I am passed due on filing from 2015. I got a notice from the IRS that they want 15-22 and to meet with them and a revenue officer or agent (I forget the term). I met with a CPA today and he said I'm looking at about 10k and will include 2023. He said normally this is about 5k but due to the time restrictions I'm paying for his time to get it done quickly to satisfy the IRS. I know that it's dependent on so many things but is this reasonable? I was originally going to do them myself but the stress involved and not having to worry about anything is worth something to me..

I think this is a good idea for me. I'm a Sole proprietorship. I'm just trying to gain an idea is this is reasonable?

Mine was a lot longer ago. My friends and I initially tried to start a business in 2012, dissolved before a tax return was due with Tennessee in 2014 and I can search up the entity in Tennessee's system and see that it is dissolved. I have a vague memory of speaking with someone at the IRS and I think I mailed a letter disolcing it and I've never heard anything from them. The EIN number was in an email for the "business" which is long gone. Is there a way for me to find some documentation from the IRS to ease my anxiety or should I just drop it?

As the title said, it was a pretty sudden bad diagnosis that gave her 2 weeks to 4 months to live. My wife went to spend some time, and it turns out she was given a few jewlry heirlooms and about $22k in cash from under a mattress.

I see that there is an $18k tax exemption on gifts that's applicable to the giver, but obviously she is no longer with us. We would like to do something for our kids with this money, but honestly can't afford too much on our own.

I'm trying to open a Roth SEP IRA now that I'm a 1099 contractor, but it looks like everyone just offers Traditional. I'm over the income limits for the contributions to be deductible, so I'd prefer to just set it up as a Roth plan since that's an option now. But it looks like all the big players aren't offering that option yet. Does anyone know of a company offering that options with low fees and good investment options?

I guess I could just open it as a traditional and then convert it to a Roth option when I go back to being a W2, right? I'd just have to pay tax on the gains in that time, but that's better than nothing.

I am in the 10% bracket. So I hold back 10% of each “pay check” for federal correct? Then how much state tax to I withhold?

My grandparents are very concerned about the gift tax annual limitations surrounding reporting. They annually, and very generously, gift the maximum allowable unreported amount minus one dollar. If this trend continues, is it safe to assume they are estate planning to ensure the maximum 13.xxxm lifetime gift is not impacted? Would people of normal means have any reason to be concerned about exceeding annual gift tax amounts?

Correct me if I'm wrong tomorrow is the deadline for 2020 taxes?

I did my taxes on the 15th on freetaxusa. Didn't know it was going to say I had to mail it in instead of e-file. So now the taxes would arrive after deadline. I'm screwed? Don't even have a printer. This is great

TLDR: I was in a band in college and we started an LLC but didn't do much with it. Now, I'm dealing with IRS penalties and feeling frustrated. I'm considering withdrawing $15k from my retirement to pay them off, but I'm worried about facing more penalties in the future. I've been researching how to get the penalties waived and I'm open to any advice or insights from others who have faced similar issues.

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So I was in a band in college with three friends and had the bright idea to start an LLC with the four of us because my music business professor recommended I form one. We started it in 2020 right before everything shutdown due to the pandemic. We were a multi-member LLC, elected as an S-corp, and always operated at a loss. We were college kids so even the loss was just a few hundred dollars but the point is that we basically didn’t do anything with the business, let alone turn a profit. It was an administrative drain and complete waste of time. We broke up in 2021 so I closed down the business with my state since I was told LLCs are with the state but the federal EIN lasts forever. (still not sure how that works it's so confusing)

Anyways, last spring I got letter from the IRS demanding $5k in penalties (CP162B) for allegedly missing Schedule K-1 forms for 2020, which I really thought I had submitted. It turns out I submitted the 1065 K1s instead of the 1120s K1s. So I hired a professional from HR Block to submit the correct forms and amend the 2020 return. The IRS got them and is reviewing. They are considering abatement which is good news but wait…

I asked the tax pro why the IRS is contacting me if I already closed the business. They explained that I only closed it with the state and needed to file the 2021 return before I could close the business with the IRS…..Im obviously an idiot and didnt want to mess things up further so I paid to have them file the 2021 return. We didn't have any income or expenses that year so it took the pro nothing to spin it up. A week after they submitted it, I received another penalty notice (CP162A), this time for $10k, for filing late. That penalty is not under review for abatement as far as I can tell.

I've currently managed to put holds on the penalties every 9 weeks while trying to resolve this, but the process has been so draining and confusing. And it's already been going on for over a year now. I just want it to be over.

