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Quick answers to common tax questions

Start here for practical next steps, then use the linked guide for the details.

I received an IRS letter. What should I do?

Read the entire notice and note the response deadline. Keep a copy and contact the preparer promptly. Verify unexpected requests through IRS.gov. Collection or levy notices may need a qualified representative.

Does a filing extension delay payment?

Generally, no. An extension gives additional time to file, not additional time to pay. Estimate and pay by the applicable payment deadline.

Do I report income without a 1099?

Income may still be reportable even when no form is issued. The payer’s information-reporting threshold does not determine whether your income is taxable.

Do I need estimated tax payments?

You may need them when withholding does not cover enough of your tax. The calculation considers expected tax, prior-year tax, income timing and applicable exceptions.

Is an LLC the same as an S-Corp?

No. An LLC is a state-law entity; S-Corp treatment is a tax election. An eligible LLC can elect it, but the added costs and requirements must be evaluated.

Can I deduct a home office?

Eligibility depends on business use, the taxpayer’s status and the applicable rules. Regular and exclusive use is generally important. Owner-employees of S corporations use a different approach from a Schedule C business.

How long should I keep records?

Retention depends on the type of record and circumstances. Use the record-retention guide rather than applying one rule to every document.

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Related guidance

How long to keep tax and business records

Keep records long enough to support the return, prove asset basis and satisfy employment, legal and contractual requirements. There is no single retention period for every document.

IRS notice review and response

For a return KDM prepared, we can review routine IRS correspondence and identify the next step. Send the complete notice promptly and follow the deadline printed on it.

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§ FAQ

Questions we hear about quick tax answers.

How long do I need to keep my tax records?

Keep copies of filed returns as a reference. Supporting documents like W-2s, 1099s and receipts generally need to be kept for 3 years from the date you filed; 4 years for employment tax records; 6 years if income was substantially underreported; 7 years if you claim a bad-debt or worthless-securities deduction; and indefinitely if no return was filed. Keep property basis records until the period of limitations closes for the year you dispose of the property. Check the record-retention guide before you throw anything out.

I got a letter from the IRS. What should I do?

Do not ignore it, and do not call the IRS before talking to your tax preparer. Most IRS letters are routine requests for information, but a few require fast, specific action. Bring in the letter or call so someone can tell you exactly what it means and what to do next.

Should I file a tax extension?

If you cannot file by April 15, yes. Filing Form 4868 extends your filing deadline to October 15. Remember that an extension only extends the time to file, not the time to pay, so if you owe tax you still need to pay by April 15 to avoid penalties and interest on the unpaid balance.

Do I have to report side gig income if I did not get a 1099?

Yes. Self-employment income is reportable whether or not you received a 1099. The 1099 reporting threshold ($2,000 for payments made in 2026; $600 for 2025 and earlier) is about the payer's reporting obligation, not yours. Net self-employment income over $400 also triggers self-employment tax.

Should I form an LLC or an S-Corp?

It depends on your income and goals. An LLC taxed by default is simpler but pays self-employment tax on all profit, while an S-Corp can reduce self-employment tax but requires payroll and added formalities. There is no universal income threshold. We model your profit, a supportable salary, and the added payroll and filing costs before recommending an election. That analysis is part of a new business formation engagement.
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