Any CPAs up in here? Estimated tax question

[isufbcurt]

Had a side hustle going a few years ago so I created an LLC. I paid the taxes for the business income but didn’t file the right form. No idea I did it wrong until…

2 years later I get a letter from the IRS saying “hey, you didn’t file properly two years ago. You owe us a $5,000 fine.”

This was 2020 so basically impossible to get them on the phone. I tried and tried and tried.

A couple weeks later I get another letter that says “you still owe us $5,000. And now we’re adding another $250. And if you don’t pay in 30 days we’re putting a lien on your property.”

By the grace of God I got someone on the phone. She fixed it in 5 minutes. Everything was forgiven and cleared from the record.

Never been so stressed. I’ll hire a CPA for the rest of my life.

TDLR: The IRS don't F around.

A new client to me this year had something similar last year.

She has a single member LLC business. In 2023 she had her dad (80 years old) do her taxes. She got letters from the IRS with penalties for not filing her K1 on time.

I was so confused. Finally we figured out her dad filed Form 1065, a partnership tax return for her business even though she was the only owner. I had her ask her dad why he filed that form, he told her she had a business and that was the form businesses had to be filed on. UGGGHHHHHHHHHHH.

He also did the tax return by hand and mailed it in. I told her if she would have e-filed the error would have been caught because the IRS would have rejected the form 1065 because her EIN isn't associated with a Form 1065 tax return.

She was very happy to have someone now who actually knows what they are doing.

 

[qwerty]

send her a 1099 plz

Sounds like police code to me . . . .

 

[CloneLawman]

Plus I’d like to send invoices to the chucklefucks in the cave when I spend 15 minutes writing good faith measured legal analysis/caselaw….

Or maybe I should just stop doing that…

No, no! THEY are wrong! Not me!

They're not worth it. That's why I gave up such attempts long ago.

 

[throwittoblythe]

A new client to me this year had something similar last year.

She has a single member LLC business. In 2023 she had her dad (80 years old) do her taxes. She got letters from the IRS with penalties for not filing her K1 on time.

I was so confused. Finally we figured out her dad filed Form 1065, a partnership tax return for her business even though she was the only owner. I had her ask her dad why he filed that form, he told her she had a business and that was the form businesses had to be filed on. UGGGHHHHHHHHHHH.

He also did the tax return by hand and mailed it in. I told her if she would have e-filed the error would have been caught because the IRS would have rejected the form 1065 because her EIN isn't associated with a Form 1065 tax return.

She was very happy to have someone now who actually knows what they are doing.

If you check your DMs from 2020/2021, you’ll find a frantic me asking for help

My case was pretty stupid. I formed my LLC as a partnership because a friend told me me I should to “protect your spouse from liability.” They had a small business and had been sued. Their opponent tried to pierce the corporate veil because the husband wasn’t on the LLC but worked in the business.

I filled out the form to determine my tax liability but didn’t actually file the form itself.

I ended up paying a CPA to re-file that years corrected returns which cost me a pretty penny.

Thank god for the one-time forgiveness from the IRS. I closed the LLC after getting that all cleaned up and ceased operations.

The few hundred dollars I pay a CPA now is well worth the decrease in stress.

 

[jcyclonee]

They're not worth it. That's why I gave up such attempts long ago.

I thought you gave up because you needed more time to tend to your mullet.

 

[jcyclonee]

A new client to me this year had something similar last year.

She has a single member LLC business. In 2023 she had her dad (80 years old) do her taxes. She got letters from the IRS with penalties for not filing her K1 on time.

I was so confused. Finally we figured out her dad filed Form 1065, a partnership tax return for her business even though she was the only owner. I had her ask her dad why he filed that form, he told her she had a business and that was the form businesses had to be filed on. UGGGHHHHHHHHHHH.

He also did the tax return by hand and mailed it in. I told her if she would have e-filed the error would have been caught because the IRS would have rejected the form 1065 because her EIN isn't associated with a Form 1065 tax return.

She was very happy to have someone now who actually knows what they are doing.

You're a tax expert and that's not even your prime area of expertise. Has she seen how well you can drive a car making only left turns?

 

[nfrine]

I vote that anytime one of our resident professionals (CPAs, lawyers, doctors, etc.) thoroughly answer questions on here we should require a $10 donation to We Will as payment.

$20 if is a correct answer!

 

[wintersmd]

I have a question on the 2021 Recovery Rebate Credit. I went back and looked at my 2021 taxes and I did not claim the tax credit. I had myself, wife, daughter and mother in law as dependents that year. I am pretty sure that we all received the stimulus checks that were sent out so I am not sure if I am entitled to the rebate. I am hesitant on sending in anything because I don't want Uncle Sugar coming after me for false claims. 26 years in the government and I now what they can do.

a. How do I know if I am eligible for the tax credit?
b. Do I need to send in an amended tax return for 2021 if I am eligible?
c. How difficult is it to do and would it be worth my time to file?

