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From my experience working with tax issues, you should definitely file a complete and accurate return even if you've already paid some bills. What you received were probably automated notices based on partial information. When you file your complete return, make sure you include a statement explaining that you've already made payments in response to IRS notices. List the notice numbers, dates, and payment amounts. This helps the IRS properly credit your account. Also, keep in mind that for 2021 returns filed in 2025, you're still eligible for any refund due until April 15, 2025 (the three-year statute of limitations for refunds). So if you overpaid, you can still get that money back.
Thanks for this advice! Should I attach copies of the notices and payment confirmations to my return? And would it be better to file electronically or mail a paper return in my situation?
You don't need to attach copies of the notices to your return, but do keep them for your records. Instead, include a brief statement referencing the notice numbers and payment amounts on a separate sheet if filing by paper, or in the comments section if filing electronically. For your situation, electronic filing is generally better because it processes faster and you'll get confirmation of receipt. However, if your return is very late (which 2021 would be in 2025), some tax software may not support e-filing for prior years, so you might have to mail it. If mailing, definitely use certified mail with return receipt so you have proof of filing.
One thing nobody mentioned - if you get a refund from your 2021 return after all this, the IRS probably won't pay you interest on it since the late filing was your responsibility. But if you end up owing more, they'll definitely charge interest on the unpaid amount from the original due date. The IRS is generally reasonable about honest mistakes, but they're very strict about deadlines and required filings. I learned this the hard way when I missed filing for 2 years during a rough patch in my life.
Actually, the IRS does pay interest on refunds that are issued more than 45 days after the return is filed, even for late-filed returns. The interest rate changes quarterly. It's not a lot, but it's something. I filed my 2019 taxes super late and still got interest on my refund.
In terms of pricing, I think location matters more than you might expect. Even though you're remote, a NJ-based CPA is likely used to paying higher rates than a FL-based one might. In the Northeast, I've seen preparers with your experience level get $30-40/hour for 1040s and Schedule Cs, and maybe $40-50 once they're comfortable with S Corps. Keep in mind that as a contractor, you're responsible for your own taxes, software, training, etc. So your rate should be higher than what you'd accept as an employee. Don't sell yourself short!
Thanks for this insight! Do you think it's reasonable to negotiate a rate increase after I've completed a certain number of returns or after a specific time period?
Absolutely! That's a very common arrangement. You could propose starting at a lower rate while training (maybe $30-35/hour), then bump up to $40-45 after you've successfully completed 10-15 S Corp returns or after the first month, whichever comes first. Just make sure to get this agreement in writing before you start. Many CPAs will happily agree to this structure since they expect you'll become more valuable as you gain experience with their specific clients and processes. It also gives you a built-in opportunity to revisit compensation without having to initiate an awkward conversation later.
Has anyone discussed the software expectations? Will she provide access to the tax software or are you expected to have your own license? That could significantly impact what rate makes sense.
Be careful about filing with "estimates" as some people are suggesting. If your estimates are significantly off from what your employers reported to the IRS, you could face penalties for underreporting income. The IRS has a transcript request service online where you can request your Wage and Income Transcript which shows all W-2s and 1099s filed under your SSN: https://www.irs.gov/individuals/get-transcript If the online system doesn't work for you (it requires some specific verification), you can also file Form 4506-T to request the transcript by mail. This might take longer but gives you the exact numbers your employers reported.
Thanks for the warning. I tried the online transcript request but couldn't verify my identity because my phone isn't in my name (I'm on my parents' family plan). How long does the mail request usually take? I'm worried it won't arrive in time for my deadline.
Mail requests generally take 5-10 business days to process plus mailing time, so you're right to be concerned about meeting your deadline. Since you're in a time crunch, I would recommend using Claimyr as others have suggested to get through to an IRS agent who can provide your wage information immediately over the phone. Alternative verification methods for the online transcript system include using a credit card number (doesn't have to be in your name) or getting a one-time code mailed to your address of record, but that also takes 5-10 days. The fastest solution is definitely speaking directly with an IRS agent who can read your wage information to you from their system.
Just a quick tip from someone who works in a university financial aid office - once you file your taxes, call your school's financial aid department immediately with your confirmation number from the IRS. We can often manually override the FAFSA non-filer hold on our end once we have proof you've filed, rather than waiting for the FAFSA system to update automatically (which can take 1-2 weeks). Also ask about emergency loans or payment plan options that might be available while waiting for your FAFSA to process. Many schools have short-term emergency funds specifically for situations like this.
This is great advice! I had a similar issue and my school's financial aid office was able to give me a 30-day extension on tuition payments once I showed them proof I had filed my taxes. Saved me from having to drop my classes while waiting for the loan disbursement.
One thing nobody's mentioned - make sure to keep detailed notes about EVERYTHING related to how they controlled your work. Write down dates, times, names of supervisors, specific instructions you were given, etc. If possible, save any emails or texts with instructions. I filed an SS-8 last year for a similar situation (event staff misclassified as contractors) and the more specific examples of employer control I could provide, the stronger my case was. The IRS specifically asked for examples of how my schedule and work methods were dictated.
Thanks for this advice. I do have some text messages from the production coordinator with specific reporting instructions and break schedules. Should I include screenshots of these with my SS-8 filing? And did you end up saving much on your taxes after going through the process?
Yes, definitely include screenshots of those text messages! They're perfect evidence of the control factor. Anything showing they dictated when and how you performed the work strengthens your case dramatically. As for tax savings, it wasn't huge for me since it was just a few days of work, but I saved about 7.65% on those earnings (the employer half of FICA taxes). The bigger impact was that the company got flagged for a broader employment tax review, which potentially helps all the other misclassified workers too.
Dont bother with the SS-8 for such a small amount IMO. I filled one out 2 years ago for a $1200 job and still havent heard anything back. Complete waste of time for small amounts, the IRS is so backlogged they prob wont even look at it for years.
That hasn't been my experience at all! I filed one for a $750 job last year and got a determination in about 4 months. I think it depends on how clear-cut the situation is. My case had obvious employee factors like required uniforms, equipment provided, and scheduled hours - sounds similar to the OP's situation.
Rami Samuels
Anyone else notice how confusing the IRS makes these forms? Like why do we even need Form 8606 for Roth contribution withdrawals when they're not taxable anyway? The whole system feels designed to trip us up!
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Haley Bennett
ā¢Because the IRS doesn't know whether your distribution is contributions, conversions, or earnings without you telling them. That's what Form 8606 does - it helps you calculate and show which part of your distribution is taxable. Without it, they'd have to assume the worst (that it's all earnings).
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Douglas Foster
FYI - I accidentally left parts 1 and 2 blank on my Form 8606 last year for a similar Roth withdrawal situation, and never heard anything from the IRS. So at least anecdotally, if you're truly only withdrawing contributions, it seems to be ok. YMMV though!
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