Welcome to the world of self-employment taxes! As a fellow young entrepreneur who started tutoring in college, I totally get the confusion. Here are some key points that might help: First, you're right that you need to report income over $400, and yes, you'll owe self-employment tax on your net profit (around 15.3%). The IRS can definitely track your income through payment processors like Venmo and PayPal - they report transactions over certain thresholds. Regarding your college expenses: unfortunately, you can't deduct your general education as a business expense just because it helps your tutoring. The IRS distinguishes between education that maintains/improves existing business skills versus education that qualifies you for a new profession. Since you're pursuing a degree, that typically falls into the latter category. However, you CAN deduct legitimate business expenses like: - Mileage to/from tutoring sessions (keep a detailed log!) - Tutoring materials, books, supplies - Business portion of phone/internet if used for tutoring - Any software or apps specifically for your tutoring business My advice: open a separate account for tutoring income ASAP and track every business expense. Even if your net profit is small after legitimate deductions, you'll still likely owe some self-employment tax. But proper record-keeping will ensure you're only paying what you actually owe! Also consider setting aside 25-30% of each payment for taxes so you're not caught off guard at filing time.

Great question, Diego! I went through the exact same confusion when I started my side business. A few key points that might help clarify things: First, regarding your gift money vs tutoring income - the IRS actually has ways to track this through 1099 forms from payment processors and bank deposit patterns. It's much better to be transparent and keep separate records than to try to blur the lines. Second, I see you're thinking about deducting all your education costs, but unfortunately that won't work. Your college degree program prepares you for a new career/profession, so the IRS considers that personal education rather than business training. However, you CAN deduct specific tutoring-related expenses like materials you create for students, supplies, and yes - mileage when driving to meet students (keep that detailed log!). One thing that really helped me was calculating my actual tax burden early on. With $840 in income, after legitimate business deductions, you're probably looking at owing around $120-180 in self-employment tax (15.3% on net profit). Not huge, but definitely something to plan for. My biggest recommendation: start separating your business and personal finances NOW. Open a dedicated account for tutoring income and track every business expense. It makes tax time so much easier and shows the IRS you're running a legitimate business rather than just mixing everything together. Also, consider setting aside about 25% of each tutoring payment for taxes so you're not scrambling come filing time!

I've been following this thread as someone who's dealt with F-1 visa tax complications before, and wanted to add one important point that hasn't been mentioned yet. Since you completed your 5-year stay back in 2019 but only started working in June 2023, there's a significant gap there. Make sure your employer understands that your FICA exemption ended in 2019, not when you started this current job. Some payroll departments get confused about this timing and think the exemption is tied to when you start working rather than your total time in the US. This could actually work in your favor - it shows you've been subject to FICA taxes for several years now, so there shouldn't be any question about your status. Just make sure they're calculating from your actual start date in June, not trying to go back further. Also, regarding your concern about "doing this incorrectly" - the fact that you're addressing this proactively after being contacted by your employer shows you're handling it exactly right. The IRS appreciates when taxpayers work to correct errors rather than ignore them.

This has been an incredibly helpful thread! As someone who went through a similar FICA withholding issue with my F-1 to H-1B transition, I wanted to add one more resource that might be useful. If you run into any delays or pushback from your employer about issuing the corrected W-2, you can actually contact the IRS directly to report the issue. There's a specific process for when employers fail to provide corrected tax documents in a timely manner. The IRS can sometimes intervene to get the correction expedited. Also, just to reinforce what others have said about penalties - I was really worried about this too when I discovered my employer had been withholding incorrectly for almost a full year. The IRS agent I spoke with made it very clear that as long as you pay what you owe once the error is discovered, there are no penalties for the employee in these employer withholding error situations. One last tip: when you file your amended return, consider sending it via certified mail. Since it's correcting a FICA withholding issue rather than claiming additional refunds, it's not likely to trigger problems, but having proof of delivery gives you peace of mind and documentation for your records. You're handling this exactly the right way by being proactive about it!

This is such a helpful thread! I'm in a similar situation and had one additional consideration that might help others - if you're planning to get married in the future, you'll want to think about the timing of adding your partner to benefits vs. getting married. When you get married, your spouse's benefits automatically become tax-free (no more imputed income), but you can only make changes during open enrollment or qualifying life events. Marriage is a qualifying event, but adding a domestic partner might use up your one "life event" change for the year depending on your employer's policy. Also, if you're contributing to a Dependent Care FSA for things like childcare, the domestic partner situation gets even more complex. The IRS has strict rules about who can be covered under these accounts, and domestic partners who aren't tax dependents usually don't qualify. I ended up waiting until marriage to add my partner to avoid the tax complications, but I know that's not an option for everyone. Just something to consider in your decision-making process!

