Think of this like when a restaurant brings you the wrong order - you need to flag down the server right away, not just eat it and complain later! I had almost the identical situation last year. I owed about $2,200 for 2021 and was supposed to apply my 2022 refund to it. They sent me the full refund anyway. I called within a week, explained the situation, and the agent was actually super helpful. They did a direct transfer from my account to cover the old balance and even waived the small amount of additional interest that had accrued. The key was acting quickly and being super polite on the call. The whole thing took about 20 minutes once I got through to someone. Don't stress too much - this happens all the time and there's a simple fix!

This exact thing happened to my neighbor last month! She was panicking because she thought she'd have to pay twice, but it turned out to be a pretty straightforward fix once she knew what to ask for. The IRS agent explained that their computer systems sometimes process refunds before they check for the offset instructions - especially during busy filing season. Here's what worked for her: She called the main IRS number (1-800-829-1040) early in the morning around 7 AM when call volume is lower. When she got through, she specifically asked for a "manual payment application" to transfer her refund amount to her 2022 tax debt. The agent was able to do this over the phone using her bank account info from the refund deposit. They also backdated it to avoid any additional penalties. One thing she learned - apparently if you're on a payment plan already, there can be some glitches in how their system handles refund offsets. The agent told her this is becoming more common as people set up payment plans online. Definitely call sooner rather than later though - she said the agent mentioned that after 90 days it becomes much harder to do these manual transfers.

One thing nobody mentioned yet - make sure you check if your state requires you to file a state tax return too! Not relevant for the original poster since they're in Oklahoma which does have state income tax, but some states have different minimum filing requirements than federal. I got burned on this my first year doing freelance work in college. Filed my federal return correctly but had no idea I needed to do a state return too. Ended up with a nasty penalty letter a year later. Don't make my mistake!

Just want to add something that helped me tremendously when I was in a similar situation - don't forget about the standard deduction! Even though you're being claimed as a dependent, you still get a standard deduction on your own tax return (though it's limited to your earned income or $1,100, whichever is greater, for 2024). With your $3,950 in 1099-NEC income, after deducting legitimate business expenses (computer equipment, software subscriptions, design materials, etc.), you might find that your taxable income for regular income tax purposes is pretty low or even zero. You'll still owe the self-employment tax on your net profit, but that's separate from regular income tax. Also, since you're a student, look into the American Opportunity Tax Credit - your parents might be able to claim it for your education expenses, which could help offset some of the tax impact for your family overall. It's worth having a conversation with them about this since it affects both your returns.

Quick question - I'm in the same boat but my tax software didn't generate a 1040-V for me. Where can I get this form? Is it on the IRS website?

Just to add another perspective - I've been through this exact situation multiple times over the years. You definitely do NOT need to include your tax return when mailing Form 1040-V with your payment after e-filing. The IRS already has your return electronically, and the 1040-V voucher contains all the necessary information to match your payment to your account. One thing I'd emphasize is to make sure you sign the Form 1040-V - I've seen people forget this step! Also, if your payment is over $100,000, you actually need to use different procedures, but for most people the standard 1040-V process works perfectly. Don't stress about it - you're doing it right by just sending the voucher and check together!

Has anyone used business tax software for their 1065 instead of a CPA? Any recommendations? I'm in a similar boat trying to save on accountant fees.

I went through this exact same situation last year with my first 1065 filing! The distinction between income allocation and distributions was the most confusing part for me too. Just to reinforce what others have said - you absolutely will pay taxes on the full $63,000 allocated to you, even though you only took $48,000 in cash. Think of it this way: the partnership earned profits, and your share of those profits ($63,000) is what gets taxed on your personal return. The $48,000 you actually took out is separate - it's just you accessing money that was already allocated to you. The $15,000 difference stays in the business and increases your ownership stake (basis). So when you eventually sell your partnership interest or the business liquidates, that $15,000 will reduce any taxable gain you might have. For the $12,000 capital contribution, that also increases your basis but doesn't affect your current year tax liability. It's essentially you investing more money into the business. One tip - keep really detailed records of all these transactions (contributions, distributions, allocated income) because you'll need to track your basis year over year. It becomes super important if you ever take distributions that exceed your basis, as those become taxable events. Good luck with the filing! It's definitely learnable, but don't feel bad if you end up going back to your CPA this year while you get comfortable with the concepts.

Has anyone else gotten confused about the ordering of NOL usage? My understanding is that you have to use the oldest losses first, but our tax software seems to be applying them differently.

I'm dealing with a similar situation as a new startup owner. One thing that helped me understand this better was realizing that Form 1120 line 29a is specifically for the NOL deduction you're claiming in the CURRENT year, not just tracking your total accumulated losses. Since you have negative taxable income again this year, you won't enter anything on line 29a because there's no positive income to offset. But you're absolutely building up your NOL carryforward balance - you'll have $42,000 from year 1 plus your new $38,000 loss from this year. The key is maintaining good records of these accumulated losses. I keep a simple schedule that tracks each year's NOL separately because when you eventually become profitable, you'll need to apply them in the correct order (oldest first) and follow the 80% limitation rule for post-2017 losses. Don't worry - you're not missing out on any tax benefits by not using the NOLs now. They'll be there waiting for you when your startup starts generating taxable income!