Has anyone tried requesting penalty abatement for first-time penalties? I heard the IRS has some program for this but don't know if it applies to multiple years of unfiled returns.

I was in almost the exact same boat as you about 2 years ago - 4 years of unfiled taxes as a freelance web developer, around the same income range, complete anxiety spiral every tax season. I know how overwhelming this feels, but you CAN get through this. Here's what I wish someone had told me: the IRS is actually pretty reasonable when you voluntarily come forward. I ended up owing about $18,000 total including penalties across all years, but I got on a payment plan for $285/month and they even approved partial penalty abatement later. My biggest mistake was waiting so long because I thought it would be "too complicated" - but once I actually started gathering documents and filing, it wasn't nearly as bad as the anxiety made it seem. Start with whatever records you have, even if they're messy. Bank statements can substitute for missing receipts in many cases. One thing that really helped me was setting up a dedicated workspace just for tax stuff and tackling one year at a time. Don't try to do everything at once or you'll get overwhelmed again. You've already taken the hardest step by deciding to fix this - the rest is just paperwork and patience. You've got this! Future you will thank present you for finally addressing it.

Dont forget about state taxes too!! Depending on your state, you might owe significant state taxes on that gain. Some states give preferential rates to capital gains, but many tax them as ordinary income at the state level.

Great thread everyone! As someone who went through a similar situation with a large inherited property sale, I want to emphasize a few key points that have been mentioned: 1. **Form 8949 → Schedule D → Form 1040 flow is correct** - Don't try to separate them. The tax software/worksheets handle the preferential rates automatically. 2. **Definitely make estimated payments** - With a gain that large, you're looking at roughly $1.5M+ in total taxes (federal + NIIT + state). The underpayment penalties on that amount would be painful. 3. **State taxes vary wildly** - Some states have no capital gains tax, others treat it as ordinary income. This could easily add another $500K+ to your tax bill depending on your state. 4. **Consider tax-loss harvesting** - If you have any other investments with losses, now might be the time to realize them to offset part of this gain. One additional tip: if this was inherited property, make sure you're using the stepped-up basis from the date of inheritance, not your grandparents' original purchase price. That could save you hundreds of thousands in taxes if the property appreciated significantly while they owned it. With this much money involved, definitely get professional help - either a CPA who specializes in high-net-worth situations or use multiple verification methods like the tools others mentioned. Better to spend a few thousand on professional advice than make a costly mistake!

16 Has anyone dealt with the IRS sending notices after filing late? I'm worried that even after I file, I'll start getting threatening letters in the mail.

Don't beat yourself up about this - it happens to more people than you'd think! I work as a tax preparer and see late filers regularly. The key thing is that you're taking action now. Since you mentioned you're likely owed a refund, you're in a much better position than someone who owes money. Here's what I'd recommend: 1. Gather all your 2023 tax documents (W-2s, 1099s, receipts for deductions, etc.) 2. File your return as soon as possible - you can use the same tax software you'd normally use 3. Don't worry about requesting an extension now since you're already past the deadline One thing to keep in mind: if you had any estimated tax payments or withholding that resulted in overpayment, you want to file sooner rather than later. While you have 3 years to claim a refund, getting your money back faster is always better. The IRS processes late returns the same way as on-time returns when you're due a refund, so you should receive your refund within the normal timeframe (usually 6-8 weeks for paper returns, faster for e-filed returns). You've got this! Just take it one step at a time and you'll be back on track.

As someone who recently went through a similar situation with inherited farmland, I'd strongly recommend getting multiple perspectives before making your decision. The $12,000 annual rental income you're receiving works out to about $185 per acre, which is actually pretty competitive for central Illinois. Before switching to CRP, consider that you'd be locking yourself into a 10-15 year contract. While CRP payments might be similar or slightly higher, you lose the flexibility to adjust rental rates or change land use as market conditions evolve. Farm rental rates have been increasing in many areas, so your current arrangement might become more valuable over time. Also, don't forget that your current rental income is truly passive - the tenant farmer handles all the work and maintenance. With CRP, you'll have ongoing responsibilities for conservation compliance and maintenance that could eat into your returns. I'd suggest getting quotes from both your FSA office for CRP rates and from a few other local farmers for rental rates before making your final decision. This way you can make an informed choice based on actual numbers rather than speculation.

One thing that hasn't been mentioned yet is the Wildlife Habitat Incentive Program (WHIP) and the Environmental Quality Incentives Program (EQIP) - these might be alternatives worth exploring alongside CRP. Since your land is highly erodible, you might qualify for cost-share programs that allow you to continue renting while implementing conservation practices. This could give you the best of both worlds - maintaining your rental income while receiving additional payments for conservation improvements. Also, given that you're in central Illinois, check if your county participates in any state-level conservation programs. Illinois has some additional incentive programs that can supplement federal programs and might offer more flexibility than a long-term CRP commitment. I'd recommend contacting both your local FSA office and your county's Soil and Water Conservation District - they often have different programs available and can help you understand all your options before committing to any single approach.

Does using TurboTax make handling crypto taxes easier? I've got some Ethereum I bought last year but I also did a small amount of trading between different coins. Not sure if I should use TurboTax or maybe try a more specialized crypto tax software?

Great breakdown, Jamal! This is super helpful timing since I'm about to start my 2024 taxes. I've been sitting on some Bitcoin and Dogecoin I bought last spring and had no idea how to handle that cryptocurrency question. One thing I'd add for anyone reading - make sure you keep good records of your purchase dates and amounts even if you're just buying and holding. I learned this the hard way when I couldn't find my Coinbase statements from early 2024. Even though I didn't have reportable transactions this year, having that documentation will be crucial if/when I do decide to sell in the future for calculating capital gains. Also, does anyone know if the rules are the same for crypto you receive as gifts? My brother sent me some Bitcoin for my birthday but I didn't do anything with it.