Hey Sophia! I totally get the panic - I was in your exact shoes two years ago making around $38k with delivery apps. The good news is it's not as scary as it seems once you understand the basics. Here's the real deal: You won't owe 30-40% to the IRS. That person was probably mixing up gross vs net income. As a gig worker, you'll pay self-employment tax (about 15.3%) plus regular income tax on your profits AFTER deductions. With proper deductions (especially mileage), your effective tax rate will likely be closer to 15-20%. Your mileage tracking in a notebook is perfect! That's going to be your biggest deduction. Also track things like: - Phone bill (business portion) - Insulated delivery bags - Car washes if you clean your car for work - Any other delivery-related expenses For the quarterly payments - yes, you should have been making them, but don't panic. The penalty isn't huge for first-time situations, especially if you file and pay on time. Going forward, set aside about 25% of your earnings each week for taxes. One last tip: consider getting help this year since it's your first time. Whether that's a tax pro, software designed for gig workers, or even calling the IRS directly for guidance. It's worth the investment to get it right and understand the process for next year. You've got this! The tax stuff seems overwhelming at first but becomes routine once you learn the system.

Don't stress too much about this! I've been doing gig work for 3 years and that 30-40% figure someone told you is way off. Here's what you're actually looking at: You'll pay self-employment tax (15.3%) plus income tax on your net profit after deductions. With good record keeping and deductions, you're probably looking at an effective rate around 18-22% total. Your notebook mileage tracking is gold! That's likely your biggest deduction - around 67 cents per business mile for 2025. If you drove 25,000 miles for deliveries, that's about $16,750 in deductions right there. For quarterly payments - yeah, you should've been making them, but the penalty isn't catastrophic. It's usually a few hundred dollars max for someone at your income level. Just make sure to file and pay on time this April. Start setting aside 25% of your weekly earnings now for next year's taxes. Open a separate savings account just for this - trust me, it's a lifesaver when tax time rolls around. You can also deduct things like your phone bill (business portion), delivery bags, car washes for work, parking fees, tolls, etc. Just keep receipts and be reasonable about business vs personal use percentages. Consider using tax software designed for gig workers or finding a CPA who understands 1099 work. It's worth the cost to get it right the first time and learn the system for future years. You're not in trouble - just needs some organization and planning going forward!

I just want to emphasize something that might ease your mind a bit - criminal prosecution for tax issues is extremely rare and typically only happens in cases of deliberate fraud or evasion, not simple inability to pay. The IRS prosecutes fewer than 3,000 people per year out of millions of taxpayers, and these are almost always cases involving intentional deception. Your situation sounds like a legitimate financial hardship, not tax evasion. The fact that you're worried about it and seeking advice shows you're trying to do the right thing. The IRS actually prefers to work with taxpayers to collect what's owed rather than pursue expensive legal action. Here's my practical advice: File your return on time (even if you can't pay), be honest about your situation, and communicate with the IRS when they contact you. They have many programs designed specifically for people in your situation - payment plans, hardship deferrals, and even offers in compromise where you might pay less than the full amount. The stress you're feeling is understandable, but jail time is not something you need to worry about here. Focus on filing your return and exploring your payment options.

I can relate to the anxiety you're feeling - I went through something similar a couple years ago when I owed about $4,800 and was completely broke. The fear of jail time was keeping me up at night too, but I learned that's really not how it works for people in genuine financial hardship. The key thing that helped me was understanding that the IRS distinguishes between "can't pay" and "won't pay." They have entire departments dedicated to helping people who want to resolve their debt but lack the immediate funds. What matters most is showing good faith - file your return on time, communicate when they contact you, and be honest about your financial situation. I ended up qualifying for a payment plan of just $85/month based on my income and expenses. The process was way less scary than I imagined. The IRS agent I spoke with was actually pretty understanding and just wanted to find a solution that worked for both sides. Don't let the fear paralyze you into inaction. File your return even if you can't pay, and know that there are real options available. You're going to get through this!

I was in a similar situation last year with comparable income and completely understand the confusion! The ~$53,000 estimate is probably close to accurate, but here's what helped me wrap my head around it: Think of it like climbing stairs - you don't jump straight to the top tax rate. You pay 10% on the first "step" of income, then 12% on the next step, and so on. So even though part of your $233K hits the 24% bracket, most of your income is taxed at much lower rates. The key insight that finally clicked for me: your effective tax rate (total tax divided by total income) will be much lower than that 24% marginal rate. In your case, it's probably around 15-16% effective rate, which makes that $53K number make more sense. Also, don't forget about pre-tax retirement contributions - if you're not maxing out 401(k)s, that's an easy way to reduce your taxable income and move more dollars into lower brackets. We saved about $7,000 in taxes just by increasing our retirement contributions.

