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Whatever payment method you choose, MAKE SURE to save confirmation of your payment! Take screenshots, save/print receipts, and write down any confirmation numbers. I paid a penalty online last year and the IRS somehow lost track of it, then sent me another notice with additional interest. Had to send them my confirmation details to get it straightened out.
Omg this happened to me too! I paid online and they claimed they never received it. Took 3 months to resolve because I couldn't find my confirmation number. Nightmare.
Thanks everyone for all the helpful advice! I just successfully paid my penalty using IRS Direct Pay and it was actually pretty straightforward once I knew what to look for. For anyone else in a similar situation, here's exactly what I did: 1. Went to IRS.gov and clicked on "Make a Payment" 2. Selected "Direct Pay" (the free option) 3. Chose "Notice" as my reason for payment 4. Selected "Other" for notice type since my penalty notice didn't have a specific CP number 5. Entered my SSN, tax year (2023), and the reference number from my penalty notice 6. Connected my bank account and submitted the $470 payment The whole process took about 8 minutes and I got immediate confirmation with a receipt number. I also took screenshots of everything like @Reginald Blackwell suggested - definitely good advice given some of the horror stories here! Really appreciate everyone sharing their experiences. This community is so helpful for navigating these confusing IRS situations.
@StarSailor So glad you got it sorted out! Your step-by-step breakdown is really helpful for anyone else who might be dealing with this. I'm dealing with a similar penalty situation right now and was getting overwhelmed by all the different payment options. Your walkthrough makes it seem much less intimidating. Quick question - did you get any email confirmation after the payment went through, or just the on-screen receipt? I want to make sure I don't miss any follow-up documentation when I do mine.
22 Does anyone know if selling a single-member LLC has different tax implications than selling a partnership or corporation? I'm selling my website development business and trying to figure out if I need different forms than what people here are mentioning.
12 Yes, there's a big difference! With a single-member LLC (disregarded entity), you're essentially reporting the sale on your personal return using Schedule D and Form 4797. There's no separate business return involved. For partnerships (or multi-member LLCs), the partnership itself files Form 1065 reporting the sale, and then partners receive K-1s showing their share of the gain/loss. For corporations, the tax treatment depends on whether it's an S-Corp or C-Corp, with completely different forms and potentially different tax rates. C-Corp sales can result in double taxation unless structured carefully. The most common mistake I see is people not properly allocating the purchase price across different assets in the sale. Each category (inventory, equipment, real property, goodwill, etc.) may have different tax treatments.
I went through something similar when I sold my marketing consultancy last year. TurboTax Home & Business can definitely handle single-member LLC sales, but there are a few things to watch out for. The key is getting the asset allocation right in your purchase agreement. Since you mentioned it was mostly goodwill and client list, make sure those are clearly separated in your documentation. TurboTax will ask you to break down the sale price by asset type - goodwill typically gets capital gains treatment (which is better), while things like non-compete agreements are taxed as ordinary income. One thing that tripped me up was depreciation recapture. If you claimed any business equipment depreciation over the years (computers, office furniture, etc.), you might need to "recapture" some of that as ordinary income even if the actual sale amount for those items was minimal. My advice: start with TurboTax since your sale sounds straightforward, but don't hesitate to consult a CPA if you run into any confusing allocation questions. The software will guide you through Forms 4797 and Schedule D, but having your purchase agreement handy with clear asset breakdowns will make the process much smoother.
I had this exact same issue last year! The Wage and Income transcript is definitely the way to go - it shows everything the IRS has on file including all the EINs of companies that withheld taxes from you. One thing to watch out for though is that sometimes employers file corrections after your W-2 is issued, so what's on the transcript might be different (and more accurate) than what's on your actual W-2. Also make sure you're looking at the right tax year - I accidentally pulled 2022 data when I needed 2023 and was confused for way longer than I should have been! The transcript will show you exactly who submitted what withholding info under your SSN.
This is super helpful, especially the point about employers filing corrections! I didn't know that could happen after W-2s are issued. That might explain why my numbers don't match up. I'll definitely double-check I'm looking at 2024 data when I pull the transcript. Thanks for sharing your experience!
Just went through this same headache a few weeks ago! The Wage and Income transcript from your IRS online account is exactly what you need. It shows every single entity that reported withholdings under your SSN, complete with their EIN numbers so you can identify exactly who they are. What really helped me was printing it out and comparing it line by line with my actual W-2s and 1099s - turned out one of my employers had filed a corrected W-2 that I never received, which explained the discrepancy. The transcript will show you the most current/accurate information the IRS has on file, even if it differs from the original documents you received. Good luck getting it sorted!
