Great question Samuel! As a newcomer to S-corp ownership myself, I went through this exact confusion recently. The key thing I learned is that the IRS requires what they call "adequate records" which means more than just credit card statements. You'll want to keep receipts and document the business purpose for each expense. I use a simple system where I snap photos of receipts immediately and add a quick note about the business purpose right in my phone's photo app. For example, "lunch meeting with potential client" or "office supplies for workspace setup." Regarding payment - definitely pay from your business account only. This maintains what's called the "corporate veil" which protects your personal assets. Mixing personal and business funds can actually jeopardize your S-corp status and liability protection. One thing that helped me was setting up automatic payments from my business checking to the credit card, so I never have to think about accidentally using personal funds. Also consider using expense tracking apps or simple accounting software from the start - it's much easier than trying to organize everything at tax time! The IRS generally looks for consistency and good faith effort in record keeping, so starting with proper habits now will serve you well long-term.

As someone who made every mistake in the book during my first year with an S-corp, let me add a few hard-learned lessons to this great discussion: **The "business purpose" documentation is CRITICAL** - I got burned on this during a correspondence audit. The IRS rejected several thousand dollars in deductions because my credit card statements showed the vendor and amount, but I couldn't prove business purpose. Now I write the purpose directly on receipts before filing them. **Mixed personal/business use items need extra attention** - Things like your phone bill, internet, or a laptop that you use for both personal and business need to be prorated. Keep detailed logs of business vs personal usage percentages. **Timing matters for S-corp specifics** - Unlike other business structures, S-corp owners who work in the business must take reasonable salary before distributions. This affects how you categorize certain expenses, especially if you're using the credit card for owner-related expenses. **Consider a separate "owner draw" tracking system** - If you occasionally need to cover business expenses personally (like when traveling), set up a formal reimbursement process rather than just paying the credit card from personal funds. This maintains clean separation and proper documentation. The good news is that once you get these systems in place, it becomes second nature. But the IRS definitely scrutinizes S-corp expense documentation more closely than sole proprietorships, so the extra effort is worth it!

This thread has been incredibly educational! As someone who just started picking up overtime shifts at my retail job, I was getting really discouraged seeing those big tax withholdings. Reading everyone's explanations about how the payroll system calculates withholdings based on individual paychecks rather than annual income has been a huge relief. What really clicked for me was the example someone gave about a $3,000 paycheck being treated as if you make $78,000 annually - no wonder the withholding jumps so dramatically! I checked my pay stub and I'm only at about $28,000 year-to-date, so I should definitely be getting most of that overwithholding back. I'm going to start using that "forced savings" mindset that several people mentioned. Since I'm also trying to build up an emergency fund, thinking of the excess withholding as money being set aside for me rather than money that's gone forever makes the whole situation feel much more manageable. Thanks everyone for sharing your experiences - it's so helpful to know I'm not the only one who's been confused and frustrated by this!

This is exactly what happened to me when I started working extra shifts at the warehouse! I was so confused and honestly a bit angry when I saw my first overtime paycheck - it felt like they were taking almost everything I'd earned from those extra hours. What helped me understand it was realizing that the payroll system is basically doing math like this: if you normally make $800/week and suddenly make $1,200 one week, it calculates as if you'll make $62,400 for the year instead of your actual projected $41,600. So it withholds taxes as if you're in a higher bracket. The reality is that when you file your taxes, the IRS looks at your actual total income for the year, not what any individual paycheck suggested. So if your total annual income (including all that overtime) still keeps you in your current tax bracket, you'll get back the difference between what was withheld and what you actually owe. I've been tracking this for two years now, and I typically get back about 75-80% of the "extra" withholding from overtime checks. The portion I don't get back is usually because some of that overtime income did push me slightly into the next tax bracket, but even then it's way less than what initially got withheld. Keep working those extra shifts if you can - that refund money will be a nice boost for your down payment fund when tax season rolls around!

As someone who just joined this community and is navigating my first tax season as an independent filer, this post and all the responses have been incredibly educational! I literally had my transcript open in another tab with an 846 code showing a date next Friday, and I was about to ask the exact question you're talking about. Reading through everyone's explanations really drives home how clear the information actually is once you understand what you're looking at. I think the issue for newcomers like me is that we're so used to things being complicated with the IRS that we assume there must be some hidden complexity we're missing, even when the answer is right there. The banking processing time explanations are especially helpful - knowing that direct deposits might take 1-2 extra days after the 846 date gives me realistic expectations instead of refreshing my bank account obsessively on Friday. Thanks for the reality check, and thanks to everyone who took the time to break down how this all works!