I went through the exact same confusion with progressive tax brackets last year! What helped me understand it was realizing that the $53,000 estimate you're seeing is likely accurate, but it's important to break down what that actually means. Here's the simplified version: imagine your income as a stack of money divided into chunks. The first $29,200 (standard deduction) isn't taxed at all. Then the government taxes each chunk at different rates - 10% on the first chunk, 12% on the next, 22% on the next, and only the very top portion at 24%. So you're NOT paying 24% on your entire $233,000. You're only paying that highest rate on the amount above $190,750. Your effective tax rate (what you actually pay overall) will be closer to 16-17%. One thing that really helped us: we used our HSA and maxed out 401(k) contributions to bring our taxable income down. Even small adjustments can move you into lower brackets and save thousands. The tax code rewards retirement saving, so it's worth looking into if you haven't already!

This is such a helpful thread! I'm in a similar situation with my LLC partnership and was completely lost on how to handle my home office deduction. Based on what everyone's shared here, it sounds like the key is making sure your partnership agreement explicitly allows for unreimbursed partner expenses. Quick question for those who've gone through this - when you report these as adjustments on Schedule E, do you need to attach any special forms or documentation to your return, or is it just a matter of entering the amounts in the right places? I want to make sure I'm not missing any required paperwork that could cause issues later. Also, has anyone dealt with state tax implications? I'm in California and wondering if the federal treatment carries over automatically or if there are additional state-specific considerations.

I went through this exact situation last year when I transitioned from sole proprietorship to an S-corp. The biggest mistake I made initially was trying to force the home office deduction through the old Schedule C method, which obviously doesn't work anymore. What I learned is that timing matters a lot here. If you're already set up as an S-corp for this tax year, your best bet is probably the rental arrangement that Ethan mentioned - have your S-corp pay you reasonable rent for the office space. I set mine up retroactively for 2024 (with proper documentation) and it worked out to about $2,100 in tax savings. But here's something to consider for next year: you might want to evaluate whether staying as an S-corp is actually the best structure for your situation. If home office deductions are significant for you (sounds like 15% of your home could be substantial), you might benefit more from converting to a single-member LLC and electing to be taxed as a sole proprietorship. That way you get back to the straightforward Schedule C treatment. The math really depends on your total income, self-employment tax implications, and other factors. Sometimes the simplicity and deduction opportunities of Schedule C outweigh the potential payroll tax savings of an S-corp, especially if you're not paying yourself a huge salary anyway.

Hey Quinn, I went through almost the exact same situation when I became guardian of my nephew! The confusion around Head of Household withholding is so real. One thing that might help is understanding that the W-4 withholding tables are designed for "typical" situations, but guardianship can create some unique tax circumstances. For example, if your niece lived with you for the full year versus part of the year, or if there are any other dependents/credits in play, it can throw off the standard calculations. Also, I'd recommend double-checking that your employer correctly processed your HOH status. Sometimes HR departments accidentally process the W-4 as "Single with 1 allowance" instead of true Head of Household, which would definitely cause underwithholding. The fact that your refund jumped so dramatically in 2022 when you first claimed her suggests the system IS working - it's just the withholding throughout 2024 that needs adjustment. Definitely use that IRS withholding calculator others mentioned, but also consider setting aside maybe $100-150 per month in a separate savings account as a tax buffer until you get the withholding perfected. You're doing great navigating this on your own - guardianship taxes are complicated even for people with experience!

The withholding confusion makes total sense! I went through something similar when I first started claiming my stepson as a dependent. One thing that really helped me was requesting a mid-year paycheck review from HR. I brought in my prior year's tax return and asked them to walk through exactly how they were calculating my withholding based on my W-4. Turns out they had been using the wrong tax tables - they were withholding based on "Married Filing Separately" instead of "Head of Household" even though my W-4 was filled out correctly. The difference in withholding between those two statuses can be substantial. HOH gets a higher standard deduction ($20,800 vs $14,600 for single filers), which means less taxable income, which should mean less withholding throughout the year. But if the payroll system isn't applying the right tables, you could end up with either too much OR too little withheld. I'd definitely recommend taking your W-4 and a recent paystub to HR and asking them to verify they're using the correct withholding tables for Head of Household. Sometimes it's not the W-4 form that's wrong, but how the payroll system interprets it. Also, since you mentioned being 28 and figuring this out on your own - don't feel bad about not knowing this stuff! Tax withholding is genuinely complicated, especially when you have dependents and filing status changes. You're asking the right questions.