Great discussion here! I'm dealing with a similar situation from a strike I participated in last fall. One thing I want to add for anyone else reading this - make sure to keep good records of exactly when you received your strike pay versus your regular wages. In my case, the strike crossed over from December into January, so some of my strike pay will be reported on this year's taxes even though the strike started last year. The 1099-MISC shows the total amount paid in the tax year, not when the strike actually occurred. Also, if you received any strike benefits in addition to strike pay (like help with utilities or groceries from the union), those might be handled differently for tax purposes. My union provided some emergency assistance during the strike, and I'm still trying to figure out if that needs to be reported as income too. The advice about setting aside 15-25% for taxes is spot on - I learned that the hard way when I got hit with a bigger tax bill than expected!

This is such a helpful thread! I'm a tax preparer and wanted to add a few clarifications for anyone else dealing with strike pay: 1. **Quarterly estimated taxes**: If you expect to receive strike pay again or have other income without withholding, consider making quarterly estimated tax payments to avoid underpayment penalties next year. 2. **State variations**: Each state handles strike pay differently. Some states don't tax it at all, while others treat it the same as federal (regular income tax but no employment taxes). Check your state's specific rules. 3. **Documentation**: Keep all your strike-related paperwork together - the 1099-MISC, any correspondence from your union, and records of when you were on strike versus working. This helps if the IRS has questions later. 4. **Multiple unions**: If you received strike pay from multiple unions or participated in strikes with different locals, you might receive multiple 1099-MISC forms. Each one gets reported separately, but they all go in the same "Other Income" category. The advice given here about Schedule 1, Line 8z is absolutely correct. Just remember that "Other Income" is still fully taxable at your regular income tax rates - it's just not subject to Social Security and Medicare taxes like regular wages would be.

Another thing to consider is that since you're earning substantial income from findom, you might want to look into forming an LLC for liability protection and potential tax benefits. While it's not required for filing taxes, an LLC can help separate your personal assets from your business activities and might provide some additional legitimacy if you're ever questioned about the nature of your business. Also, I'd strongly recommend getting professional liability insurance if you decide to treat this as a serious business. Some insurers offer coverage specifically for online service providers. It's relatively inexpensive and can protect you if any legal issues arise from your business activities. One more practical tip - start using a business calendar or scheduling app to track your work hours and client interactions. The IRS likes to see that you're operating like a real business, and having documented business activities can help support your Schedule C filing. Plus it helps you track which expenses are truly business-related vs personal. Finally, consider setting up a simple bookkeeping system now rather than scrambling next tax season. Even something basic like QuickBooks Self-Employed or a detailed Excel spreadsheet can save you tons of headaches later. The key is consistency - record everything as it happens rather than trying to reconstruct months of transactions later.

I really appreciate everyone sharing their experiences here! As someone who's been doing bookkeeping for small businesses for years, I can confirm that findom income definitely needs to be reported as self-employment income on Schedule C. One thing I'd emphasize that hasn't been fully covered is documentation strategy. Since payment apps don't always provide the best records for tax purposes, I recommend creating a simple monthly summary sheet that includes: date received, amount, payment method, and client identifier (doesn't have to be real names, just consistent codes like "Client A", "Client B"). This makes it much easier to cross-reference with your bank statements and payment app records. Also, regarding business expenses - don't forget about things like phone accessories (ring lights, tripods), any software subscriptions you use for editing or communication, and even a portion of your rent if you have a dedicated space you use exclusively for this work (home office deduction). Just make sure you can justify the business purpose for everything you deduct. The quarterly payment advice is spot on. Since you're past the January 15th deadline for Q4 2023, focus on getting your 2023 taxes filed correctly and start making estimated payments for 2024. The Form 1040ES has worksheets that help you calculate the right amount based on your expected income.

This is such a great question! I went through the exact same confusion when I started trying to understand my paychecks better. One thing that really helped me was realizing that withholding tables also have to account for the timing of when you get paid. If you're paid weekly, the system has to estimate your annual income based on just one week's pay, then figure out how much to withhold from that single check to cover your whole year's taxes. It's kind of like if someone asked you to guess how much you'll spend on groceries for the entire year based on just one shopping trip - you'd have to make a lot of assumptions! The withholding system has to make similar assumptions about your total income, deductions, and tax situation. The good news is that it all gets sorted out when you file your return. The withholding is just meant to get you in the ballpark, not be perfect. That's why most people either get a refund or owe a little bit - it's really hard for the system to get it exactly right with limited information.