Former tax preparer here. One thing to note about those section 199a dividends from REITs - they do need to be reported but they actually might benefit you! They potentially qualify for the 20% pass-through deduction depending on your overall income level. Don't miss out on that potential tax break by skipping reporting them.
Does that 20% deduction apply even if your total dividend income is super low like the OP? I thought there were income thresholds for the 199a stuff.
The QBI deduction (the 20% deduction from Section 199a) actually doesn't have a lower threshold - it has upper income limits that phase out the deduction for high earners. For someone with modest dividend income, they would likely qualify for the full deduction on their REIT Section 199a dividends. There's no minimum amount required to claim the deduction, so even on $42 of Section 199a dividends, you could potentially get a deduction of about $8.40 (20% of the amount). Every bit helps when it comes to reducing your tax bill!
Look, let's be real - the IRS probably doesn't care about your $385 in dividends. I've never reported amounts under $500 and never had an issue. They're focused on bigger fish.
Maybe I've just been lucky then! But seriously, I've had small amounts from random stocks for years and never included them. Haven't heard a peep from the IRS.
@Oliver Becker I have to respectfully disagree with your approach. While you may have been lucky so far, the IRS s'automated document matching program called (the Automated Underreporter or AUR is) getting more sophisticated every year. Even if they don t'catch it immediately, they can send you a CP2000 notice years later asking about the discrepancy. The thing is, reporting these dividends properly might actually save you money! As @Paolo Longo mentioned, those section 199a REIT dividends could qualify for the 20% QBI deduction. Plus, if some of your dividends are qualified dividends, they re taxed'at lower capital gains rates rather than ordinary income rates. It s really'not worth the risk of penalties and interest for such a small amount of extra work. Most tax software makes it pretty straightforward to enter this information from your 1099-DIV.
Kirsuktow DarkBlade
This is such a valuable discussion! I'm in a similar situation - starting my first professional job in July after graduating. Reading through everyone's experiences has really opened my eyes to how much I could potentially save by adjusting my withholding. One thing I'm curious about that I haven't seen mentioned - does the timing of when you start during the year affect this significantly? Like, would starting in July vs August vs October make a big difference in terms of over-withholding? I'm wondering if there's a "sweet spot" where the hassle of adjusting your W-4 becomes really worth it. Also, for those who used the various tools mentioned (IRS withholding estimator, taxr.ai, etc.), did you find one significantly better than others? I'm a bit overwhelmed by all the options but want to make sure I'm using the most accurate one. Thanks to everyone for sharing such detailed experiences - this thread is going to save me (and probably a lot of other new grads) from making expensive mistakes with our first paychecks!
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Ethan Wilson
ā¢Great question about timing! The earlier in the year you start, the bigger the potential over-withholding issue becomes. Starting in July like you're planning means you'll work about 6 months, so you'd have taxes withheld as if you're making $85k but only actually earn about $42-43k. That's a pretty significant difference that could result in substantial over-withholding. Starting in October (like some others mentioned) means only 3 months of work and even more dramatic over-withholding, while starting in July is kind of in the middle. Generally, if you're starting before September, it's definitely worth adjusting your W-4 because the potential savings are substantial. As for tools, I'd recommend starting with the official IRS Tax Withholding Estimator since it's free and directly from the source. It's been updated to be much more user-friendly than it used to be. If you find it confusing or want a second opinion, then you could try the other tools people mentioned, but honestly the IRS one should handle your situation perfectly well. The key thing is just to do *something* rather than letting the default withholding run all year. Even a rough adjustment is better than no adjustment when you're starting mid-year!
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Dmitri Volkov
This has been such an educational thread! I'm in a somewhat unique situation - I'm starting my job in November, so I'll only be working about 2 months of 2025. Based on all the great advice here, it sounds like my over-withholding situation could be even more dramatic than what others have described. With only 2 months of work, I'd earn roughly $14k but have taxes withheld as if I'm making the full $85k. Combined with the standard deduction, I might barely owe any federal taxes at all! That means almost everything withheld would come back as a refund. I'm definitely going to use the IRS Tax Withholding Estimator as soon as I get my exact start date confirmed. For someone in my situation working such a short period, would it make sense to be more aggressive with the W-4 adjustments? Like, could I potentially set it up to have minimal withholding since my actual tax liability will be so low? Also, this might be a silly question, but if I adjust my W-4 for the short work period in 2025, and then need to readjust it in January 2026 for a full year, will my employer think it's weird that I'm changing my withholding so frequently? I don't want to come across as not knowing what I'm doing in my first professional job. Thanks everyone for all the insights - this thread should be required reading for anyone starting their first job mid-year!
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