Taxing Matters really hit the nail on the head of much of the info I was given today by a tax professional I hired. I'll give the bullet points of all the info and we'll go from there:
- The good news is she was able to find a few other home office deductions on things like utilities and various job-related items in my amended return, which did drop it down another $1,100. So the new federal total is right around $8,700
- The bad news is she also processed my local and found out I owed them over $1,000 which I had not accounted for, so that savings went out the window unfortunately
- She said being an independent contractor is one of the negative side effects she sees due to the bad economy. If I were to get a job that is W-2 based, that would cut my burden down drastically. But right now, my employer is forcing me to fit the entire FICA bill
- She also advised me about getting the quarterly payments made, which she says is a shock to most first time contractors like myself who are never told by their employer or anyone about the huge financial burden we're about to undertake. This really should be part of some sort of high school or college course where they warn people about the dangers of working for yourself
- She also mentioned the OIC, but told me something crazy about. She said I'd have to send in a payment with the application blindly without any notion of whether they will accept it or not. If they don't, they just keep the money. if that's true, that is some crazy mafia stuff going on with the IRS right there!
So my only recourse now it to contact the IRS and see what my options are. If the OIC doesn't work out, is there any legal help or financial assistance I can seek outside the IRS? I own this mistake, but I don't think anyone would deny that jumping from a $450 payment last year to $10,000 is reasonable by any standards. I mean, I'm willing to keep up with it moving forward and do what I have to do, but that past debt it what's killing us.