Are CPAs really worth the cost for someone who's just starting out? My business only made about $27,000 last year total, and I'm trying to save where I can.

For someone making $27,000, it could still be worth it for your first year. A good CPA will not only file correctly but teach you things about business deductions you might miss. For example, mine showed me how to deduct a portion of my rent as a home office, track mileage, and properly deduct phone/internet expenses. The peace of mind alone can be worth it, plus they might find enough deductions to pay for their fee. That said, if money is really tight, something like FreeTaxUSA is quite good for self-employment income and costs much less than TurboTax while offering similar guidance.

This is exactly right. I switched from TurboTax to FreeTaxUSA last year and saved almost $100. The interface isn't as pretty but it does the exact same thing and asks all the same questions about business income.

Do you know if there's any disadvantage to using Direct Pay instead of payusatax? Is one better for record-keeping or anything?

Direct Pay gives you a confirmation number and email receipt just like payusatax does, so the record-keeping is pretty much the same. The main difference is that Direct Pay is completely free while payusatax charges a processing fee. The one downside to Direct Pay is that you can't use a credit card - it has to come directly from your bank account. So if you're trying to get credit card points, you'd need to use payusatax or one of the other third-party processors that accept cards (though they charge an even higher fee for credit card transactions).

The IRS counts the payment date as the day you submit it, not when they process it. So as long as you select "2021" and "1040-ES" when making the payment, you'll be fine. I made this mistake last year - selected the wrong tax year and had to spend hours sorting it out. Double check the tax year selection before submitting!

Thanks for clarifying! That's a relief to know it's based on submission date. I'll definitely double-check the year selection when I submit.

This is what worries me! Did you have any issues with them properly applying your payment when you made it before they processed your return? And how did you figure out the exact amount with penalties?

No issues with them applying the payment - I paid through the IRS Direct Pay system and selected the correct tax year and form type. The payment posted correctly once they processed my return. As for calculating the exact amount with penalties, that was the tricky part. I didn't know how to do that accurately, which is why I ended up with a small balance due notice later. If I could do it again, I would either pay a bit more than I thought I owed to be safe or use one of the services others have mentioned to get a more precise calculation.

Try early morning (like 6-7am) or late evening. Their site gets overloaded during peak hours. Also clear your cookies or try a different browser. Their site is notoriously bad with certain browser versions.

Thanks for the tip! I'll try early tomorrow morning. Been trying in the afternoon and it's been completely useless. Their tech is so outdated it's ridiculous.

Thanks for this perspective! How do you handle documentation for things like the business-use percentage for your laptop or phone? Do you keep a log of some kind or just estimate based on your typical usage?

I don't keep a daily log because that would be too cumbersome, but I do periodic sampling. Every quarter, I'll track my usage carefully for about a week, noting business vs. personal time. I document this in a simple spreadsheet showing dates, hours used, and business purpose. For my phone, I use my phone bill to identify business calls and texts versus personal ones during those sample periods. For my laptop, I use a time-tracking app that shows which programs and websites I'm using throughout the day, which helps distinguish between business and personal activities. This periodic sampling gives me a reasonable basis for my percentage rather than just pulling a number out of thin air.

I went through a correspondence audit two years ago. They focused heavily on my home office deduction and business travel. They wanted floor plans showing the dedicated office space, photos of the setup, and utility bills to verify the expenses. For travel, they wanted receipts, calendar invites proving business purpose, and mileage logs. The process took about 4 months from start to finish. In my case, I had good documentation for most things, but I did have to pay back some deductions for a conference where I extended the trip for personal reasons but claimed the full airfare. The lesson I learned was that partial-use situations are where they tend to dig in the most.

Wait seriously? I didn't know about that delay for EITC. Is there any way around it if I really need my refund ASAP?

Unfortunately there's no way around the EITC/ACTC delay - it's mandated by law through the PATH Act to allow the IRS time to verify claims and reduce fraudulent refunds. Even if you file on the first possible day, the IRS is prohibited from issuing refunds containing those credits before mid-February. If you really need funds quickly, you might consider adjusting your W-4 with your employer now to reduce withholding for the rest of the year, which would give you more money in your paychecks immediately rather than waiting for a tax refund. Just be careful not to underwithhold and end up owing when you file.

Which tax software do you think is best for early filing? I've used H&R Block online in the past but I'm open to trying something different if it'll get my refund faster.