Great question about coverage gaps! From my experience, marriage is considered a separate qualifying life event, so you should be able to make changes immediately when you get married even if you recently enrolled a domestic partner. The key is that these are two distinct qualifying events under most employer plans. However, I'd strongly recommend checking with your HR department about their specific policy on this. Some employers have waiting periods or restrictions on how quickly you can make multiple changes, even with qualifying events. When I called HR about this exact scenario, they confirmed that marriage would allow immediate changes regardless of recent domestic partner enrollment. As for the Dependent Care FSA, you're absolutely right to be concerned. The IRS rules are strict - only qualifying dependents can be covered, and domestic partners who don't meet the tax dependency tests usually don't qualify. This means if your partner has their own income above the threshold, daycare expenses for their children typically won't be eligible for reimbursement from your FSA. This could be a major factor in your decision. If you're looking at $5,000 in annual FSA savings for childcare (the maximum contribution), that tax benefit might outweigh the extra taxes from imputed income on health benefits. Definitely run the numbers on both scenarios before deciding!

I've been in a similar situation and unfortunately learned the hard way that there's really no mechanism to get estimated tax overpayments back mid-year. The IRS system just isn't set up for that - they basically treat all your payments (estimated taxes, withholding, etc.) as one big pot that gets reconciled when you file your return. One thing I wish I had known earlier is that you can actually calculate the "safe harbor" amount to avoid underpayment penalties. If you pay at least 100% of last year's tax liability (or 110% if your AGI was over $150k), you won't get hit with penalties even if you underpay during the year. This might help you feel more comfortable reducing future estimated payments if you find yourself in this situation again. Also, definitely file as early as possible in January to get that refund back quickly. I filed on January 20th last year and had my refund within 2 weeks via direct deposit.

I've been dealing with this exact issue for the past couple of years since I started getting RSUs. What really helped me was setting up a spreadsheet to track my withholding throughout the year - I include regular payroll withholding, supplemental withholding from stock vests, and my estimated payments all in one place. The key insight I learned is that supplemental income (like stock compensation) gets withheld at a flat 22% rate, which might not match your actual marginal tax rate. If you're in a lower bracket, you're probably overwithholding on those vests, and if you're in a higher bracket, you might be underwithholding despite it feeling like they're taking a ton. I now review my withholding situation after each major vesting event and adjust my remaining estimated payments accordingly. It's saved me from both overpaying (like your situation) and underpaying with penalties. The IRS actually has a pretty decent withholding calculator on their website that you can use mid-year to figure out if you need to adjust your W-4 or estimated payments. Unfortunately, you're stuck waiting for your refund, but at least you won't owe any penalties for overpaying!

This thread has been absolutely incredible to follow! I'm working part-time at a local ice cream shop and was having the exact same panic about $0 federal withholding on my paystubs. Making about $1,800 so far this year, I was totally convinced something was wrong with my tax situation. Reading through all these explanations about the standard deduction has been such a huge relief! It makes perfect sense now that the withholding system calculates based on projected annual income - since we're all earning well under that $13,850 threshold, zero federal income tax withholding is exactly what should happen. What really clicked for me was understanding the difference between FICA and federal income tax that everyone keeps mentioning. I was seeing those Social Security and Medicare deductions (7.65%) and getting so confused about why some taxes came out but not others. Now I know FICA applies to every dollar while federal income tax only starts above the standard deduction! I'm definitely starting that spreadsheet tracking system so many people recommended - seems like the perfect way to stay organized and reduce anxiety about my earnings throughout the year. And knowing about the potential Earned Income Credit has me actually looking forward to filing instead of dreading it! This community is amazing - you've all turned what felt like a terrifying tax problem into something I actually understand. Thanks for creating such a helpful resource for us newcomers to the workforce!

This thread has been such a fantastic resource! I'm also working part-time at a local grocery store and was experiencing the exact same confusion about $0 federal withholding on my paystubs. Making around $2,050 so far this year, I kept worrying that I had made some error on my W-4 or that payroll was processing my taxes incorrectly. Reading through everyone's thorough explanations about how the standard deduction works has been incredibly reassuring. It finally makes complete sense that when your projected annual income will be well below that $13,850 threshold for 2024, the withholding system correctly calculates zero federal income tax owed. The repeated clarifications about FICA vs federal income tax have been so helpful too. I was getting confused seeing Social Security and Medicare deductions (7.65% total) while federal income tax showed $0, but now I understand that FICA applies from the very first dollar earned while federal income tax only applies once you exceed the standard deduction. I'm absolutely going to start using that spreadsheet tracking method that's been recommended throughout this discussion - it seems like such a practical way to monitor my earnings and stay organized for tax season. And learning about potentially qualifying for the Earned Income Credit has actually made me excited about filing my first return! This community has been absolutely amazing at transforming what felt like a scary tax issue into something I completely understand and feel confident about. Thank you to everyone who shared their knowledge and experiences - this thread is pure gold for anyone starting their first part-time job!