Do you use a tax professional to help with the estimate or do you just figure it out yourself? I'm worried about getting the estimate wrong.

I work with my accountant to make the estimate, but you could definitely do it yourself if you understand your tax situation well. The safest approach is to slightly overestimate what you'll owe. If you end up overpaying, you'll just get that money back as a refund when you file your actual return. For a DIY approach, you can use your previous year's tax return as a starting point and adjust for any major changes in income or deductions. The IRS mainly wants to see that you're making a good faith effort to pay what you reasonably believe you'll owe.

True. I owed about $35k two years ago and couldn't pay it all at once. Set up an installment plan and the process was surprisingly easy. Just had to fill out Form 9465 and was approved pretty quickly.

Does selecting the wrong option cause interest to keep accruing in the meantime? I'm already paying a pretty big amount for my amended return from 2020 and don't want to get hit with even more interest and penalties.

Yes, unfortunately. Since the payment wasn't properly applied right away, the IRS system didn't recognize that I had paid, so interest continued to accrue for about 2 months until they sorted it out. I did eventually get them to remove the additional interest charges since I could prove I made the payment on time, but it took multiple phone calls and a formal request. The whole hassle could have been avoided if I had just selected the correct form type during the payment process.

It really depends on your credit card rewards. The fee is usually around 1.96-2.20% depending on which service you use. So on $1,300, you're looking at roughly $25-29 in fees. If your card gives you 2% cash back, you're basically breaking even. If you get more (like with travel rewards cards), you might come out ahead. For me, the bigger value was being able to delay the actual payment until my credit card bill was due, giving me another 3-4 weeks to come up with the money. That flexibility was worth the small fee.

Smart approach! Do you ever worry about missing economic nexus triggers in those manually-tracked states though? Some states have really low thresholds now.

That's actually a valid concern. We do a quarterly check against all state thresholds as part of our process. We track transaction counts and revenue by state in our ERP system, so I've built a simple dashboard that flags when we're approaching a threshold. The states with the lowest thresholds (like $100K in sales or 200 transactions) are the ones we put on Avalara immediately just to be safe. The manual states are typically those with higher thresholds or where we have just a handful of customers.

The free resources are ok for basic rate lookup but they don't address the local jurisdictions or special district taxes. And they definitely don't help with filing or tracking deadlines. Maybe check out TaxJar's free trial? They have a basic tier that's not too expensive.

Yes! The income phase-out range for Roth IRA contributions is increasing for 2024. For single filers, the phase-out range is $146,000 to $161,000 (up from $138,000-$153,000 in 2023). For married filing jointly, it's $230,000-$240,000 (up from $218,000-$228,000). So if you were just above the limit last year, you might be eligible for at least partial Roth contributions in 2024!

That's awesome news! I was just barely phased out last year with an income of $154k, so it sounds like I can make at least partial direct Roth contributions this year. Thanks for the info!

Yes, the $23,000 contribution limit for 2024 applies to 403(b) plans as well! The elective deferral limits are the same for 401(k)s, 403(b)s, most 457 plans, and the federal government's Thrift Savings Plan. The $7,500 catch-up contribution for those 50+ also applies to your 403(b). Additionally, 403(b) plans sometimes have a special catch-up provision for employees with 15+ years of service at the same eligible employer, which can allow for additional contributions beyond the standard limits.

Thanks for mentioning student loan interest! We both finished paying ours off last year, so we might be able to deduct the interest from those final payments. Is that something we report on a different form than the itemized deductions?

Student loan interest is reported on Schedule 1 as an adjustment to income (sometimes called an "above-the-line deduction"), which means you can claim it even if you take the standard deduction. It's not part of your itemized deductions at all. You should receive Form 1098-E from your loan servicer showing how much interest you paid. The deduction starts phasing out at higher income levels though, so depending on your combined income, you might get a partial deduction or none at all.

This is bad advice. The OP already said their mortgage interest alone exceeds the standard deduction. Plus, if you're close to the line, itemizing state taxes and charitable giving can easily push you over. Missing legitimate deductions is literally giving away your money.