That's actually super helpful to know! I definitely had taxes taken out of each check. Do you know if I need to file state taxes too? I'm in Illinois if that matters.

Yes, you should file state taxes for Illinois as well. Illinois has a flat income tax rate (currently 4.95%), and similar to federal taxes, if you had state taxes withheld from your paychecks, you'll likely get that money back if your income was only $3,200 for the year. The good news is that most tax software will let you file both federal and state returns, and will walk you through the process for both. Many of them offer free filing for simple tax situations like yours.

This is actually not correct information. The wage and income transcript for 2024 is generally available by May-June of 2025. So it would be available before the October extension deadline if the OP needs to file an extension.

This is really helpful! So there's a regular Child Tax Credit AND an Additional Child Tax Credit? My disability is SSDI if that matters. Would I still file a tax return even though my SSDI isn't taxable based on my total income amount?

Yes, there are two parts to the credit. The regular Child Tax Credit is non-refundable (only helps if you owe taxes), while the Additional Child Tax Credit is refundable (you can get it even without owing taxes). You should absolutely file a tax return even if your SSDI isn't taxable! That's the only way to claim the refundable credits you're eligible for. Many people on disability don't file because they don't have taxable income, and they miss out on these refundable credits. For 2022, you could get up to $1,500 per qualifying child through the ACTC.

For 2023, the rules are similar to 2022. The expanded 2021 version (which was fully refundable) has expired. You'll still be able to claim up to $1,500 per qualifying child as a refundable credit through the ACTC, even with only disability income. The total Child Tax Credit remains $2,000 per qualifying child for 2023, with up to $1,500 being refundable through the ACTC.

Did they ever come to your house or anything? That's what I'm worried about. Also did it affect your credit score?

They never came to my house - that's pretty rare unless you're being investigated for tax fraud involving large amounts of money or criminal activity. The IRS generally handles everything through mail notices and phone calls before taking more serious collection actions. It absolutely destroyed my credit score for years. The tax liens showed up on my credit report and dropped my score by over 100 points. This affected my ability to get apartments, car loans, and credit cards. Even after I paid everything off, the damage lingered for a while. The credit reporting rules have changed somewhat since then, but tax problems can still indirectly affect your credit when they impact your financial situation.

Wait so if I file for an extension I still need to pay what I think I might owe? How do I even calculate that without my W-2??

Yes, you're expected to make a good-faith estimate of what you might owe and pay that amount when you file the extension. Without your W-2, you can estimate based on your final paystub of the year, which usually has year-to-date information. Most paystubs show how much federal tax was withheld throughout the year. If you don't have your last paystub, you could also estimate based on last year's return if your income situation was similar, or check your bank deposits to calculate approximately what you earned and estimate taxes from there. Even if your estimate isn't perfect, showing that you made a reasonable effort to comply will usually help reduce penalties.

Thanks for bringing this up - I had no idea about the tax lien or the 5-year compliance period. Does the lien stay on your credit report even after the OIC is accepted and paid? And what exactly constitutes "compliance" for those 5 years? Just filing on time or are there other requirements?

The lien is typically released about 30 days after you complete your OIC payment. However, it will remain on your credit report for several years even after it's released, though the impact lessens over time. Some lenders may be understanding once you explain it's been satisfied through an OIC. Compliance means filing all required tax returns on time and paying all required taxes when due for 5 years. This includes making estimated tax payments if you're self-employed. If you can't pay in full, you need to immediately set up an approved payment arrangement. Even one late filing or missed payment could potentially void your entire OIC agreement and reinstate the original debt plus additional interest.

Did you use a tax professional or DIY the whole OIC process? I've gotten quotes ranging from $2500-4000 just for the professional help with the OIC paperwork.

That's really helpful, thanks! Did changing your partnership agreement have any other tax implications we should be aware of? Also, did you have to make this change before the tax year began, or could you implement this partway through the year?

Changing the agreement did increase our self-employment taxes slightly since guaranteed payments are subject to SE tax. However, the health insurance deduction more than offset this increase for most partners. You can implement this change partway through a tax year. We made the change in August and just documented that going forward, the premium reimbursements would be treated as guaranteed payments. Your partnership will need to keep detailed records of the reimbursements and make sure they're properly reflected on your K-1s. The mid-year change is fine as long as you clearly document when the policy changed and handle the accounting consistently after that date.

Good point! In New York we have the same issue - different rules for state vs federal treatment of health insurance premiums. Always check both sets of regulations or use tax software that handles state-specific rules.