Great question about reviewing W-4s! As someone who's been through this learning curve too, I'd suggest checking your withholding at least once a year, ideally around tax time when you can see how close you were to breaking even. But definitely review it whenever you have major life changes - new job, marriage, divorce, having kids, buying a house, or significant changes in income. Even smaller changes like getting a raise or losing a side gig can throw off your withholding enough to matter. I also like to do a mid-year check around June or July. By then you have enough pay stubs to see if you're on track, and there's still time to adjust for the rest of the year if needed. The IRS withholding calculator mentioned earlier is perfect for this - you can plug in your YTD numbers and see if you need to tweak anything. One tip I learned the hard way: if you're consistently getting huge refunds (like over $1000), you're probably overwithholding and giving the government an interest-free loan. But if you consistently owe money, you might want to increase your withholding to avoid penalties. The sweet spot is owing or getting back less than $500.

Something to consider - if your daughter is primarily saving for college, having those FICA taxes withheld might actually be better in the long run. My daughter had a similar situation and we learned that having documented Social Security contributions, even small ones during high school, can help establish her work history for future Social Security benefits.

Just wanted to add another perspective on this - I'm a CPA and see this confusion a lot during tax season. The key thing most people miss is that the FICA exemption for minors is primarily about WHO they work for, not how old they are. Your daughter's situation is actually pretty common - having one employer that's a regular business (pool/city) correctly withhold FICA, and another that's a family business correctly NOT withhold FICA. Both employers were following the rules properly. One tip for parents: when your teen starts working, ask about the business structure. If it's a regular employer (corporation, partnership with non-parent partners, government entity), expect FICA withholding. If it's truly a parent-owned sole proprietorship and the child is under 18, then no FICA should be withheld. The $270 your daughter paid in FICA taxes will count toward her future Social Security benefits, so it's not completely "lost" money - it's an investment in her retirement that started early!

I've been following this thread and want to add some additional context that might help clarify the code P situation. As a newcomer to this community, I really appreciate how helpful everyone has been in explaining these retirement distribution codes! From what I've gathered reading through all the responses, the most important thing is that code P specifically indicates a "qualified distribution" from a Roth account. This means the distribution meets both the 5-year rule (the account has been open for at least 5 years) AND one of the qualifying conditions (age 59½+, disability, first-time home purchase up to $10k, or distribution to beneficiary). One thing I haven't seen mentioned yet is that if you're unsure whether your distribution truly qualifies as "qualified," it's worth double-checking this with your account administrator. Sometimes distribution codes can be assigned incorrectly, and if your distribution doesn't actually meet the qualified requirements, you might owe taxes and penalties that code P wouldn't reflect. Also, for anyone dealing with state taxes - while federal treatment of code P distributions is generally straightforward (report but not taxable), some states have different rules for retirement income. A few states might still tax Roth distributions even when they're federally tax-free, so it's worth checking your specific state's treatment. The consensus here seems solid though - report it on the tax year shown on the form, complete Form 8606 if required, and don't stress about additional federal taxes since qualified Roth distributions are tax-free. But definitely don't skip reporting it entirely!

As someone new to this community, I want to thank everyone for the incredibly detailed explanations about code P distributions! This thread has been a goldmine of information. I'm currently dealing with my first 1099-R with code P from a Roth IRA distribution, and reading through all these experiences has helped me understand that I need to report it on the tax year shown on the form (not when I received it) and that it should be tax-free since it's a qualified distribution. One thing I'm still trying to wrap my head around is the Form 8606 requirement that several people mentioned. My tax software (FreeTaxUSA) prompted me to complete Part III when I entered my 1099-R information, but I want to make sure I'm filling it out correctly. For a code P distribution, do I need to have records of my original Roth contributions to complete this form properly? Also, I noticed my 1099-R shows the full distribution amount in box 1, but box 2a (taxable amount) shows $0 - which seems to confirm this is indeed a qualified, non-taxable distribution. Is this what others have seen on their code P forms? I'm planning to call my IRA provider tomorrow to confirm all the details, but this discussion has given me so much more confidence about handling this situation properly. The key takeaway seems to be: don't panic, report it properly, and remember that code P is actually good news for your tax situation!