Do you know if there's any difference in processing time between major banks and smaller credit unions? Mine sometimes takes longer for ACH transfers.

Yes, there can definitely be differences. Larger banks typically process ACH transfers (which is what IRS payments are) more quickly - usually within 24 hours of receiving them. Smaller credit unions sometimes batch their ACH processing and might only run them once per day, which can add a delay of up to 24 hours. If you're with a smaller credit union, I'd add an extra day to the expected processing time just to be safe. So if the IRS schedules the withdrawal for the 15th, it might not actually hit your account until the 17th or 18th at a smaller institution.

If your payment bounces, the IRS will send you a notice and charge you a penalty - usually about 2% of the payment amount. They'll also charge interest on the unpaid amount until you pay it. Plus your bank will probably charge you an NSF fee too.

Thanks for bringing this up! I just checked my 1099-G and see they only withheld about 10% for federal taxes. Is that going to be enough or should I be preparing to pay more when I file?

The 10% withholding might be enough, but it depends on your total income for the year and tax bracket. Unemployment benefits are taxed at your normal income tax rate, not a flat 10%. If unemployment was your only income for the year, 10% might cover it for federal taxes. But if you had other income sources or worked part of the year, you might owe additional taxes. A good tax program will calculate this for you when you enter all your information. Just be prepared for the possibility of owing some money, and don't be caught off guard. This is one advantage of filing sooner rather than later – if you do owe, you'll have more time to plan for payment before the filing deadline.

I used Credit Karma Tax last year with a 1099-G and claiming a missed stimulus. It was actually completely free, no hidden fees even with the Recovery Rebate Credit. The interface was pretty easy to use, though not as polished as TurboTax. Just make sure you have all your documents ready before you start!

What about leasing? I heard there's some loophole where if you lease an EV instead of buying, the MAGI limits don't apply to the customer because the credit goes to the leasing company? Is that true?

Yes, that's correct about leasing. When you lease an EV, the leasing company (usually the manufacturer's financing arm) is technically the owner of the vehicle, so they receive the tax credit directly. They often pass this benefit on to the customer in the form of reduced lease payments or a capital cost reduction. In these cases, the MAGI limits don't apply to you as the lessee because you're not claiming the credit directly. This has indeed become a popular workaround for higher-income customers who wouldn't qualify for the credit if they purchased. Just make sure the leasing company is actually passing along the credit value to you in the lease terms.

The MAGI (Modified Adjusted Gross Income) limit for single filers to get the full EV credit is $150,000. At $145k you should be eligible for the full credit IF your car meets all the other requirements (battery components, minerals, etc.). The "prior year" option means when you file your 2023 return in 2024, you can use either your 2023 MAGI or your 2022 MAGI, whichever is lower. So if your income was lower last year, you could use that instead.

That's concerning. What specific documentation did they request in the audit? Was it focused more on proving eligibility (the revenue decline) or on the wage calculations?

They wanted both types of documentation. For the eligibility part, they requested quarterly profit and loss statements for both 2019 and 2020 to verify our claimed revenue decline. They also asked for bank statements showing deposits that would substantiate our gross receipts. For the wage calculations, it was much more detailed. They requested payroll registers for all quarters claimed, documentation showing which employees' wages were claimed, evidence of how PPP funds were allocated to specific payroll periods, and health insurance allocation methodology. They even asked for copies of our PPP loan applications and forgiveness documentation to cross-reference. The most time-consuming part was providing a spreadsheet reconciling the qualified wages on our 941-X with our actual payroll records. I recommend creating and saving this type of reconciliation when you do your initial filing - recreating it a year later was a nightmare.

I submitted in January 2023 and just got my refund last month, so about 7 months. But I've heard some people waiting over a year now. The IRS is overwhelmed with these claims and there's been increased scrutiny because of all the fraudulent claims submitted by sketchy ERC mills.

How did you find your CPA? Did you just google or get a referral? I'm worried about ending up with someone who doesn't know what they're doing.

I got a referral from another small business owner friend - definitely the way to go if possible! Ask around to people in similar situations as yours. If that's not an option, check reviews but specifically look at responses from people with tax situations similar to yours. A good interview question is asking potential CPAs about their experience with your specific situation (side business, interstate move, etc). If they start immediately mentioning specific deductions or considerations for your situation without prompting, that's usually a good sign they know their stuff!

That's a really good point about the time aspect. I spent like 6 hours just trying to figure out how to categorize my side business expenses last year with the software, and that was before all these new complications. Maybe paying someone is worth it just for the stress reduction alone!