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17 Have you considered using a tax preparation service like H&R Block or Jackson Hewitt? They're typically less expensive than independent CPAs and often have small business specialists. They also offer year-round support, not just during tax season. I used H&R Block's small business services when I started my etsy shop last year and paid around $350 total for the year, including quarterly estimates and my annual return. Much more affordable than the quotes I got from private CPAs.
1 I was thinking about that! Did they help with identifying deductions throughout the year or was it more just for the filing part? And did you work with the same person each time or get random preparers?
17 They absolutely helped with deductions throughout the year. I had an initial consultation where they set me up with a tracking system for business expenses and explained what to save receipts for. You can request the same preparer each time, which I definitely recommend. I worked with the same woman for all my quarterly stuff and my annual return, which was great because she remembered my business details and could spot trends in my expenses. Just make sure to ask for their small business specialist specifically - the regular preparers might not have the same level of expertise with self-employment taxes.
3 I recently found out that some professional organizations and chambers of commerce offer discounted tax services for members. I joined my local chamber for $175/year and got access to a CPA who charges members 30% less than his regular rate. Might be worth checking if your industry has a professional association with similar benefits.
13 That's actually brilliant. Do they offer other business services too? Might be worth joining for multiple benefits.
Carryback claims are actually a good thing usually! The IRS is probably giving you money back from your 2020 taxes because of pandemic relief provisions. During COVID they changed a bunch of rules retroactively and they're STILL processing all those changes. The delay is totally normal - the IRS has been massively backed up since COVID. My mom just got a similar notice last month about her 2019 taxes and ended up getting an extra $1200 refund she never expected.
Thank you all for the explanations! I called the number on the notice today (took forever to get through) and you were right - it was actually GOOD news. They found I was eligible for some additional pandemic relief I didn't claim and they're sending me $790! Apparently there was some provision about carrying losses back that I qualified for but didn't know about. The agent explained that they're still processing these adjustments from the CARES Act and I just happened to be in this batch. I was so worried they were coming after me for something, but it was actually them giving me money back. What a relief!
That's great news! The IRS isn't always the bad guy (though their communication could definitely use some work). Glad it worked out in your favor!
Check if it's a legitimate notice first - lots of IRS scams going around. Real IRS notices have a notice number (usually CP followed by numbers) in the top right corner and will NEVER ask for gift cards, cryptocurrency or personal info over the phone.
For your situation, I'd recommend using the 100% prior year tax liability safe harbor. Since you only owed $1,400 for 2023, you could simply divide that by 4 and pay $350 per quarter for 2024. That would guarantee no penalties even if your income jumps to $40k. If you want to be more precise, estimate your 2024 tax liability (including self-employment tax which is about 15.3% of your net profit) and divide by 4. Remember that quarterly due dates are April 15, June 15, September 15, and January 15 (2025). You can pay online through the IRS Direct Pay system which is free and pretty straightforward.
Isn't the June payment actually due on June 17th this year? I thought I saw something about that online. And do I calculate the self-employment tax separately or is there a combined form or calculator?
You're right about the June deadline this year - it's June 17, 2024 (the 15th falls on a weekend). Good catch! For calculating your payments, the self-employment tax is actually part of the total tax calculation on the 1040-ES worksheet. You don't need to calculate it separately for your quarterly payments. The worksheet walks you through calculating both your income tax and self-employment tax, then combines them to determine your total estimated tax payments. This ensures you're covering both your income tax and SE tax obligations with your quarterly payments.
Quick tip that saved me a ton of stress: set up an IRS online account if you haven't already. It lets you see your payment history, make payments, and set up payment plans. Makes the whole quarterly tax thing so much easier to manage. I had the same issue last year - started contracting midyear and was confused about quarterly requirements. I just divided my expected annual tax by 4 and paid each quarter. As long as you're making a good faith effort, the IRS is fairly reasonable.
One thing nobody's mentioned yet - if you file as Injured Spouse, it can take longer to get your refund. When I filed Injured Spouse last year because my husband had defaulted student loans, our refund took about 11 weeks instead of the usual 3 weeks. Just something to keep in mind if you're counting on getting that money quickly.
Do you know if you can e-file with the injured spouse form or do you have to mail it in? I've heard both things from different people.
You can definitely e-file with Form 8379 (Injured Spouse) included! Most tax software supports this now. I've done it through TurboTax and H&R Block in different years. If you file the injured spouse form with your original tax return, it processes much faster than if you submit it separately after filing. That's probably why you've heard conflicting information - submitting it separately after filing often requires mailing it in and takes much longer.
Something else to consider - if your wife truly has zero income, filing jointly with the injured spouse form is almost always better than filing separately. When my wife wasn't working last year, I ran the numbers both ways and filing separately would have cost us about $4,200 more in taxes!
Eli Wang
You should pull your tax transcripts ASAP. That will show the actual assessment date and collection statute expiration date (CSED). You can get them online at IRS.gov if you create an account, or use Form 4506-T if you can't create an online account. Look for "collection statute date" or something similar on the transcript. The transcript will also show if the debt was ever paid, discharged, or is still active. The IRS data system is pretty good about tracking these dates accurately, including adjustments for bankruptcy.
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Olivia Evans
ā¢I tried logging into the IRS website but I'm locked out because I don't have the right documents they need to verify my identity. Is there any other way to get transcripts without waiting for the mail?
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Eli Wang
ā¢If you're having trouble with the online account, you can also call the IRS transcript request line at 800-908-9946 to have them mailed, which is faster than using Form 4506-T. They typically arrive within 5-10 business days. Another option is to make an appointment at your local Taxpayer Assistance Center where they can print your transcripts on the spot. You'll need to bring ID, but it's a way to get them immediately without dealing with the online verification issues.
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Cassandra Moon
My dad had a similar situation with a 2008 tax bill that resurfaced in 2021. What we discovered is that the IRS had made an additional assessment in 2014 (some adjustment to his return), which reset the 10-year clock! So even though the original assessment was old, this new assessment gave them more time. Check your transcripts carefully for any subsequent assessments that might have extended the timeframe.
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Zane Hernandez
ā¢That's a really important point! Any adjustments or additional assessments can start a new collection statute for those specific amounts. I've seen people get surprised by this too.
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Cassandra Moon
ā¢Yeah it was a complete shock to us! The IRS had disallowed a deduction years after the return was filed and assessed additional tax. Even though it was a small amount (like $840), it created a new 10-year collection period for that portion. And they were definitely still trying to collect it.
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