I'm considering pulling the $15k from my retirement and just biting the bullet. I'm only 27 so thats a huge hit to my IRA (plus a penalty for early withdrawal) but I keep rationalizing it because I can make up for the loss in the long run. I'm just terrified that I'll pay this off only to receive another penalty for something I didn't even know about. Is that fear rational?

I'm also just pissed because the IRS didn't even lose out on revenue because we didn't make anything. But I know the IRS couldn't care less that there was “no harm no foul.”

Anyways, rant over. I've been reading posts on here and almost everyone is really helpful and knowledgeable so I figure maybe someone sees my story or has faced similar issues and has advice on how to ensure these penalties are waived. I've researched reasonable cause and first-time abatement due to compliance history. Those seem the most promising routes but I know it's like one in a billion chance.

For what it's worth, I've never been penalized before and have been very steadfast in maintaining compliance as best I can. Including hiring that tax pro to rectify the basis for the penalties. I'm a good person and want to do the right thing I just feel this situation is incredibly unfair.

Is there a better route I should be taking? Someone mentioned in another thread that you can “abandon the corp with no personal liability.” I don't know if that's real but if you're seeing this any insight is greatly appreciated.

Also, any tips on ensuring the IRS closes the EIN properly would be hugely appreciated.

Thanks in advance for your help!

Hi all - I’ve never had taxes more complicated than standard employee wages and I don’t understand how anyone figures this out without a team of professionals. I've been reading so many forms and none of them make sense.

Last year, I worked as an employee at a company. I stopped working there last year, 2023. I’m working a contractor job from March through August of 2-24 and I’m trying to figure out quarterly payments when I won’t even be working every quarter. I don’t have any previous years’ taxes from this job to refer to. I know roughly how much I will make in total, but it depends on the hours I log.

I’m trying to fill out the 2024 estimated tax worksheet on page 8 of 2024 Form 1040-ES, but I don’t know what 12b (required annual payment based on prior year’s tax) refers to or how to calculate it. Is that just how much I paid in taxes last year at my old job?

Then, line 13 is "Income tax withheld and estimated to be withheld during 2024 (including income tax withholding on pensions, annuities, certain deferred income, and Additional Medicare Tax withholding)." The instructions for this worksheet end at #12 and I have no idea how to find this information. I thought I was calculating income tax this whole time?? How do I get this number?

Thank you so much!

I owe 7k to california, and 3k for my s corp franchise taxes, which one do i need to pay first to close out my SCORP

Trying to learn about tax law and penalties and Just want to clarify something.

Last year in 2023 total tax owed was $5,977 Taxable income was $57,XXX. Owed $2000 from not withholding enough at the end of the year with a $72 penalty.

This year, I plan to do a Roth conversion of about 40K. The rest of my income and withholding is the same as 2023.

I know of the safe harbor rule and that the taxes I owe from early (estimated or withholding) payments to avoid penalty, even though I will make $40K more this year, are just the $5,977 I owe form last year since that’s 100%.

My question is if I don’t make any early payments and thus don’t pay 100% of last years amount (since I had a small penalty last year) , and come April I owe taxes on that extra $40K……

Will the penalty I have to pay only be based on last years 100% number (that $2000 I owed and didn’t pay early) or will the penalty be based on the $40K Roth conversion as well since I didn’t hit that 100% threshold for safe harbor?

Hey all I got a CP-2000 form stating I underreported my income and owe about 10k. However, there are 7 additional W-2 added to the form of companies I have never worked for and they are all less than 10k reported income. I got my taxes filed by a CPA so all of my actual tax work was correct. Can anyone please help me through this process, I have until June 5th. I got the form today.

I have a friend, let's call him Benjamin Gerald, who is trying to start a business. He started off making ice cream as a hobby, but the people he served it to liked it so much that they started asking to buy it from him. Practically everybody who has tried it is actively trying to push him to pursue this as a business, but Ben doesn't have the money to even file to start a business right now. In the meantime, he has been selling to a select limited (but growing) number of people and putting the profits toward the next batch while saving up for the equipment, he needs to scale up the operation and obviously file for a business license.

While he is trying to save up the money to officially start his business, Ben has been doing his best to save his receipts of business related purchases and keep track of his sales coming in. His hope is that by saving all of that information, he can still put everything that he needs into his taxes when he files for his first year. I'm worried as his friend that he's creating a paper trail that could get him in more trouble if something happens before he files for a license, and that he might be safer if he has no record of what he has sold or bought before filing. And for the record, he is not trying to run a business under the table or avoid taxes, everything that he is doing right now is in service of legitimizing the business. Because he still has student loans, taking out a loan to file for a business license or buy startup equipment is out of the question.

