If u make under $12,950 in 2024, u might not even need to file a return at all if ur a dependent. But u should still file anyway to get any witholding back! And track all ur expenses, art supplies, software, part of ur internet bill, etc.

Great thread! As someone who went through this exact situation a few years ago, I wanted to add a few things that really helped me when I was starting out as a freelance digital artist. First, definitely set up a separate bank account for your business income and expenses if you haven't already. It makes tracking everything so much easier come tax time, and the IRS loves clean records if you ever get audited. Second, don't forget about state income tax requirements! Even though your state doesn't charge sales tax on digital goods, you'll still likely owe state income tax on your freelance earnings. Each state has different thresholds and rules. Also, since you're tracking everything in a spreadsheet already, consider categorizing your expenses more specifically - things like "software subscriptions," "equipment," "professional development," etc. This will make filling out Schedule C much smoother and help you spot deduction opportunities you might miss otherwise. One last tip: if you end up owing more than $1,000 in taxes when you file, you'll definitely want to start making those quarterly estimated payments for next year to avoid penalties. The IRS doesn't like waiting until April to get their money! You're being really smart about getting ahead of this. Most freelancers I know (myself included) learned this stuff the hard way after making mistakes.

I'm dealing with a similar situation and want to add one important point that might help. When you defer 100% of your S-Corp salary to a Solo 401k, make sure you're also considering the impact on your personal tax situation. Even though Box 1 on your W-2 will show $0, you'll still want to verify that you have enough withholding or estimated tax payments to cover any other income sources. Also, double-check that your Solo 401k provider can handle employer contributions properly. The $5,250 match you mentioned should be deposited separately from your salary deferrals, and some providers have specific procedures for this. I learned this the hard way when my initial provider couldn't process the employer match correctly for my S-Corp setup. One last thing - keep detailed records of your reasonable salary determination. Even though you deferred it all, the IRS may still want to see documentation of how you arrived at the $21,000 figure in case they ever question whether it's truly reasonable for your type of business and time commitment.

This is a great question and you're definitely on the right track! I went through something very similar with my S-Corp last year. You're correct that Box 1 should show $0 since you deferred your entire salary, and the $21,000 goes in Box 12 with code D. However, here's the critical part that trips up many S-Corp owners: you still owe FICA taxes on the full $21,000 even though it was deferred to your 401k. This means Boxes 3 and 5 on your W-2 should show the full $21,000 for Social Security and Medicare wages. If you haven't been making quarterly payments for these taxes throughout the year, you'll need to catch up now - that's about $3,206 total (15.3% of $21,000) split between employer and employee portions. Also, make sure your Solo 401k was properly established with all required documentation before you made the deferrals. The employer match doesn't appear on your W-2 since it's not considered wages, but it should be deposited separately into your 401k account. For your 1120S, the salary expense and employer portion of FICA taxes are deductible business expenses. Don't forget to file Form 941 for the quarterly payroll taxes even if you're catching up late - there may be penalties, but it's better to file than not file at all.

Great question! This is definitely a complex situation that many couples face. Based on what you've described, here are the key points to consider: **Mid-year switching is possible but requires specific conditions:** 1. Your wife starting a new job IS a qualifying life event that allows mid-year benefit changes 2. Your employer must allow FSA modifications for qualifying events (not all do) 3. You'd need to either cancel your FSA entirely or switch to a limited-purpose FSA (dental/vision only) **Important timing considerations:** - If you switch mid-year, your HSA contribution limit will be prorated based on eligible months - Any unused FSA funds might be at risk depending on your plan's rules - Your wife's employer HSA contributions count toward the annual limit **My recommendation:** Contact your HR department immediately to ask about: 1. Whether they allow FSA cancellation/modification for qualifying events 2. If they offer limited-purpose FSA as an option 3. What happens to your current FSA balance if you make changes The cleanest approach might be waiting until your next open enrollment period to decline the FSA and switch to your wife's HDHP/HSA plan, but you'd miss out on her employer contributions in the meantime. Get everything in writing from HR - these rules can be confusing even for benefits administrators!

I went through this exact same situation two years ago and wanted to share what worked for us. My husband had a healthcare FSA through his employer, and I got a new job with an HDHP and HSA match. The key was understanding that my new job qualified as a "qualifying life event" under IRS rules, which allowed us to make mid-year changes to our benefits. However, we had to act quickly - most employers only give you 30 days from the qualifying event to make changes. Here's what we did: 1. I contacted my husband's HR immediately to ask about switching from full healthcare FSA to limited-purpose FSA 2. We had to provide documentation of my new job offer and HDHP enrollment 3. His employer allowed the change, and we switched to limited-purpose FSA effective the month I started my new job The limited-purpose FSA only covers dental and vision expenses, which made us HSA-eligible for medical expenses. We were able to keep our existing FSA balance for dental/vision and start contributing to the HSA for medical expenses. One thing to watch out for - make sure you understand your current FSA's "use it or lose it" rules. Some plans have a grace period or allow a small rollover, but others don't. We ended up scheduling some overdue dental work to use up our FSA balance before the year ended. The timing aspect is crucial - don't wait to contact HR about this!

Ive been an IC for 15 years and the rule ive always followed is: if its something you would buy anyway (food, coffee, etc) its not deductible. if its something you ONLY buy because of work, it probably is deductible. So your personal coffee is definitley not deductible but i do deduct coffee/snacks I buy for clients during meetings.

As a newer IC, this thread has been super helpful! I've been overthinking a lot of these expenses. The distinction everyone's making between personal consumption vs. business necessity really clarifies things. I think I was trying to justify too many personal expenses as "business-related" just because I happened to be working at the time. The rule about "would you buy this anyway even if you weren't working" is going to save me from a lot of potential audit headaches. Thanks for all the practical advice!

Just wanted to share my recent experience since I literally just went through this exact situation! I filed my missing 2023 return in early February and was stressed about the timeline too. Here's what happened: My 2023 return was processed after exactly 7 weeks (I could see it on my transcript), and then I e-filed my 2024 return the next day. The 2024 return processed in 19 days, so total timeline was about 9 weeks from start to finish. One thing that really helped was setting up an online IRS account so I could check my tax transcript directly instead of relying on "Where's My Refund" which doesn't always update promptly. The transcript will show a 150 code when your prior year return is fully processed - that's your green light to file the current year. Also, if you're really tight on finances and need to plan precisely, consider that the IRS typically releases refunds on Wednesdays and Fridays, so even if your 21-day processing period ends on a Monday, you might not see the deposit until Wednesday. Just something to factor into your timeline!

I'm currently in week 4 of waiting for my 2022 return to process, so this thread is incredibly timely for me! Based on everyone's experiences here, it sounds like I should expect another 2-4 weeks before I can safely e-file my 2024 return. One question I haven't seen addressed - has anyone had issues with their bank rejecting the direct deposit because of the long gap between filing and receiving the refund? I'm worried my bank might flag an IRS deposit coming in 2+ months after I filed my current year return as suspicious. Should I give them a heads up, or is this a non-issue? Also, @Maxwell St. Laurent, thank you for mentioning the transcript 150 code - I've been obsessively checking "Where's My Refund" but will switch to monitoring my transcript instead since that seems more reliable for tracking when the prior year is actually processed.