My neighbor is a retired IRS agent and she told me that estimated tax penalties are calculated per QUARTER, not just annually. So if you made one big payment at the end, you could still get hit with penalties for the earlier quarters. There's a special test called the "safe harbor" provision. If you paid either 90% of this year's tax or 100% of last year's tax (110% if your AGI was over $150k) through timely estimated payments, you won't get penalties. Maybe check if you met one of these tests?

This same thing happened to me! Check if your state has residency requirements for tax purposes. I moved mid-year and had to pay estimated taxes to TWO states because of their different rules. The CP30 was because the IRS thought I underpaid federally, but it was actually because I was paying to multiple state tax authorities and messed up the allocation. Call the IRS (good luck lol) and explain. They removed my penalty after I explained and sent proof of my state tax payments showing i was actually in compliance with the quarterly requirements when you look at the whole picture.

One important tip: when you request the First Time Abatement, be very specific about which penalty you want abated. The IRS might have charged both a late filing penalty AND a late payment penalty. Make sure your request addresses all penalties you were charged. Also, keep records of everything! Document when you called, who you spoke with, and what was said. If you send a letter, use certified mail so you have proof of delivery.

Has anyone used the IRS online account portal to request penalty abatement? I've heard mixed things about whether this is possible or if phone/mail are the only options.

I'd strongly consider hiring a professional. I tried doing an OIC myself and got rejected twice before hiring someone. The paperwork seems straightforward but there are a lot of hidden gotchas. For instance, did you know they look at your potential future income, not just current? Or that they'll check if you've transferred any assets in the last 6 years? Or that certain expenses that seem reasonable to us aren't allowed by their standards?

One thing nobody has mentioned - make sure your current tax filings are 100% in order before applying for an OIC! I submitted an offer and it got instantly rejected because I missed an estimated tax payment for the current year. The IRS won't even consider your offer unless you're current on all filing and payment requirements for the current year. This includes estimated tax payments if you're still self-employed.

Something people often miss with RSUs is that your broker might not always have the correct cost basis information, especially if you've changed employers or if the company has gone through a merger. Always double-check! In my case, after changing jobs, my old RSUs showed up in my new brokerage account with a cost basis of $0, which would have meant paying taxes on the ENTIRE amount when selling. Had to manually adjust the cost basis using my old vesting statements. Took hours but saved me thousands in incorrectly calculated taxes.

One big gotcha with RSUs that nobody mentioned: watch out for supplemental wage withholding! When RSUs vest, companies typically only withhold at the supplemental rate of 22% (or 37% for amounts over $1 million). If you're in a higher tax bracket, this creates a HUGE tax bill surprise at filing time. I learned this the hard way when I had to come up with an extra $9,600 at tax time because my company only withheld 22% but I was in the 35% bracket. Now I set aside an additional 13% of each RSU vesting value in a separate savings account specifically for tax time. Painful lesson!

4 I filed 1099-NECs late twice over the years. First time was about 2 weeks late for 3 contractors and never got any penalty. Second time was almost 2 months late for 5 contractors and got hit with a $250 penalty. Based on my experience and talking with other small business owners, they seem to be more lenient if: 1) You're only a little late (under 30 days) 2) You have just a few forms 3) It's your first late filing Since you're only a week late with just two forms, I'd be surprised if they penalize you. But no guarantees - the IRS can be inconsistent.

22 For next year, set a reminder in your phone RIGHT NOW for January 10th. That way you'll have plenty of time to get the forms ready. Also, most payroll or accounting software can generate and file these automatically if you've been tracking payments correctly throughout the year. I use QuickBooks and it basically does everything for me - just have to review and approve.