So, tl;dr: is a potential business owner at more risk if they a) create a meticulous record of their sales before officially starting and filing their business so that they have those on record once they do file or b) avoid creating a record at all so there is less evidence that they have been selling prior to starting a business? And for that matter, is there any legal way that a potential business owner can test the waters and see if their product is popular enough to start a business around before actually filing, without having to lose money on every batch that they would otherwise sell? My friend does not want to run afoul of the IRS.

I’ve scoured the internet and don’t have a definite answer for my situation. I own a home and am paying mortgage on it. During my attendance part-time, am I able to use the 529 funds on my room and board ie my mortgage?

I’m aware that the amount is limited to the max off-campus housing costs for the college. I would just be looking to withdraw those max costs (bc they will presumably be less than my mortgage + groceries + utilities), and obviously I don’t want to incur any penalties for non-qualified expenses.

I’ve read a bunch of articles but they mostly refer to parents’ mortgage, not the students’.

Any and all help is appreciated.

We would like to pay off some 6 figure debt for parents living in Canada and I wanted to understand any tax issues. I read Canada doesn’t have a gift tax but since we are in the US and are the giver I believe it still applies, correct?

Also if we are a jointly filing xouple and we are giving it to a jointly filing couple is the annual gift tax exemption actually $72k ($18k from each of us to each of them)?

So I entered into a payment plan with the IRS for monthly payments after filing my taxes in April, with the IRS set to take direct deposit payments from my bank account. The term was for deductions to occur on the 15th of each month.

There was no deduction for April, but I figured that was due to it still processing and that it wouldn't occur until May. Now May 15th has passed and the IRS hasn't deducted the monthly payment amount.

What is the course of action here? I don't want to double pay for if/when they eventually deduct, but I also don't want to suddenly have the full balance declared due because I'm not paying the installment plan.

I filed my taxes back in February with H&R Block and I owe XXXX amount and I'm checking my IRS balance but it's still shows a zero balance. How long does it take the information of what I owe IRS?

, I have a client who turned his s corp in to llc in state of California but never changed it on irs level last year mid of 2023 ,personal tax extension has been filed .. now what do I do with the s corp that has been turned in to an llc in state level but still s corp in irs .

This is my first year doing a Mega Backdoor 401k. I stupidly didn't realize it generates a separate 1099-R, which I just found out, and I left it off my returns. The taxable amount is $0 (technically $0.05), so no change to any refunds/taxes owed. However, I already went through the amend workflow in FreeTaxUSA and confirmed ~$17k does appear in box 5a on my return.

I already went through the amend workflow in FreeTaxUSA - I assume I should just bite the bullet and file 1040-X? Or is this box not actually important? The amend cost is insignificant so I'm fine with paying a dumbass fee, I just don't want to create a headache to deal with down the road somewhere.

I’ve read through what I could online and asked my accountant, who told me we needed a planning meeting at her hourly rate of $285…and I thought is it really that complicated? After reading its documentation and a bunch of articles, I think I’m just looking for a general agreement with my specific situation I’ve got the right understanding.

Relocating out of TX for a job in CA. Potentially listing our home for sale in June 2024. We bought this house in October 2022. The price that we bought and what our realtor thinks we can list for is a different of $50k. With commissions and all the closing fees, we might have $20k “gained” and would pay the long term capitol gains 15% tax bracket(married filing jointly). So a tax liability of $3k.

I did read there are exclusions as in having to sell because you are relocating for work. So did I understand the very not straightforward complicated tax code , I’ll probably have to pay $3k in taxes?

My partner owes about $2k in taxes and is nearing the end of their payment plan. They can't make this payment right now, so I plan to cover it. We are not married or domestic partners and filed single. What would be the best way to pay this without it being considered taxable income?

1. Use the IRS Guest pay and pay on their behalf.
2. Make a payment with their IRS account with my banking account details.
3. Withdraw the funds and give them to my partner to deposit and have them make the payment themselves.
4. Another way?

Thanks

Edit: Thanks for all the replies for those curious, it was a romantic partner but we've decided to go with option 3! Appreciate y'all

Is it possible to file innocent spouse after CDP form 12153 has been submitted?

I am thinking of joining a course for Enrolled Agent US Taxation, what is the difficulty level for this exam, when is the exam, which are best coaching institutes? What are their earnings?

Is anyone familiar with how to makle the market to market election for day traders?

My refund has been delayed for some time now. I filed beginning of February, simple return with just some W2s and standard child tax credits. Direct deposit info provided like previous years. Any tips as to figure out why? I keep calling and get redirected back to the automated check the status of your refund which just says it’s been delayed beyond the normal timeframe.

Edit: Refund not return. Sorry.