Can you explain what a "qualifying or disqualifying disposition" means? The tax document they sent me does mention something about a "disqualifying disposition" but doesn't explain what that means.

A qualifying disposition means you held the ESPP shares for both: 1) at least 1 year after the purchase date, and 2) at least 2 years after the offering date (when the purchase period began). If you meet both holding periods, you get more favorable tax treatment. A disqualifying disposition means you sold before meeting either of those holding periods. In that case, the entire discount gets taxed as ordinary income. It's strange they're mentioning "disqualifying disposition" if you haven't sold yet. That term typically only applies when you actually sell the shares. This reinforces my suspicion that there's a communication problem or misunderstanding with your benefits department. I'd specifically ask them why they're referencing a disqualifying disposition when you still hold the shares.

This is an excellent point. My company does something similar - they provide an optional tax withholding program for equity compensation. They calculate the projected tax impact and let us choose whether to have extra withholding throughout the year. It's actually really helpful for cash flow management.

All the rent payments came directly from my personal checking account. My fiance and I keep our finances completely separate for now - they pay for utilities and groceries, I cover the rent. So there's a clear paper trail that I'm the only one who paid rent. I hear what you're saying about it maybe not being worth fighting since we're getting married soon, but we're filing separately this year and potentially leaving several hundred dollars on the table with this incorrect CRP. My state has a pretty generous rent credit program.

In that case, you definitely have solid grounds to get this corrected. Since you have a clear paper trail showing you made 100% of the payments from your personal account, the CRP should reflect that. Several hundred dollars is absolutely worth pursuing. I'd recommend following the advice others have given about submitting a dispute. Make sure to include bank statements showing the payments came from your account, and be persistent with your landlord - they should want to avoid potential issues with the tax authorities by providing accurate documentation.

Minnesota resident here - your landlord is not correct. The MN Department of Revenue is very clear that CRPs should reflect who actually paid the rent, not just who was on the lease. I had this issue two years ago and ended up calling the MN DOR directly. They told me to file Form M-1PR with an explanation and my payment proof. Got my full refund about 6 weeks later.

I've heard about the S-Corp option but wasn't sure if my income was high enough to make it worth the extra paperwork and accounting costs. What's considered the breakeven point where it starts making sense financially?

The breakeven point varies depending on your specific situation and local costs, but generally around $40,000-60,000 in profit is where many tax professionals suggest considering it. At your $52,500 income level, you're in that range. The main calculation is comparing what you'll save in self-employment taxes versus the additional costs. You'll need to file Form 1120-S annually, likely pay for payroll services (roughly $50-100/month), and possibly higher accountant fees. Most people find it worthwhile when they can save at least $2,000 annually in taxes after covering these extra expenses.

The QBI deduction is amazing but gets complicated fast. I thought I didn't qualify but my tax person found a way to make it work by adjusting some of my expense categories. Ended up saving almost $2k last year!

How do you prove something was a personal item vs inventory if you get audited though? I sell a mix of both and don't keep great records.

This is definitely a tricky area. For personal items, having original receipts or some documentation of what you initially paid would be ideal, but I know that's not always realistic. What I do now is keep a simple spreadsheet where I note which items are from my personal collection (with approximate purchase date and estimated original cost) versus items I bought specifically to resell. I also take photos of all personal items before listing them, which shows they were used. For business inventory, I keep all receipts and store them separately. Even basic documentation like this can help support your case if questions ever come up.

My accountant said some payment platforms might still send them at $600 because their systems were already updated for that threshold before the IRS made the change. He said to just keep good records either way.

Thanks for mentioning this! My dad does have a small IRA from a job he had in his 50s. It's not huge (maybe $45K) but this QCD thing sounds interesting. Does it matter which charity he donates to? And how does this actually help with taxes compared to just withdrawing the money and then donating it himself?

Any 501(c)(3) qualified charity works for QCDs. The main advantage is that the distribution never shows up as income on his tax return at all. If he withdrew the money first and then donated, he'd report the withdrawal as income and then take a deduction for the donation, which isn't as advantageous. With a QCD, it doesn't increase his Adjusted Gross Income, which means it won't affect taxation of his Social Security benefits or any income-based Medicare premiums. It also works even if he doesn't itemize deductions (which most retirees don't after the standard deduction increase). The custodian of his IRA can help set this up - it's a pretty common request these days.

I did this last year with my mom! The premiums went up but not as much as paying for a separate policy. Tax-wise, the added premium amount for dependents isn't typically tax-deductible through an employer plan unless you're self-employed. But the overall savings were still worth it for us since my company subsidizes dependent coverage.