That's really important to know - I hadn't considered the long-term compliance requirements. If the OIC is accepted, I'll definitely need to set up a system to help him stay on track with quarterly payments. Maybe setting up automatic transfers to a tax savings account? Would monthly estimated payments be allowed instead of quarterly to make it more manageable?

Monthly payments towards quarterly tax obligations are definitely doable and often more manageable for people with executive functioning challenges. I recommend setting up an automatic transfer to a separate "tax account" on a monthly basis. The IRS just wants their quarterly payments received on time - they don't care how you save for them. Another approach that helps many of my clients is having a tax professional set up automatic reminders and check-ins. The most important thing is creating a system that doesn't rely on memory or executive function. Payment plans with automatic drafts can also be very helpful if needed in the future.

This is a great point. When I submitted my OIC, the IRS initially rejected it because they calculated "imputed income" for my housing situation since I was staying with family. I had to resubmit with documentation showing the arrangement was temporary due to financial hardship.

Thank you for pointing this out! He actually does help care for our parents occasionally, so I'll make sure to document that as part of the living arrangement. He doesn't currently receive any assistance programs but may qualify for some based on income. Would applying for those programs before submitting the OIC be beneficial? Or would that potentially complicate matters?

Does this work for accounts that hold REITs? Those distributions are especially complicated with return of capital, etc. I'm struggling with exactly this issue right now for an estate I'm administering.

Yes, it actually works quite well for REITs, which are one of the most complicated assets for estate fiscal year accounting. The brokerage's tax center will typically show the breakdown of REIT distributions into ordinary income, qualified dividends, capital gain distributions, and return of capital. For the fiscal portion where you don't yet have the official breakdown, many brokerages will let you see the preliminary classification based on what the REIT has announced. REITs are required to announce their dividend tax classifications, even though the official 1099 comes later. If you can't find this in your brokerage's system, you can often go directly to the investor relations section of the REIT's website and find their dividend tax classification announcements.

Is that really true? I thought you always use the form for the year in which the fiscal year ends. So for a Aug 2022-July 2023 fiscal year, wouldn't you use the 2023 forms since that's when the fiscal year ends?

How do you know if your plan allows this? Is it something I need to ask HR about specifically? I've never seen "after-tax contributions" as an option in either of my employer's benefit portals.

You need to ask your HR department or plan administrator specifically about "after-tax contributions" (not Roth contributions, which are different). Many employers don't advertise this feature even when they have it. You'll also want to ask if they allow in-plan Roth conversions or in-service withdrawals of these after-tax contributions. Not all 401k plans offer this option - it's more common with larger employers. If either of your plans does allow it, it's a powerful way to get more money into tax-advantaged accounts beyond the standard limits.

Is there an easy way to track this? My contributions are percentage-based, not dollar-based, so it's hard to calculate the exact amount going in each month, especially with bonuses.

Do you have a source for that $5-6 return on investment figure? I'm not doubting you, just would like to read more about it since that's a compelling argument against budget cuts.

The Treasury Department's own analysis from 2021 estimated that every additional dollar invested in tax enforcement yields at least $5 in revenue. More recent studies suggest the return could be even higher for certain enforcement activities targeting high-income individuals and large corporations. For comparison, the Congressional Budget Office (CBO) has historically used more conservative estimates of a 3:1 to 5:1 return ratio, but even at the low end, that's still a 300% return on investment. There's a good article in the Journal of Tax Policy from last quarter that breaks down different enforcement activities and their respective ROIs. The highest returns come from audits of high-income individuals with business income and large corporations with international operations.

It's political theater. Politicians know attacking the IRS plays well with their base, regardless of the practical impacts. There's decades of anti-government rhetoric that's made "IRS" a four-letter word to many voters. Plus, powerful donors benefit from a weakened tax enforcement system.

I hadn't even thought about state-specific credits! Do you know where I should look to find out if my state has different age requirements for their version of the EITC?

Check your state's department of revenue or taxation website - they usually have a dedicated page for state tax credits. Just google "[your state] earned income tax credit" and it should come up. You can also look at your state tax form instructions which typically list all available credits. About half of US states offer their own EITC, and the rules do vary. Some states make it a percentage of the federal credit, but others have their own qualifications. Worth checking because even if you don't qualify for the federal one, you might get some benefit from your state!

That's only partially right. You also qualify for EITC under 25 if you're a specified student who was in foster care or experienced homelessness. Just adding that detail in case it applies to OP or anyone else reading.