22 I use it every year for my seasonal business. It's definitely more work but WORTH IT if your income is lumpy. Instead of being required to pay equal amounts each quarter, you calculate based on what you've actually earned by the end of each quarter. My Q1 and Q2 payments are tiny, then Q3 and Q4 are massive when we hit our busy season. Your accountant is right that it's complicated though. You basically have to do a mini tax return for each quarter. I wouldn't try it without professional help the first time.

How much were the penalties? I have an LLC in Illinois too and I'm not sure if I filed correctly last year.

The penalties in Illinois were $100 for late filing plus the $75 annual report fee. So $175 total for a business that made exactly $0 that year. Pretty frustrating. The most annoying part is that the state filing deadlines often don't align with federal tax deadlines. In Illinois, the annual report is due by the first day of the LLC's anniversary month (when you formed it). So if you formed your LLC in March, your report is due by March 1st each year, regardless of tax filing extensions.

Banks generally only report interest income via 1099-INT if your account earned more than $10 in interest for the year. If your account had no activity and earned no interest (or less than $10), the bank typically doesn't report anything to the IRS about that account.

That's a really good point about spreading it out. I think I'll do the 5 paycheck option since that would be way less disruptive to my monthly budget. Do you think I need to specifically ask HR about the state tax withholding or would they typically handle both?

Definitely ask HR specifically about state taxes. In my experience, some payroll systems don't automatically adjust state withholdings when federal is increased. Just tell them you want to make sure both federal AND state taxes are being withheld appropriately for the HRA payment. They should be able to handle that for you.

I don't think that's accurate. The taxes you pay are based on the tax year they're for, not when you pay them. So taxes for 2023 income always count toward 2023 SALT deduction regardless of when you actually pay them.

What's a wash sale? Never heard of that rule before and I definitely bought some of the same stocks multiple times when they dipped.

A wash sale happens when you sell a security at a loss and then buy the same or a "substantially identical" security within 30 days before or after the sale date. When this happens, you can't immediately claim the loss for tax purposes - instead, the loss gets added to the cost basis of the replacement shares. This is definitely something that could affect your situation if you were frequently trading the same stocks. Many new traders get caught by this rule because it can make your tax situation much more complicated than simply adding up gains and losses. Your trading platform should mark wash sales on your tax documents, but they sometimes miss them, especially if you were trading similar securities across different platforms.

Thanks for sharing your experience! Did you just mail everything in or did you have to talk to someone on the phone? I'm dreading having to call them.

I started by mailing everything with delivery confirmation so I had proof they received it. When I didn't hear anything back after 6 weeks, I did have to call. Took about a dozen attempts over 3 days before I finally got through to a human. The person I talked to was actually pretty helpful - they found my documents in their system and said they were still in the queue for review. They added notes to my file about my call. About two weeks after that, I got a letter saying the issue was resolved and I didn't owe anything. So while calling sucked, it probably helped speed things up in the end.

Good point! Also worth checking Box 16/17 for state withholding too. Lots of people forget about state taxes when considering amendments.

Thanks for the tip! I just double-checked the form and there's no withholding in Box 4 or any of the state boxes. It looks like they treated me as a pure independent contractor with no tax withholding. Since I already reported the full income amount and paid the appropriate taxes, I'm going to follow the advice here and not file an amendment. I was worried the IRS might send me some kind of automated notice about a "missing" 1099, but it sounds like their system will see I already included the income. That's a relief!

Actually depends on what the payment was for. 1099-MISC is still used for certain types of payments like rent, prizes, medical payments etc. 1099-NEC is specifically for nonemployee compensation (like independent contractor work). So it could be correct depending on what services OP provided.