need to file Form 5329 for tax years 2022 and 2023 to pay the 6% excise tax for each of those years. Then when you do your 2024 taxes, you would indicate that you're applying prior year excess contributions to your 2024 contribution limit. The important thing is that you don't make a full contribution for 2024 if you're applying the excess from 2022. For example, if the 2024 limit is $7,000 and you're applying $4,630 from 2022, you would only be able to contribute an additional $2,370 for 2024. It's a good option if you're short on cash but still want to maintain your retirement savings.

The Roth income limits also increased for 2024. For single filers, the phaseout range is now $146,000-$161,000. So if OP's income is similar to 2022 (around $140k), they might be fully eligible this year without any phaseout.

That's a good point. With the new higher income phaseout ranges, OP might not run into the same problem for 2024. But they still need to address that 2022 excess contribution issue regardless of their current situation. Leaving it unresolved means continuing to pay that 6% penalty year after year.

Wait really? I've been driving for UberEats for 6 months and only counting miles when I have food in the car. So I can count ALL the miles when I'm logged into the app and available for deliveries?

Yes! Any miles driven while you're actively working (logged into the app and available) count as business miles, even if you don't currently have a passenger or food in the car. The IRS considers this "on the clock" time. The only miles you can't count are your personal trips or your commute to your starting point before logging in. But once you're logged in and working, those "empty" miles between rides or deliveries are absolutely deductible business miles. This is a huge thing many drivers miss! Make sure you're tracking all those miles - it can make a big difference in your tax bill.

I was worried about the same thing last year, so I asked my brother-in-law who's an accountant. He said just make sure you have good documentation for your mileage. Like a detailed log with dates and miles. The IRS knows rideshare drivers have high expenses, especially with mileage, so the low taxable income by itself isn't a red flag. Just make sure you can back up your numbers if they ask.

That's a relief to hear! I've been using MileIQ to track all my driving so I should have pretty good records. I guess I was just shocked at how much difference the deductions made. Thanks for the reassurance!

Thank you for this suggestion! I didn't even think about exemptions. Do I need to apply for these or are they automatic? Our county website is pretty awful and hard to navigate.

You almost always need to apply for exemptions - they're rarely automatic. Most homestead exemptions require an application within the first year or two of occupancy. Your county's tax assessor's office should have the forms, even if their website is terrible. It's worth calling them directly or visiting in person since these exemptions can save you significant money every year. Some counties also have partial exemptions for energy-efficient new construction, so ask about that too if your home has any green features. Don't wait on this - many exemptions have filing deadlines that, if missed, mean you'll have to wait until next tax year.

This is such an important point! I'm in Illinois and our property taxes are always paid in arrears. Made for a very confusing first year in our new build because the tax bills didn't match what we expected.

Is this something you have to specifically request? I paid a similar notice last year and no one mentioned anything about penalty abatement to me. I had a perfect tax record before that too.

Yes, you absolutely have to specifically request penalty abatement - the IRS will almost never offer it voluntarily! It's not widely advertised, but it's an official IRS administrative waiver. Many people qualify but never know to ask for it. If you paid penalties within the last 2-3 years and had a clean record before that, you might be able to request a retroactive abatement and get those penalties refunded. You'd need to call the IRS and specifically request "First Time Penalty Abatement" for the tax year in question, explaining that you had a good compliance history before that. It's definitely worth trying!

This is solid advice. I work in a tax office and we see this all the time. People bring in final collection notices for issues that could have been easily resolved months earlier. By that point, options are much more limited and the amounts owed have usually increased significantly.