I've been using FreeTaxUSA for my quarterly payments for about 2 years now and wanted to share my experience. The software does a great job calculating your estimated payments, but like others mentioned, you need to handle the actual payment process separately. I started with Direct Pay but switched to EFTPS after missing a payment deadline (cost me about $65 in penalties). The EFTPS registration process is a bit old-school - you do have to wait for them to mail you a PIN - but once you're set up, it's incredibly convenient to schedule all four payments at once. One tip that might help: when FreeTaxUSA calculates your quarterly amounts, print out that summary page and keep it with your tax records. I reference it throughout the year when I'm tracking my business income to make sure I'm still on track. Also, don't forget that if your income changes significantly during the year, you might need to adjust your remaining quarterly payments. EFTPS makes it easy to modify future scheduled payments if needed.

I went through this exact same situation last year when I started freelancing! Here's what worked for me: I ended up going with EFTPS after initially trying Direct Pay. Yes, the registration process feels antiquated (waiting for a PIN in the mail in 2025!), but once you're set up, it's so much better for quarterly payments. You can schedule all four payments at once and then basically forget about it. One thing that really helped me was setting up a separate savings account just for quarterly taxes. Every time I get paid, I immediately transfer 25-30% to that account. That way when the quarterly payments come out, I'm not scrambling to find the money. Also, FreeTaxUSA's quarterly calculation is pretty accurate, but I'd recommend being slightly conservative and rounding up your payments by $50-100 per quarter. Better to get a small refund than owe penalties. The IRS underpayment penalties aren't huge, but they're annoying enough that you want to avoid them. If you're really worried about getting it right the first year, consider making your first quarter payment a bit higher than calculated - you can always adjust the remaining quarters down if needed.

I've been running a small auto repair shop for about 4 years and had similar thoughts when cash jobs started piling up and the tax burden felt overwhelming. What really changed my perspective was talking to a buddy who owns a body shop - he got audited two years ago even though he was reporting everything correctly. The IRS agent told him that auto repair shops, along with restaurants and other cash-heavy businesses, are in their "high priority" audit category. They apparently have software that flags businesses when cash transaction percentages fall below industry averages. Even legitimate businesses get scrutinized heavily. But here's what really opened my eyes - after that scare, I finally invested in a tax professional who specializes in automotive businesses. Turns out I was missing a ton of legitimate deductions: mileage between parts runs and customer locations, a portion of my shop insurance, tool depreciation, work uniforms, even business use of my personal truck for picking up parts after hours. Last year alone, proper tax planning saved me about $8,200 legally. That's actually more than I ever thought about "saving" through risky shortcuts, and I sleep great at night knowing everything is above board. The stress relief has been huge too. I can focus entirely on customer service and growing my business instead of worrying about covering tracks or what might happen if I got selected for an audit. Sometimes the harder path really is the smarter path in the long run.

As someone who's been in small business accounting for over 15 years, I have to echo what everyone else is saying - the risks absolutely outweigh any potential benefits here. But I wanted to add a perspective that I haven't seen mentioned yet. Beyond the audit risks and penalties, there's another consequence that can be devastating: losing your business licenses and professional certifications. Many states have provisions that allow them to suspend or revoke business licenses for tax evasion. If you're caught underreporting income, you could literally lose the legal right to operate your repair shop. I've seen this happen to three different clients over the years. One was a small HVAC contractor who thought he was being smart by skimming about $18k annually in cash jobs. When the IRS caught him, not only did he face the typical penalties and interest (which totaled over $35k), but the state also suspended his contractor's license for 18 months. He essentially had to shut down his business completely during that period. The legitimate alternatives people have mentioned here are spot-on. I regularly help small repair businesses find $6-12k in annual tax savings through proper deductions and planning. The Section 199A deduction alone can be huge for service businesses - it's literally free money if you qualify and structure things correctly. My advice: invest in a tax professional who specializes in small service businesses. The cost is typically $1,200-2,000 annually, but the savings and peace of mind are worth many times that amount. Don't risk everything you've built for what amounts to a relatively small short-term cash flow benefit.

