Are you sure about this? I've read conflicting info online and don't want my payment to get misapplied. Would "Amount Owed on Notice" be more appropriate than "Tax Due on Return" since this is from a notice?

I've paid three different CP notices this way over the years and never had any issues. The key is making sure you enter the correct tax year and form number along with it. However, "Amount Owed on Notice" would also work fine. The most important thing is that you include your SSN, the correct tax year (2018), and the form number referenced on your notice. The payment system will attach the payment to your account regardless of which of these two options you select. The IRS cares more about identifying YOU correctly than the specific reason code you choose from their dropdown.

The IRS generally doesn't report to credit bureaus directly, but tax liens used to show up on credit reports. However, since 2018, the three major credit bureaus no longer include tax liens on credit reports as part of their National Consumer Assistance Plan. That said, you should still address it ASAP. If you can't pay in full, set up a payment plan on the IRS website under "Pay" and then "Payment Plans." This shows good faith and stops most aggressive collection actions.

Thank you for highlighting this! That $25,000 penalty sounds terrifying. Do you recommend using a registered agent service that specializes in foreign-owned LLCs? And did you find any particular state to be easier to deal with than others for the ongoing compliance?

Yes, absolutely use a registered agent that specializes in foreign-owned LLCs - they'll keep you compliant with state requirements and help ensure you don't miss filings. I personally found Wyoming to be slightly easier than Delaware for ongoing compliance as a foreign owner. Wyoming has simpler annual reports and lower fees. Most importantly, work with a US accountant who specifically handles international clients. Regular CPAs often don't understand the nuances of foreign-owned LLCs and may miss critical filings. I'd recommend setting aside at least $1,500-2,000 annually for proper tax compliance services - it's much cheaper than those penalties!

This is actually a smart structure, but be careful with substance requirements. Many offshore jurisdictions now require real economic substance (office, employees, etc.) to maintain good standing. The OECD's BEPS initiatives have made pure "paper companies" increasingly problematic.

That's a great point about owner-manager taxation! I've had limited exposure to this through some of the trust work, but haven't seen the full picture of how it integrates with corporate planning. Is there a particular industry you think would give the best exposure to these concepts during a short secondment?

Professional services firms (doctors, lawyers, dentists) typically offer the richest learning experience for owner-manager taxation because they have more flexibility in their structures than capital-intensive businesses. They often have complex structures with holding companies, family trusts, and professional corporations all working together. Real estate is another good sector if you want to see how capital gains planning works in practice. The strategies used for property developers versus long-term holders are quite different, and you'll learn a lot about timing strategies for triggering gains or losses.

Totally agree with this distinction! I'd also add that if you're someone who likes definitive answers, tax preparation might be more satisfying. Planning work involves a lot more gray areas where you're dealing with probabilities rather than certainties.

Wait, I'm confused. Are you saying the extension doesn't extend the IRA contribution deadline? Or that it does? Sorry, your wording was a bit unclear to me.

Sorry for the confusion! The extension does NOT extend the IRA contribution deadline. Even if you file an extension giving you until October to file your tax return, you still must make any IRA contributions for the previous tax year by April 15th (the original filing deadline). The filing extension only gives you more time to complete and submit your tax forms - it doesn't extend other tax deadlines like IRA contributions, estimated tax payments, etc. That's the mistake I made thinking I had until October for my IRA contribution.

You can file a federal extension for free using Form 4868 directly on the IRS website. Don't pay TurboTax for something that's free! State extensions might be different depending on where you live though.

Thank you for the encouraging words and practical tips! I do work from home so the home office deduction sounds perfect. For the mileage - does that include driving to meet clients or pick up supplies? I haven't been tracking that at all.

Yes! Mileage includes ANY driving for business purposes - client meetings, picking up supplies, going to the post office for business mail, driving to the bank to deposit business checks, etc. Basically anything except your regular commute (which you don't have if you work from home!). Start tracking immediately for 2024 - there are free apps like MileIQ that make it super easy. For 2023, you can reconstruct a reasonable estimate using your calendar, email confirmations, receipts from supply stores, etc. Just be realistic with your estimates in case of an audit.

Wait I'm confused about the math. If the standard deduction is like $20k for Head of Household, and she only made $10,500, how does she owe any taxes at all? Isn't the first $20k tax-free?