Which state are you in? I'm in California and haven't even looked into the state requirements yet. Do you file W2s with the state tax agency separately?

I'm in New York, but most states have their own requirements. In California, you'd need to submit your W-2s to the Employment Development Department (EDD), not just the federal SSA. California actually has some of the stricter penalties for late filing - they can charge $50 per W-2 plus potentially 10% of the tax that was withheld if you're very late. Their deadline is the same as the federal one (January 31st), but the submission process is completely separate. Check the California EDD website for their specific filing instructions.

Are those services expensive? I only have 2 part-time employees and do everything manually because I thought payroll services were overkill.

I second this. UltraTax has better international diagnostics, but CCH Axcess actually has the best guided worksheets for Form 5471 Schedule J and E calculations in my experience.

Thanks for mentioning CCH Axcess - I haven't tried their international modules yet. I still supplement UltraTax with manual Excel templates for some of the more complex PFIC calculations, especially when dealing with excess distributions from foreign mutual funds. The software's built-in calculations don't always capture all the nuances.

7 Does VITA actually help with learning business tax prep though? I thought they only do basic 1040s and don't handle Schedule C filers?

20 You're right that VITA primarily focuses on basic returns, though some sites do handle simple Schedule C returns with limitations on income amounts and deductions. It won't give you comprehensive business tax experience, but it does provide excellent training in the fundamentals and client interaction skills. For business tax experience specifically, you might consider trying to work part-time at a local CPA firm during tax season. Many firms hire seasonal preparers and will train you on their procedures. Another option is finding a mentor through your local chapter of the National Association of Tax Professionals (NATP) or the Texas Society of Enrolled Agents.

13 I started out charging by form and it was a DISASTER. Clients hated the uncertainty and I had to have awkward conversations when additional forms were needed. Now I do tiered flat fees based on return complexity (basic W-2 only, itemized deductions, Schedule C, etc) and both me and my clients are much happier.

This is a really good point. My brother ignored the state notice after resolving the federal one and ended up with state penalties that were worse than the federal ones.

That's really helpful, thanks! If I tell them I'm waiting on more documentation, do you know approximately how much extra time they typically give?

In my experience, they usually give an additional 30 days if you ask for an extension and explain why. Be very specific about what documents you're waiting for and when you expect to receive them. I included a line in my response letter that said "I am awaiting final documentation from XYZ Casino which they have confirmed will be sent by [specific date]. I respectfully request an extension until [date + 1 week] to provide this final documentation." They approved my extension request without any issues. The key is being specific rather than vague about what you're waiting for and when it will arrive.

How much did TaxAct charge for each prior year? And did you have any issues with the 2017 filing from the accountant?

TaxAct charged around $60-70 per year for their business editions when I used them, though prices may have changed. I found it reasonable considering the alternatives. For the 2017 return, the accountant charged me $350, which was actually less than I expected. There weren't any issues with the filing itself, but they discovered I had been calculating depreciation incorrectly on some equipment, which affected the subsequent years. This meant I had to make some adjustments to my 2018-2020 returns as well. If you have depreciating assets, make sure you're tracking them consistently across all tax years - that's something the software won't necessarily flag for you.

UltraTax is professional-grade software used mostly by accounting firms, not really meant for individuals. For DIY, stick with TaxAct, TaxSlayer or H&R Block's prior year versions as others suggested. Much more user-friendly and way cheaper.