What about the tax debt situation? Would an accountant help navigate that better than tax software?

For the tax debt situation specifically, an accountant can provide strategic advice, but they don't have any special access to the IRS. They'd likely advise you to contact the IRS directly to set up a payment plan or explore settlement options. A tax professional might be able to help determine if any of the debt can be addressed through penalty abatement requests or other relief programs. They can also advise on whether filing jointly or separately makes more sense given the outstanding debt. But for actually resolving the debt, you'll still need to work directly with the IRS one way or another.

The marriage penalty isn't as bad as it used to be after the 2017 tax changes, but it can still hit high earners. At their income level (over $400k combined), they could definitely face some penalty. I'd suggest looking at the actual tax brackets for 2024 and calculating both ways. Don't just assume joint is better!

That's a really good point - I did buy this van new for around $67,000 last year. Maybe I entered the purchase price somewhere I shouldn't have and then the software added depreciation or something on top of it? I'm going to go back and look for that. Maybe it's also accounting for future depreciation in some weird way? Thanks for the suggestion!

You're welcome! Yeah, that's almost certainly what happened. The purchase price should only be entered in the asset/depreciation section, not as a direct expense. The software will then calculate the correct amount you can deduct each year based on depreciation rules. If you bought a $67k van, the software is probably trying to depreciate it plus adding your maintenance costs plus calculating mileage. Triple counting! Once you fix where you entered the purchase price, everything should look more normal.

Is that 65.5 cents still accurate for 2024 taxes? I thought I saw somewhere that the IRS changed the rate again.

Wait so I should use different software for the current year vs previous years? I'm trying to understand the process of catching up.

You can use the same software for all years, but you'll need to file each year separately. Most tax software has options for filing prior years. You'll just need to make sure you're using the correct forms for each tax year. When you start the process, you'll usually see an option like "File 2024 taxes" or "File for a previous year." You would need to go through the whole process once for each year (2022, 2023, 2024). Just make sure you have the W-2 forms for each corresponding year since the numbers will be different.

The normal deadline is April 15th each year for the previous year's taxes (so April 15, 2025 for your 2024 taxes). But if you're owed a refund, you actually have 3 years to file before you lose the money. So right now in 2025, you could still file for 2022, 2023, and 2024. If you owe money instead of getting a refund, then filing late can result in penalties. But since you're just starting out and probably don't make a ton of money, it's very likely you'll get refunds.

But what if you really need that money in the meantime? Not everyone can afford to overpay by 20%. Wouldn't it be better to try to get it right?

That's a totally valid point. It really depends on your financial situation. If cash flow is tight, then absolutely try to be more precise with your estimate. Use your previous year's return as a guide and adjust for any major changes in income or deductions. For those who can swing it though, overpaying provides a stress-free extension. Another approach is to aim for that 90% threshold mentioned earlier - pay enough to cover 90% of your expected tax, which should protect you from the more significant penalties. Either way, the key is making a reasonable effort to estimate correctly based on the information you have at the time.

This is so important! I made this mistake with California taxes and ended up with penalties. Does anyone know a good resource that breaks down the requirements by state?

This is such a good point. Most tax advice seems geared toward either really poor people qualifying for earned income credits or rich people with complex investments. What about us regular folks making between $60-120k? We need help too!

Exactly! The middle class gets squeezed the most it seems. We make too much to qualify for many credits but not enough to benefit from fancy tax strategies with investment properties and such. I think most people in our situation just don't know what options we have available. I'd love practical advice like "if you make X amount, here are the 3 most impactful things you can do to reduce your tax bill" with actual numbers and examples. Or even a checklist of things to consider based on your life situation (married, kids, homeowner, etc).

I switched from TurboTax to FreeTaxUSA last year and saved like $120 for basically the same service. But I'm always nervous about missing something too. Would love to know from an actual CPA what tax situations are too complex for software.