This thread has been incredibly informative! I'm also doing tax loss harvesting for the first time this year and had the exact same confusion about the December 31 deadline. One additional consideration I learned from my research: if you're planning to harvest losses but also want to maintain exposure to the market, you might want to consider using the proceeds to immediately buy a similar (but not substantially identical) investment to avoid missing out on potential gains while staying compliant with wash sale rules. For example, if you're selling an individual stock at a loss, you could use those proceeds to buy a broad market ETF, or if you're selling a large-cap growth fund, you might switch to a total market fund temporarily. Just make sure to wait the full 31 days before buying back the original position if you want to avoid wash sale treatment. Thanks everyone for confirming the December 31 trade date rule - that removes a lot of uncertainty from my year-end planning!

This has been such a valuable discussion! As someone who's been putting off tax loss harvesting because I was confused about the timing, you've all given me the confidence to finally execute my strategy. Just to summarize what I've learned for anyone else who might be reading this: - December 31st is the absolute deadline (trade date, not settlement date) - After-hours trades on 12/31 still count for the current tax year - Watch out for wash sale rules (30 days before/after) - Keep good documentation, especially for last-minute trades - Consider the order of trades (losses first, then gains) - Be mindful of mutual fund distribution dates I'm planning to sell my underperforming positions this week to avoid any last-minute stress, but it's reassuring to know I have until December 31st if needed. The tools mentioned (taxr.ai for analysis and Claimyr for IRS questions) also sound like they could be really helpful resources. Thanks everyone for sharing your experiences and expertise - this community is amazing!

Has anyone here successfully claimed a refund for Social Security taxes that were incorrectly withheld during their first two years on a J1? My university withheld FICA taxes from my first paycheck in 2023 all the way through 2024, and I only recently learned I shouldn't have been paying these taxes during that time. I've heard you can file Form 843 "Claim for Refund and Request for Abatement" along with a statement from your employer, but I'm wondering if anyone has actually gone through this process successfully.

I went through this exact same situation last year! I'm a J1 research scholar from India, and my university started withholding Social Security taxes in January 2024 after I had been exempt for my first two calendar years (2022-2023). What really helped me understand the timing was learning that the IRS counts any part of a calendar year as a full year for the exemption. So even though you only arrived in September 2023, that counts as your first year, 2024 as your second, and now 2025 is when the exemption ends. One thing to double-check is whether India and the US have a totalization agreement that might affect your situation. India doesn't have one with the US, so I definitely had to start paying once my exemption period ended. But since you mentioned you're from Brazil, and I saw in the comments that Brazil does have a totalization agreement, you might want to look into whether you can get a certificate of coverage from Brazilian social security authorities. Also, make sure your university is correctly calculating this. Some payroll departments make mistakes with international employees. I'd recommend getting a written explanation from them about why they're starting the withholding now, just to have it documented.

This thread has been incredibly educational! As someone who's been putting off consolidating my HSAs because I was worried about the process, reading everyone's real experiences has given me the confidence to finally move forward. Just to recap the key points I've gathered for anyone else in a similar situation: 1. **Never use regular bank transfers** - this will be treated as a taxable distribution with penalties 2. **Trustee-to-trustee transfer is the safest option** - no tax reporting required and no limits on frequency 3. **Call both banks directly** for their specific forms - don't rely on online versions 4. **Ask about fees, minimum balances, and timing** when you call 5. **Pause automatic contributions** during the transfer process 6. **Keep the old account open** until you confirm the transfer completed successfully The consensus seems to be that this process takes 7-10 business days and ranges from free to about $25 in fees. Most importantly, when done correctly as a trustee-to-trustee transfer, there's nothing to report on your taxes. Thanks to everyone who shared their experiences - both the successes and the cautionary tales. This is exactly the kind of real-world guidance that makes all the difference when navigating these financial processes!