I've been following this thread closely as someone in a very similar situation - US-Hungarian dual citizen, born in US, never lived in Hungary, all income US-sourced. The consensus here seems reassuring that the treaty termination shouldn't create new filing obligations for us. One thing I wanted to add based on my research: Hungary's tax law actually has specific provisions for "non-resident Hungarian citizens" that generally exempt them from Hungarian tax obligations unless they have Hungarian income or spend significant time there. This is codified in their domestic tax law, not just the treaty, so it should remain in effect after termination. I also contacted a Hungarian tax advisor who confirmed that Hungary doesn't have the same "citizenship-based taxation" approach as the US. They're primarily interested in people who are actually conducting economic activity in Hungary or using Hungarian resources/infrastructure. That said, I'm definitely going to follow the advice here about getting written confirmation from the Hungarian consulate, just to have official documentation. Better to be overly cautious with international tax matters! Has anyone found any official IRS guidance specifically about the US-Hungary treaty termination and its impact on dual citizens? I've seen general guidance about treaty terminations but nothing Hungary-specific yet.

I've been researching this exact issue and found some helpful information about the transition timeline. The US-Hungary tax treaty termination takes effect January 1, 2025, with no phase-out period - it's a clean break. The treaty notification was given in 2024, providing the required one-year notice period. What's interesting is that I found IRS Publication 901 has been updated to reflect upcoming treaty terminations, though it doesn't get into specific scenarios like dual citizens with no Hungarian income. The publication does confirm that when treaties terminate, you fall back on each country's domestic tax laws. For those looking for official US guidance, I'd recommend checking Form 8833 instructions, which deals with treaty-based return positions. While it's mainly for claiming treaty benefits, it might provide insight into reporting requirements when treaties no longer exist. I'm also planning to contact both the Hungarian consulate and IRS as others have suggested. Given how many dual citizens this affects, it would be great if someone could compile the official responses we get and share them back with this community.

3 Has anyone used the IRS Free File program when transitioning from 1040-NR to 1040? I'm in the same boat and wondering if any of those services handle this state refund situation correctly.

I went through this exact situation two years ago when I transitioned from H-1B to green card status. The key thing to understand is that your state refund is taxable to the extent you received a federal tax benefit from deducting those state taxes on your 1040-NR. Since you were required to itemize on the 1040-NR (no standard deduction available), you almost certainly did receive a tax benefit from the state tax deduction. However, the amount that's taxable might not be the full refund amount if you hit the $10,000 SALT deduction cap. You'll need to do what's called the "tax benefit rule" calculation. Look at your 2023 return and see how much state tax you actually deducted. If it was limited by the SALT cap, then only the portion that provided a benefit is taxable when you receive the refund. The change from nonresident to resident status doesn't affect the taxability of the refund - what matters is whether you got a federal tax benefit in the year you took the deduction. Report the taxable portion on Schedule 1, Line 1 of your 2024 Form 1040.

Does anyone know if we need to wait for the 1095-C before filing taxes? I usually file in February to get my refund faster, but my employer is always late sending these forms.

Great question! As someone who used to toss these forms too, I learned the hard way that you should definitely keep your Form 1095-C. While you don't need to attach it to your tax return, it's crucial documentation that proves you had qualifying health coverage. The form serves a few key purposes: it shows the IRS that your employer offered you affordable coverage that meets ACA requirements, which can affect your eligibility for premium tax credits if you ever shop for marketplace insurance. It also provides proof of coverage dates, which is important for your records and could be needed if you're ever audited. Even though the federal penalty for not having coverage is currently zero, some states still have their own individual mandates. Plus, if there's ever a discrepancy about your coverage or if you need to prove you had insurance for any reason, this form is your official documentation. My advice: keep it with your other tax documents for at least 3 years (the standard IRS audit window). It's one of those "better safe than sorry" situations where having it and not needing it is way better than needing it and not having it!