Yes, if I am eligible I will give some of it to CW and the We Will organization. And Yes, I just cut a check to Iowa State for $1300 for my season football tickets. OUCH

 

[CloneLawman]

I thought you gave up because you needed more time to tend to your mullet.

I have people to do that now.

 

[isufbcurt]

If you check your DMs from 2020/2021, you’ll find a frantic me asking for help

My case was pretty stupid. I formed my LLC as a partnership because a friend told me me I should to “protect your spouse from liability.” They had a small business and had been sued. Their opponent tried to pierce the corporate veil because the husband wasn’t on the LLC but worked in the business.

I filled out the form to determine my tax liability but didn’t actually file the form itself.

I ended up paying a CPA to re-file that years corrected returns which cost me a pretty penny.

Thank god for the one-time forgiveness from the IRS. I closed the LLC after getting that all cleaned up and ceased operations.

The few hundred dollars I pay a CPA now is well worth the decrease in stress.

Yeah I remember that lol

 

[Tailg8er]

I have a question on the 2021 Recovery Rebate Credit. I went back and looked at my 2021 taxes and I did not claim the tax credit. I had myself, wife, daughter and mother in law as dependents that year. I am pretty sure that we all received the stimulus checks that were sent out so I am not sure if I am entitled to the rebate. I am hesitant on sending in anything because I don't want Uncle Sugar coming after me for false claims. 26 years in the government and I now what they can do.

a. How do I know if I am eligible for the tax credit?
b. Do I need to send in an amended tax return for 2021 if I am eligible?
c. How difficult is it to do and would it be worth my time to file?

Yes, if I am eligible I will give some of it to CW and the We Will organization. And Yes, I just cut a check to Iowa State for $1300 for my season football tickets. OUCH

Who the hell is still cutting checks in 2025?!? This guy, apparently.

 

[wintersmd]

Who the hell is still cutting checks in 2025?!? This guy, apparently.

I still pay in cash when I can.

 

[Tailg8er]

I still pay in cash when I can.

Cash is much better than check. Very little reason for checks to even exist in this day & age.

 

[ghyland7]

They're not worth it. That's why I gave up such attempts long ago.

Imagine if I could send out a 0.3 for that.

But hey I just left private practice for government work!

 

[isufbcurt]

Who the hell is still cutting checks in 2025?!? This guy, apparently.

Businesses routinely pay will checks. I'd say approx. 75% of my clients pay by check, 20% Venmo and 5% cash

I'd much rather be paid by check than cash. Cash I have to go to the bank to deposit, checks I can deposit via my phone.

 

[IcSyU]

Cash I have to go to the bank to deposit

Who said anything about depositing?

 

[BCClone]

Businesses routinely pay will checks. I'd say approx. 75% of my clients pay by check, 20% Venmo and 5% cash

I'd much rather be paid by check than cash. Cash I have to go to the bank to deposit, checks I can deposit via my phone.

Some places it’s a struggle or clunky to get solid receipts so checks help create a paper trail.

 

[isufbcurt]

Who said anything about depositing?

I deposit everything. Get that revenue as high as I can so I can write a big advertising payment to the racing business.

 

[Clone309]

I have a question on the 2021 Recovery Rebate Credit. I went back and looked at my 2021 taxes and I did not claim the tax credit. I had myself, wife, daughter and mother in law as dependents that year. I am pretty sure that we all received the stimulus checks that were sent out so I am not sure if I am entitled to the rebate. I am hesitant on sending in anything because I don't want Uncle Sugar coming after me for false claims. 26 years in the government and I now what they can do.

a. How do I know if I am eligible for the tax credit?
b. Do I need to send in an amended tax return for 2021 if I am eligible?
c. How difficult is it to do and would it be worth my time to file?

Yes, if I am eligible I will give some of it to CW and the We Will organization. And Yes, I just cut a check to Iowa State for $1300 for my season football tickets. OUCH

To find the amounts of your Economic Impact Payments, check:

Your Online Account: Securely access your individual IRS account online to view the total of your first, second and third Economic Impact Payment amounts under the “Economic Impact Payment Information” section on the Tax Records page.

Create an IRS account it will tell you if you got all 3. If you have great nothing needs to be done. If you did not just amend 2021 before April 15th.

 

[Tailg8er]

Businesses routinely pay will checks. I'd say approx. 75% of my clients pay by check, 20% Venmo and 5% cash

I'd much rather be paid by check than cash. Cash I have to go to the bank to deposit, checks I can deposit via my phone.

Cash isn't the only option besides checks, though..

Our company is up to ~75% EFT payments & we try to get as many vendors signed up for that as possible. Personally I'm probably at 99% of paying for things electronically - whether that's credit card, e-check, online bank payment, autopay, venmo, paypal, whatever.