This thread has been absolutely invaluable! I'm in exactly the same situation as Jade with HSAs at two different banks, and I was literally about to use the online transfer feature before reading all of this. You all just saved me from what could have been a very expensive mistake! I had no idea there was such a critical difference between a regular bank transfer and a trustee-to-trustee transfer. The fact that one method is completely tax-free while the other triggers a 20% penalty plus income tax is mind-blowing. It really shows how important it is to understand the specific rules around tax-advantaged accounts like HSAs. The real-world experiences from Emma, Arnav, and others are so helpful - especially the practical details like fees, timing, and things to watch out for like minimum balances and pausing automatic contributions. These are the kinds of details you just don't get from official bank websites or generic financial advice articles. I'm going to follow the roadmap outlined here: call both banks tomorrow to get the trustee-to-trustee transfer forms, ask specifically about their requirements and timelines, and make sure to pause my payroll deductions until everything is completed. Thanks to everyone who contributed to this discussion - this community is amazing for sharing real experiences and looking out for each other!

This is a really complex situation that many business owners face. One thing I haven't seen mentioned yet is that you should also consider the possibility that your subcontractor might be an undocumented worker who doesn't have a valid SSN but still needs to work. In that case, they might be eligible for an Individual Taxpayer Identification Number (ITIN) instead. You could suggest they apply for an ITIN if they don't have a valid SSN - this would allow them to pay taxes legally while still working with you. The IRS Form W-7 is used to apply for an ITIN, and it's specifically designed for people who need to file tax returns but aren't eligible for an SSN. That said, if they're deliberately trying to avoid taxes entirely and refuse to provide any legitimate tax ID, then you definitely need to protect yourself. The backup withholding route mentioned by others is probably your safest bet for future payments. For the $9,700 already paid, definitely keep detailed records of all your attempts to get correct documentation - this shows good faith effort if the IRS ever questions it. Have you tried explaining to your subcontractor that providing false information on a W-9 is actually a federal crime? Sometimes people don't realize the serious legal consequences and might be more willing to cooperate once they understand the risks.

I've been in a similar situation and it's definitely stressful. One thing to keep in mind is that the IRS has specific procedures for when you receive a CP2100 or CP2100A notice (which happens when the name/TIN combination you reported doesn't match their records). If you file the 1099 with the information from the W-9 and it doesn't match IRS records, you'll get one of these notices. At that point, you're required to contact your contractor to get corrected information. If they don't provide it within 30 days, you must start backup withholding on future payments. For the $9,700 already paid, you'll likely need to file the 1099 anyway since the IRS expects reporting for payments over $600. Just make sure you document your efforts to obtain correct information. The key is showing you acted in good faith - save all emails, texts, or written requests you've made for proper documentation. One other consideration: some contractors legitimately don't know the difference between their SSN and an ITIN, or they might have a pending ITIN application. It's worth having a direct conversation about what specific tax identification they actually have before assuming malicious intent.

For the actual numbers - I have a service business in a different field (legal consulting) that's about your size. My CPA had me do a compensation study showing average salaries for people in our field. Based on my study, I pay myself $700k salary on about $3.5M net. My wife is officially our CFO with a $250k salary for 30 hours/week. We documented both with formal job descriptions, board minutes approving the compensation, and market research showing comparable positions. Haven't had any issues with IRS in 6 years.

With $3.9M net profit, your $500k salary is definitely on the low side and could trigger IRS scrutiny. Most tax professionals recommend 40-60% of net profit as wages for service-based S Corps where the owner is the primary value generator. A few key concerns with your situation: 1) **Salary ratio**: At ~13% of net profit, you're well below what the IRS typically expects for a consulting business. Consider bumping to at least $1.5-2M to be safer. 2) **Family client concentration**: 90% revenue from your cousin's company creates additional risk. The IRS might view this as disguised employment or income shifting between family members. Document everything - contracts, deliverables, market-rate justification. 3) **Wife's compensation**: $325k for 25 hours/week needs very strong justification. That's equivalent to a $650k full-time salary, which is a huge jump from her $40/hr independent rate. Consider something closer to $120-150k unless she has executive-level responsibilities that truly command those rates. The family connections will definitely draw extra attention if audited, so documentation is crucial. I'd recommend getting a formal compensation study done and having written job descriptions for both positions.