Her husband passed away so she can't file separately going forward, she'll be filing as single or qualifying widow. But your advice about responding to IRS notices is spot on! The worst thing is to ignore them.

This happened to my sister too! The dealership claimed it was an "accounting error" but had been collecting both payments for 4 months before she caught it. She had to threaten legal action to get refunded.

Does this apply if you're not fully self-employed? I use my car about 30% for a side gig but have a regular W-2 job too.

Yes, it absolutely applies even if you're not fully self-employed! The business use of your vehicle for your side gig would be reported on Schedule C along with your other business expenses and income. You'd only deduct the percentage used for business - so in your case, you'd track all your mileage and then deduct 30% of it at the standard rate. Make sure you keep detailed records showing the date, starting point, destination, purpose, and mileage for each business trip. The IRS is particularly strict about vehicle deductions, so good documentation is essential. There are several good apps like MileIQ or Everlance that can help you track this automatically.

1 These are all really good ideas! I hadn't thought about the mortgage skip-payment option. I'll definitely look into that. I'm also considering selling some stock I've been holding, even though the market is down a bit right now. I guess paying the IRS has to take priority over ideal investment timing. Did you find that the IRS was generally reasonable to work with? I've been anxious about dealing with them directly.

13 In my experience, the IRS representatives were surprisingly reasonable and helpful once I actually got through to them. They've dealt with this situation thousands of times and have standard procedures in place. The key is being proactive and honest. I explained my situation clearly, had all my numbers ready, and proposed a solution rather than just asking what to do. They responded well to that approach. Most importantly, never ignore IRS notices or deadlines - that's when they become much less flexible.

1 That's a good point. I've done a preliminary calculation for state and we actually should be getting a small refund there (about $1,200). I guess that will help offset the federal bill a tiny bit. The majority of our issue was federal withholding that didn't account for some investment income and a side business I started last year.

7 Also, don't forget to check if you qualify for state-level payment plans too. Some states offer better terms than the IRS, with lower interest rates or longer payment periods. When I had a similar issue, I was able to set up a 24-month payment plan with my state that had a much lower interest rate than the federal one.

Thanks for bringing this up! Do you have any recommendations for figuring out the specific tax rules for different countries? I'm considering properties in either Portugal or Greece.

For Portugal and Greece specifically, you'll want to look into their "Golden Visa" programs if you're investing enough, as these can offer some tax advantages for foreign investors. Portugal has a decent tax treaty with the US, and they offer a Non-Habitual Resident tax regime that might benefit you. For accurate country-specific advice, I strongly recommend consulting with a tax professional who specializes in expat taxes and has specific experience with those countries. Local property taxes, transfer taxes, and income tax rules vary significantly by country and sometimes even by region within countries. In my experience, spending money on good tax advice before making an international property purchase saved me from some expensive surprises later.

I did one in 2023 and it was definitely complicated but doable. The key was using a qualified intermediary who handled all the details. The hardest part was finding suitable replacement properties within the 45-day identification period in the crazy market. You absolutely need to follow the timelines exactly - no extensions. I almost lost my tax deferral because my closing got delayed, but we pushed hard to get it done just under the wire. But remember, as others mentioned, this won't work for foreign property - has to be US to US.

With FreeTaxUSA, you can absolutely do this! Complete both your federal and state returns in the software, but when you get to the filing stage, only select to e-file your state return. There should be an option to "file state only" somewhere in the filing process. For your federal, make sure you fill out and submit Form 4868 for the extension and pay your estimated amount owed. You can either generate this form through FreeTaxUSA or use the IRS direct pay website to make the payment, which automatically gives you the extension.