I didn't even think about quarterly taxes! We haven't been paying anything throughout the year. Is it too late to fix this for last year? And how do we figure out how much to pay each quarter going forward?

It's too late to fix last year's quarterly payments now, but you can avoid penalties going forward by starting them this year. For most resellers, you need to pay estimated taxes if you expect to owe $1,000+ at tax time. For calculating the amount, you can either pay 100% of last year's tax liability divided into four payments (the "safe harbor" method), or 90% of what you expect to owe this year. I personally set aside 30% of my net profit each month and make payments on the quarterly due dates (April 15, June 15, September 15, and January 15). There's a form called 1040-ES that helps with calculations, or your tax software should have an estimated tax calculator. Start now and you'll avoid the shock next tax season!

And sales tax! If you're selling online, the marketplace might collect it for you (like eBay or Amazon) but if you sell directly you might need to collect and remit sales tax depending on your state and sales volume. That tripped me up my first year.

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.

Would the IRS actually know when I "discovered" the error though? Like if I file the amendment in a month, couldn't I just say I discovered it then? Not trying to be deceptive, just wondering how they determine when you knew about a mistake.

Technically the IRS doesn't know when you discovered the error unless there's some obvious paper trail (like they sent you a notice about it). However, I always advise being honest because if you ever did face an audit or review, lying about when you discovered an error could significantly compound your problems. In practice, filing an amendment within 1-2 months is generally considered prompt enough that the timing wouldn't be questioned. The IRS is primarily concerned with willful, long-term neglect - like someone discovering an error and waiting a year or more to correct it. Your scenario of waiting a few weeks for your refund before filing the amendment is completely reasonable.

That's surprising, I thought the IRS computer systems would be smart enough to connect an amendment with the original return! Thanks for sharing - definitely reinforces the idea of waiting for the refund first.

Does the IRS Free File Fillable Forms have any income limits? I make around $85k and often get locked out of the "free" options.

The Free File Fillable Forms have no income limits at all - they're available to everyone regardless of income. That's different from the IRS Free File Program partners (like TurboTax Free File, etc.) which typically have a $73,000 income limit. The trade-off is that Fillable Forms provide no guidance or calculations - you're basically just filling in digital versions of the paper forms. You need to know which forms to complete and how to do the calculations yourself. Form 8880 for the Retirement Savings Credit isn't terribly complicated though, especially if you're just claiming for yourself and spouse.

The 2023 income limits are actually a bit higher now: $73,000 for married filing jointly and $36,500 for singles (full phase-out points). But yes, checking if you're truly eligible is important!