That's a smart idea! How did you verify they knew what they were doing though? I'd be nervous having another student handle my taxes. Did they make you sign any kind of waiver in case they made a mistake?

I checked that the student had completed advanced tax courses, including international taxation, and was in the master's accounting program. The professor supervision was key - I actually met with both of them for the initial consultation, and the professor reviewed the final forms before submission. No formal waiver was required, but we did have a simple email agreement outlining what they would do and the fee. The accounting program treated this as a practical training opportunity, so they were motivated to get it right. The student was actually incredibly thorough and found deductions I didn't know I qualified for, even with the non-resident limitations.

What software did you try using? I was thinking about trying TurboTax for my amendment but now I'm nervous...

Doesn't setting aside 30% of everything mean you're overpaying by a lot? Especially after deductions and everything, isn't the actual tax rate much lower than that?

You're right that it often means setting aside more than you'll ultimately owe, but that's intentional. The 30% covers federal income tax, self-employment tax (15.3%), and usually state income tax too. After deductions, you might end up with a lower effective rate - maybe 20-25% all-in for many people. But I've found it's much better to slightly overpay than to come up short. Plus, knowing that my taxes are covered gives me peace of mind. If I have extra in my tax savings account after filing my annual return, I just transfer some of it to my retirement account or reduce the next quarter's payment.

For quarterly estimated taxes, you'd select "Estimated Tax" as the reason for payment and "1040-ES" as the form number. Then you'll need to select the tax year and quarter you're paying for. It's actually pretty straightforward once you know which options to pick!

Thanks for the insights from your experience! Just to clarify - if my kids are receiving both W-2s from our businesses AND have their own separate self-employment income, which version would they need? Also, does TaxAct make it easy to handle the investment income reporting for all of us?

If your kids have both W-2 income and separate self-employment income, they'd definitely need the Self-Employed version. The W-2 part is easy with any version, but once you add self-employment income with business deductions, you need the higher tier. TaxAct does handle investment income reporting pretty well in my experience. All versions (even Deluxe) include basic investment reporting for things like dividends and capital gains. The interface walks you through entering 1099-DIV and 1099-B forms. If you have more complex investments like rental properties or partnerships, you'd need the Self-Employed version for those too.

I've used both. TurboTax is more user-friendly but WAY more expensive, especially for multiple returns with self-employment. TaxAct Self-Employed is about half the price of TurboTax Self-Employed and covers basically the same forms. TaxAct's interface isn't as pretty but gets the job done.

This is super helpful, thank you! My 1099 income is around $25k annually, and I'm paid biweekly at my main job, so I think I'd need about $275 in extra withholding per check based on your formula. I'll definitely try this approach instead of dealing with quarterly payments.

That sounds about right for your situation. Just make sure you're accounting for any business deductions you'll claim on Schedule C, as those will reduce your taxable self-employment income. If you have significant business expenses, you might be able to reduce that extra withholding amount a bit. For example, if you have $5k in legitimate business expenses, you'd only need to calculate the extra withholding on $20k instead of the full $25k.

This is really good advice. I had the same issue with H&R Block's software last year - somehow my 1099 income wasn't flowing correctly to Schedule SE. I ended up having to file an amended return because the self-employment tax was missing entirely.

I never thought about the Social Security angle! Do they provide the same level of detail as the IRS transcripts would? I don't have my final pay stubs unfortunately - learned my lesson about keeping those records now.

The SSA records won't have the same level of detail as IRS transcripts. They typically just show your earnings that were reported for Social Security purposes, but not tax withholding amounts. IRS wage and income transcripts are definitely more comprehensive for tax filing purposes. If you've already accessed your IRS transcripts, those are your best resource. The Social Security option is more of a backup if you couldn't get the IRS information for some reason.

I used FreeTaxUSA for 2020 and 2021 returns that I filed late. It was actually really good for prior years - each year costs around $15 for federal (state is extra). The interface for entering W-2 info from transcripts was straightforward, and they have decent support if you get stuck.

Thanks for sharing your experience! That's actually much cheaper than what I was seeing with TurboTax for prior years. I'll give FreeTaxUSA a try with my transcript information.