Thank you so much for this checklist! I definitely didn't realize I needed my bank statements showing interest. How much interest needs to be reported? My savings account only earned like $25 last year.

You should report all interest income, even small amounts. Your bank should have sent you a 1099-INT form if you earned more than $10 in interest. Even if it's only $25, it's technically required to be reported. Don't stress too much about small amounts though. The IRS is mainly concerned with larger discrepancies. Just enter what you have documented and keep good records going forward. Tax software makes it really easy to enter these small amounts.

It depends on your situation, but generally if you're single and earned less than $12,950 in 2022, you're not required to file. HOWEVER, you should probably file anyway because you'll likely get back all the federal taxes that were withheld from your paychecks!

What specific things should we include in our partnership agreement regarding the payment for performances? We have a basic agreement but didn't get that detailed.

You should specifically include language about "guaranteed payments" for services performed by partners. This would clearly state that your partner receives $X per performance, regardless of the partnership's profitability, as compensation for services rendered in their capacity as a partner. You should also include how profits and losses will be allocated after accounting for these guaranteed payments. In your case, it would specify that after paying all performers (including your partner) and other business expenses, the remaining profits are split 50/50. Having this clearly documented will make your tax filings much more straightforward and defensible if ever questioned by the IRS.

This is really important advice. First-time business owners often miss this and end up with underpayment penalties. I've found that setting aside about 30% of net income for taxes is a good rule of thumb for most partnerships.

Is that $1,000 per partner or for the partnership as a whole? And how do we calculate how much to pay each quarter?

Does this mean I should be withholding more than 10% from my current unemployment checks? The system only gives me option for 10% or nothing, no way to withhold 22% or whatever my actual bracket is.

You're right that the unemployment system typically only allows for the 10% withholding option, which is frustrating. Since you can't increase the withholding percentage through the unemployment system, you have two main options: You can set aside additional money yourself with each unemployment payment - essentially creating your own additional withholding. For someone in the 22% bracket, you might want to save an extra 12% of each payment. Alternatively, you can make quarterly estimated tax payments to the IRS using Form 1040-ES. This allows you to send in additional tax payments throughout the year to cover the gap between the 10% being withheld and what you'll actually owe.

I use the tax calculator on smartasset.com instead. It lets you input both regular income and unemployment separately and gives a pretty accurate estimate of what you'll actually owe. Way better than the IRS one for people with mixed income sources.

Oh this is super helpful! I just checked my TurboTax account and found exactly this problem - I had set up an account for my ex years ago and somehow that routing info got saved as my primary. So weird that TurboTax would keep outdated bank info for years without confirming it's still valid! How long did it take from when you discovered the problem until you got your refund check?

From discovery to actually receiving the check was about 10 weeks total. The most frustrating part was that the "Where's My Refund" tool was completely useless during this time - it just kept saying the refund was sent to my bank account for weeks after the bank had already rejected it. If I were going through this again, I'd skip the frustration of trying to call myself and use one of the services others mentioned. The not-knowing was the worst part, and getting actual confirmation that the IRS was aware of the rejection and processing a check would have saved me a lot of anxiety.

I actually managed to get TurboTax to help after a LOT of escalation. The trick is to not deal with the first-level support. Ask specifically for a "Tax Specialist" and mention that the software incorrectly transmitted your banking information. They ended up giving me a direct contact at the IRS and even followed up to make sure my issue was resolved. They also refunded my TurboTax fees and gave me free filing for next year. But it took about 6 calls and a lot of insistence that this was their error, not mine.

Did you use a tax professional to help set up your payment plan or did you negotiate it yourself? I'm in a similar situation ($56k debt) but worried about saying the wrong thing if I try to handle it myself.

I initially tried to set it up myself, but I made some mistakes on the financial forms that got my first proposal rejected. After that frustration, I hired a tax resolution specialist who helped me properly document my financial situation and negotiate terms that worked for my actual circumstances. It cost about $1,800 for their services, but they saved me way more than that by properly structuring everything. If your situation is straightforward and you're comfortable with financial forms, you might be able to handle it yourself. But in my experience, having a professional who knows exactly what the IRS is looking for made a huge difference in both the monthly payment amount and my stress level. They also helped identify which penalties could be abated, which I wouldn't have known to ask about.

100% this. My parents got scammed by one of those "we'll settle your tax debt for pennies on the dollar" companies. They paid $4500 upfront and got literally nothing but a standard installment agreement they could have set up with a 20-minute phone call. Complete ripoff.

Is there a specific credential or certification I should look for when hiring someone to help with tax debt? I see all these different titles - tax attorney, CPA, EA, tax resolution specialist - and don't know which is most appropriate.