I'm brand new to this whole tax thing and honestly, this entire thread has been like a masterclass in reading transcripts! I literally have my transcript pulled up right now showing an 846 code with a date for next Wednesday, and I was 100% about to make one of those posts asking "so when will I actually get my money?" It's embarrassing how obvious it seems now that everyone's explained it, but when you're staring at a government document full of random codes and numbers for the first time, it really does feel like there must be some hidden complexity you're missing. I kept thinking "surely it can't be THAT simple, right?" Thanks for the reality check (even with the eye-rolling 😅) and thanks to everyone who took the time to explain the banking processing times and everything else. This community seems awesome for helping newcomers figure out all this confusing tax stuff. Now I can stop obsessively checking my bank account and just wait for Wednesday... plus 1-2 days for my bank to process it!

I'm a tax preparer and see this confusion every tax season with military families! You're absolutely doing this correctly - military retirement pay is unearned income and doesn't qualify for EIC calculations, even though it does count toward your overall income limits. One thing I always tell clients in your situation: consider having your tax software or preparer run a "what if" scenario comparing married filing jointly vs. married filing separately. Sometimes when one spouse has significantly higher income, filing separately can unlock credits for the lower-earning spouse, though you'd lose other benefits like higher standard deduction. Also, since you mentioned your neighbors' situation - they might have different circumstances (lower civilian income, different filing status, or additional deductions) that keep them under the income thresholds. Or unfortunately, they might be claiming the credit incorrectly. The IRS matching system usually catches these errors within a couple years, so if they are making a mistake, they'll likely hear about it eventually. Keep documenting your research on this topic (like saving this thread) in case you ever need to show you made a good faith effort to understand the rules correctly!

This thread has been incredibly helpful! I'm a veteran spouse dealing with a similar situation - my husband gets VA disability compensation and I was confused about how that impacts our EIC eligibility too. For anyone else reading this who might have VA disability pay, I learned that VA disability compensation is treated differently than military retirement pay for tax purposes. VA disability is completely tax-free and doesn't count as income at all for EIC calculations (neither as earned income nor toward the income limits). So if you have VA disability, it won't hurt your EIC eligibility the way military retirement pay does. Just wanted to add that distinction since I see a lot of confusion about different types of military-related income. Thanks to everyone who shared their knowledge here - it's so much clearer now why some military families qualify for EIC and others don't!

I'm in the exact same boat! Filed my MA return on February 19th and it's been over 7 weeks now with nothing but that useless "processing" status. My federal came back in 9 days but the state is just sitting there doing absolutely nothing. What's really frustrating is how their phone system seems designed to discourage you from calling. I've tried three times and either get disconnected after waiting 90+ minutes or get someone who just reads me the same "be patient" script. My refund is $620 so it's definitely worth following up on. I'm honestly shocked at how many of us are dealing with this same issue. It seems like MA completely botched their processing system this year. At this point I'm seriously considering filing a complaint with the state attorney general's office if this drags on much longer. We shouldn't have to jump through hoops or pay for third-party services just to get basic information about our own tax refunds. Anyone know if there's an escalation process beyond the regular customer service line?

I'm dealing with the exact same frustrating situation here in Massachusetts! Filed my return on February 17th and it's been over 7 weeks now with absolutely no movement beyond that generic "processing" status on their website. My federal refund came through in just 12 days, which makes the state delay even more infuriating. What really gets me is that I've called the MA DOR twice and gotten completely different information each time. First rep said 6-8 weeks is normal, second one mentioned some kind of "system modernization" causing delays but couldn't give me any specifics about my return. It's like they're just guessing at this point. My refund is around $715, so definitely not something I want to just write off. Reading through all these comments, it's clear that 2025 has been an absolute disaster for Massachusetts tax processing. The inconsistency is what bothers me most - some people getting refunds in 4 weeks while others wait 11+ weeks with identical filing dates. I'm definitely going to try that callback service people mentioned because the regular phone line seems like a complete waste of time. It's honestly embarrassing that Massachusetts can't get their basic tax processing system working properly. We shouldn't need third-party services just to get our own money back! Has anyone had any luck getting actual helpful information by escalating beyond the first-level customer service reps?