


Ask the community...
Would it make sense to increase 401k contributions from your W2 job to potentially drop your combined income into a lower tax bracket? That might help reduce the tax hit on some of that self-employment income. Just a thought...
Something else to consider - if your self-employment income is consistent month-to-month, you might be better off making monthly estimated payments instead of quarterly. I started doing this and it's easier to manage cash flow and avoid setting aside large chunks for quarterly payments. The IRS doesn't care as long as you've paid in at least the minimum by each quarterly due date.
That's interesting! I hadn't thought about doing more frequent payments. My SE income does tend to be somewhat consistent monthly, so this could help with budgeting. Is there any downside to making monthly payments instead of quarterly?
No real downside to making monthly payments. The IRS will credit you for whatever you've paid by each quarterly due date. The only minor inconvenience is having to make more payment transactions, but that's easy with EFTPS (Electronic Federal Tax Payment System). The biggest advantage is psychological - setting aside smaller amounts more frequently is easier than coming up with a big payment every three months. Just make sure you keep good records of all payments. I use a simple spreadsheet to track payment dates, confirmation numbers, and running totals for the year.
Just to add another perspective - I've been in this exact situation (claiming my partner's child from previous relationship). Make sure you also look into filing as Head of Household if you qualify, since that gives you better tax rates than filing as Single. For your partner to claim HOH status, they need to: 1) Be unmarried (domestic partnerships generally qualify as unmarried for IRS purposes) 2) Pay more than half the cost of keeping up the home 3) Have a qualifying person (the child) live with them for more than half the year This made a huge difference for us - almost $2,000 in additional tax savings beyond just the child tax credit!
Thank you for mentioning the Head of Household status! We hadn't considered that. Do you know if my partner would need any specific documentation to prove he's been supporting my oldest? We don't have formal custody arrangements since the biological father isn't in the picture at all.
You don't need formal custody arrangements in this case since there's no other person claiming the child. The key is being able to show that your partner maintained the household and supported the child if ever questioned. It's good practice to keep records showing your partner paid household expenses (rent/mortgage receipts, utility bills in their name) and child-specific expenses (school records, medical bills, childcare receipts). Also helpful are any documents showing the child's address matches yours (school records, medical records). The IRS doesn't require you to submit these with your return, but they're good to have if you're ever audited or questioned.
Has anyone mentioned the EITC (Earned Income Tax Credit)? This can be significant $ depending on your partner's income if they qualify. For 2025 with two qualifying children, the max EITC is around $6,600 if income falls in the sweet spot. Not professional advice but worth looking into.
Has anyone noticed they're getting interest paid on their super late refunds? I filed my 2020 return in early 2023 and got like an extra $200 in interest when my refund finally came through. The interest isn't taxable until the following year too, which is nice.
Wait really? I didn't know the IRS pays interest! Do they just add it automatically or do you have to request it somehow? I'm still waiting on my 2021 refund too.
They add it automatically! You don't have to do anything to request it. The interest starts accumulating from the original filing deadline for that tax year (so for 2021 returns, interest started accumulating from April 18, 2022). They'll keep adding interest until the day they issue your refund. Just be aware that the interest payment IS taxable income, but you'll report it on next year's return. They'll send you a Form 1099-INT in January 2026 for any interest paid during 2025. The current interest rate is pretty decent too - around 7% annually.
Quick tip - if your return shows "still processing" that's actually better than "being processed." "Still processing" means your return is in the pipeline and moving along. "Being processed" can sometimes indicate it's been flagged for manual review. Also check your tax transcript online if you can access it - sometimes there are codes there that give more info than the refund tool.
Thanks for this! I just created an account on the IRS website to check my transcript, but it says I need to wait for a verification code in the mail. Is that normal?
One option nobody's mentioned yet is checking if the vendor deposited your check. If they did, you might be able to get their banking information from your bank statement. Sometimes you can see the account number or at least the bank they use. With that info, you might be able to find more details about their business. Worth a shot if you're completely stuck.
That's a really smart idea I hadn't thought of! I just checked our business account online and can see the check was deposited at First National Bank, but I'm not seeing any account details. Is there something specific I should ask our bank for to get more information?
You'd want to contact your bank and ask for the "deposit information" from the cleared check. Sometimes they can provide the routing and account number where it was deposited. Not all banks will share this, but many business accounts give you access to this information. Once you have that, you still won't have their TIN, but you'll have more documentation to show the IRS that this was indeed a real vendor who received payment. The bank info combined with their name, email and phone gives you a stronger paper trail.
Have you tried being more direct with them? Sometimes I've had success by simply explaining that their request is illegal. You could send them something like: "I'm legally required to file a 1099 for the services you provided. Refusing to provide a W-9 is actually a violation of tax law and could subject you to penalties from the IRS. I'm not asking you to pay additional taxes - you're always responsible for your own tax obligations on income earned.
This is good advice. Also mention that if they refuse to provide a W-9, you're required to do backup withholding at 24% of any FUTURE payments and report them to the IRS. Even though you can't do that for past payments, just knowing you're aware of the requirements might make them reconsider.
NeonNinja
Just want to add that if you're using TurboTax, there's a specific way to handle this. I had a similar situation last year. When you get to the income section, choose self-employment/1099-NEC income. Even if you don't have the actual forms for all income, enter the ones you have first. Then, there's an option to "Enter income not reported on tax forms" - use this for your other income. It won't ask for business info for those entries. Keep good records though - names, addresses, amounts paid, dates, etc. just in case.
0 coins
Emma Anderson
ā¢Thanks for explaining the specific steps in TurboTax! Does FreeTaxUSA have a similar option? I'm still deciding between the two platforms.
0 coins
NeonNinja
ā¢Yes, FreeTaxUSA has a very similar option. When you get to the income section, go to the self-employment/business income area. Enter your 1099-NEC forms first if you have them. Then there's an option for "Other business income not reported on Form 1099-NEC" where you can enter a total amount for income without forms. FreeTaxUSA actually has a pretty straightforward interface for this specific situation and might save you some money compared to TurboTax if you have a lot of forms to enter.
0 coins
Anastasia Popov
One thing nobody mentioned - make sure you're still categorizing your expenses properly across all income sources! I made the mistake of just lumping all my income together one year and then tried to deduct expenses against it, and it got messy during an audit. Even if you're reporting some income without the 1099s, still track which expenses go with which income streams. It'll make your life way easier if you ever get questioned.
0 coins
Sean Murphy
ā¢This is 100% true. I didn't properly categorize expenses last year, and I'm paying for it now with an audit. The IRS wants to know which expenses correlate to which income streams. Super important advice.
0 coins