I'm surprised nobody mentioned quarterly estimated taxes yet! If you're making money from self-employment, you might need to make quarterly tax payments to avoid penalties. The IRS expects you to pay taxes throughout the year, not just at filing time.

As someone who went through this exact situation a few years ago, I can share what worked for me. First, yes you do need to report this income since you're over the $400 threshold for self-employment. But don't stress too much about the bank deposits - for amounts under $10k, they typically won't question where the cash came from. Here's what I wish someone had told me: start keeping better records NOW. Create a simple spreadsheet with dates, jobs, and payments. Also track your expenses like gas, equipment, supplies - these deductions can significantly reduce what you owe. I ended up saving about $400 in taxes just by deducting my lawn mower, gas, and maintenance costs. For filing, you'll use Schedule C and Schedule SE along with Form 1040. The self-employment tax is about 15.3%, but you might not owe income tax depending on your total income. Since your parents claim you as a dependent, you still need to file your own return. Consider it good practice for adult life! Most tax software can handle this situation, or you might want to have your parents help you through it the first time.

This has been such an eye-opening discussion! I'm in a very similar boat - making about $85k and consistently getting $2,800-3,200 refunds each year. I never really thought about it as giving the government an interest-free loan until reading through these comments. I'm definitely going to try the approach of putting the standard deduction amount ($14,600 for 2024) in Step 4(b) of my W-4. That seems like the most straightforward solution for someone like me with a single job and no itemized deductions. Quick question for the group - if I make this change now in late 2024, will it cause any issues with my withholding being too low for the remainder of the year? Should I calculate a prorated amount based on remaining pay periods, or is it safe to use the full annual standard deduction amount even if I'm making the change partway through the year? Thanks to everyone for sharing their experiences - this community is incredibly helpful for navigating these tax complexities!

This thread has been incredibly helpful! I'm dealing with a similar overwithholding situation - making about $102k and getting back around $4,200 each year. One thing I wanted to add for anyone considering these adjustments: make sure to factor in any life changes that might happen during the year. I made the mistake last year of adjusting my withholding in March, then got married in September and completely forgot to update my W-4 again. Even though my spouse and I file separately, the change in filing status affected my tax situation. Also, for those mentioning the IRS Withholding Estimator - I found it works much better if you have your most recent pay stub and last year's tax return handy when you use it. The tool asks for pretty specific information about year-to-date earnings and withholdings. One last tip: if your employer uses a payroll service like ADP or Paychex, you can often submit W-4 changes online through their employee portal, which tends to process faster than paper forms through HR.

Another option to consider is filing separately from your spouse. If your spouse has significant income but few deductions, while you have business losses or lots of deductions, filing separately might help. But be careful! Filing separately has drawbacks like losing certain tax credits.

As someone who went through this exact same confusion when I first became self-employed, I can tell you it gets much clearer once you understand the flow. Here's the simple breakdown: 1. First, calculate your business profit on Schedule C: $135,000 revenue - $120,000 business expenses = $15,000 net business income 2. Then, on your main tax return (1040), you'll have that $15,000 as self-employment income plus any other income you and your wife have 3. Finally, you choose standard deduction ($27,700) vs itemized deductions. Since $15,000 - $27,700 = $0 taxable income, standard deduction wins unless you have huge personal deductions One important thing others mentioned: you'll still owe self-employment tax on that $15,000 (about $2,120), but your income tax would be $0. Don't overthink it - business expenses and personal deductions are completely separate things in the tax system. Your business expenses always get deducted first on Schedule C, then you decide standard vs itemized for personal stuff.

Something I haven't seen mentioned yet is the impact of Net Investment Income Tax (NIIT) on your decision. As a single filer, you'll pay the 3.8% NIIT on investment income once your modified AGI exceeds $200,000. This applies to pass-through income from an LLC but NOT to income retained within a C Corp. Given that you're already in the 22% bracket and expecting to move to 24%, you're likely approaching or exceeding the NIIT threshold. This means your effective rate on LLC pass-through income could be 24% + 3.8% = 27.8%, making the 21% corporate rate even more attractive. However, you still need to factor in the eventual double taxation when you take distributions. If you're truly planning to reinvest profits for years, the C Corp structure might make sense despite the accumulated earnings tax concerns. Just make sure you have a clear business purpose for the retained earnings and document it well. Another consideration: C Corps can carry forward capital losses indefinitely, while individual taxpayers are limited to $3,000 per year in capital loss deductions. If you're doing active trading, this could be significant.

Building on the excellent points about NIIT and loss carryforwards, there's another angle worth considering: the potential for C Corp tax rate changes. While the current 21% rate is attractive, corporate tax rates have historically been more volatile than individual rates. If you're planning a long-term strategy of retaining earnings in the corporation, you're essentially betting that corporate rates will remain favorable. Also, don't overlook the practical complexity of operating a C Corp for investment activities. You'll need separate books and records, potential quarterly estimated tax payments at the corporate level, and annual corporate tax returns (Form 1120). The compliance costs can add up quickly - typically $2,000-5,000 annually in professional fees depending on your activity level and complexity. One hybrid approach I've seen work well for some traders is starting with an LLC structure to keep things simple initially, then converting to C Corp status once the investment activity and profits reach a level where the tax benefits clearly outweigh the additional complexity and costs. The conversion can be done tax-free under certain circumstances, giving you flexibility to adapt as your situation evolves. Have you calculated the break-even point where the C Corp tax savings would exceed the additional compliance and operational costs?

Emma, based on everything discussed in this thread, December seems like the clear winner for your situation! With you earning $16K more than your partner would have made, plus having kids, you're looking at potentially $2,500-$3,200 in tax savings by filing jointly vs. your current head of household status. A few practical next steps I'd suggest: 1. **Run the numbers yourself** - Try the IRS Interactive Tax Assistant tool mentioned by Amina, or one of the tax comparison tools others have recommended. This will give you concrete numbers for your specific situation. 2. **Don't forget the timing advantage** - Getting married in December means you'll receive that tax refund in early 2025 instead of waiting until 2026. With a stay-at-home parent situation, having that extra cash flow sooner could be really valuable. 3. **Plan for withholding changes** - As Josef and others mentioned, update your W-4 immediately after marriage! Since you returned to work recently, your current withholdings are probably set for single status, and marriage will change that calculation. 4. **Check state taxes** - If you're in a state with income tax, make sure to factor that in too. Some states treat married couples differently than the federal system. The December wedding looks like a smart financial move, plus you get to start your married life together sooner. Congratulations and best of luck with whatever you decide!

This has been such an incredibly helpful discussion! As someone who works in financial planning, I wanted to add one more consideration that might be relevant for your situation, Emma. Since you mentioned returning to work just 2 months ago after your partner became a stay-at-home parent, you might want to look into the Dependent Care FSA (Flexible Spending Account) for next year if your employer offers it. If you get married in December 2024, you'll be filing jointly for the 2024 tax year, but you can also plan your 2025 benefits enrollment as a married couple. The Dependent Care FSA allows you to set aside up to $5,000 per year (for married filing jointly) in pre-tax dollars specifically for childcare expenses. Since you have kids and might need occasional childcare even with a stay-at-home parent (date nights, appointments, etc.), this could provide additional tax savings on top of the marriage benefits everyone else has calculated. Also, if your employer offers dependent health insurance coverage, getting married in December means your partner and kids could potentially be added to your plan during the next open enrollment period, which might be more cost-effective than separate coverage. Between the immediate tax savings, earlier refund timing, and potential benefits planning advantages, December really does seem to align with your goal of making the smartest financial choice. Best wishes for your upcoming wedding!