2 Do you know if I can deduct the initial cost of my certification course and background check? I spent almost $500 getting certified and wasn't sure if that counts since it was before I actually started working as a signing agent.

9 Yes, you can absolutely deduct the initial certification costs and background check fees! Those are considered start-up costs for your business, and the IRS allows you to either deduct them in the first year (up to $5,000) or amortize larger start-up costs over 15 years. Even though you paid for them before earning your first dollar as a notary, they're directly related to your business and completely deductible. Just make sure you keep the receipts and documentation showing these were required steps to become a signing agent.

5 Can you explain more about this S-Corp thing? I've heard people mention it but don't really understand why it would save on taxes or when it makes sense.

That's a great way to explain it! I'm definitely going to try this approach. Our tax liability last year was around $10,500 and I had about $9,800 withheld while he had his measly $46. We ended up owing, but it wasn't too bad since I had extra withheld from my checks. Do you know if there's a penalty for underwithholding even if you pay everything you owe by April 15th?

Yes, there can still be a penalty even if you pay everything by April 15th. It's called an "underpayment penalty" and the IRS expects you to pay your taxes throughout the year, not just at filing time. The general rule is that you need to have paid at least 90% of this year's tax liability OR 100% of last year's tax liability (110% if your income is over $150,000) through withholding or estimated quarterly payments to avoid the penalty. So if you're significantly underwithholding, you could face penalties even if you pay the full amount when you file.

This is exactly what happened to my coworker! He thought the form was asking for how many people were in his extended family, so he put 12 (counting parents, siblings, etc.). His first paycheck had like $3 in federal withholding and payroll had to explain the mistake.

I hadn't considered that my ex's family might have filed our taxes incorrectly in previous years. That's a really good point and makes a lot of sense with the Form 8862 requirement. I'm going to request my transcripts right away to check for any patterns. I'm also wondering if I should reach out to my ex about this since these were joint returns and any liability might affect both of us? Or is it better to just handle this on my own since we're no longer together?

If you filed joint returns with your ex-spouse during your marriage, you're both potentially liable for any issues on those returns. This concept is called "joint and several liability." However, there are provisions like Innocent Spouse Relief that might help if you can demonstrate you had no knowledge of errors your spouse or their family made. Regarding communication with your ex, it's generally a good idea to keep them informed since this could potentially impact them too. However, I'd suggest consulting with a tax professional before making any decisions about how to approach the IRS about joint returns. There are strategic considerations that might affect both of you, and you want to make sure you're protecting yourself first while being fair.

This is so true! The IRS made a mistake on my return saying I didn't report income but it was clearly on Schedule C instead of where they were looking for it. They tried to hit me with an extra $7k in taxes! Always check their work carefully.

No way! I paper filed in February and I'm STILL waiting for my refund. The IRS is a disaster right now. E-file if you possibly can.

Do you know roughly what CPAs are charging for a return with Form 8915-e? I'm trying to decide if it's worth it vs waiting for my regular software to update.

I hadn't heard of this program. Would this still apply even though he passed away? And how did you handle estimating income when there were no clear records?

Yes, it still applies for deceased taxpayers when the estate representative initiates the disclosure. The program essentially acknowledges that you're coming forward voluntarily before any IRS enforcement action. For estimating income, we used industry standard profit margins for his type of business, looked at his living expenses and assets acquired during those years, and made reasonable estimates. We documented our methodology carefully and explained the cash-only nature of his business. The IRS was actually surprisingly reasonable once they understood we were making a good faith effort. For some years, we used Form 8275 (Disclosure Statement) to explain our estimation methods. The key was being transparent about how we arrived at the figures rather than just putting random numbers.

He did own his house - bought it in the late 90s and paid it off around 2003 according to what he told me. But I can't find any mortgage paperwork. That's a good idea about property records though, I should check with the county assessor's office to see what they have. That might at least give me some baseline for what he was earning back when he qualified for the mortgage.