Has anyone else noticed that the whole withholding system seems designed to be confusing? I make $134k, claim 0, and yet still ended up owing almost $3k this year. My friend makes LESS than me but somehow gets a refund every year!

I completely understand your frustration! I went through something very similar last year. Making around $132k and claiming 0, I was shocked when I still owed over $2,800 at tax time. After digging into this, I learned that 8% federal withholding for your income level is definitely too low. At $130k with standard deductions, you should expect closer to 16-20% in federal withholding depending on your filing status and pay frequency. A few things that could be causing this issue: 1. Your employer might be using outdated withholding tables 2. They could be incorrectly calculating your withholding method (percentage vs. wage bracket) 3. You might have pre-tax deductions that are reducing your taxable wages more than expected 4. If you get paid irregularly or have bonuses, the withholding calculations can get thrown off I'd recommend downloading your last few pay stubs and checking the year-to-date federal withholding against your gross pay. If it's consistently around 8%, there's definitely something wrong with how your payroll is calculating it. The IRS withholding estimator tool can help you figure out exactly what should be withheld and give you ammunition to take back to your HR department. Don't give up - you shouldn't have to owe money when claiming 0 allowances on a straightforward W-2 salary!

This is such a common dilemma for new LLCs! From what I've seen in similar situations, the $2k monthly guaranteed payment route might actually work better for you given your income level and the QBI considerations mentioned earlier. Here's why: with $27k in net income and you being the active partner, a $24k guaranteed payment would be reasonable compensation for your services. This leaves only $3k to be split as distributions, which means your silent partner gets their fair share ($1.5k) without you having to pay self-employment tax on income that really reflects your labor. The key insight others touched on is that you'll pay self-employment tax on your distributive share of partnership income regardless of whether it's distributed. So structuring it as guaranteed payments might actually be cleaner from a tax perspective, even though you lose some QBI deduction benefits. Have you run the numbers both ways including self-employment tax, regular income tax, and the QBI deduction impact? That comparison should give you a clearer picture of which approach saves more money overall.

As someone who just went through this exact decision process with my LLC partnership, I wanted to share what ultimately worked for us. We ended up going with a hybrid approach that balanced the tax benefits of both structures. After consulting with our CPA and running detailed projections, we settled on a $18k guaranteed payment for the active partner (me) plus unequal distributions of the remaining $9k split 70/30 in favor of the active partner. This gave us the benefits of reasonable compensation for services while still maximizing QBI deduction eligibility on the distributed income. The key insight was that the guaranteed payment amount should reflect fair market value for the services provided - not just what's left over after distributions. We documented this by researching comparable salaries for similar roles in our industry and including that analysis in our partnership agreement amendments. One thing that really helped was creating a detailed operating agreement that spelled out exactly how we determined the guaranteed payment amount and distribution percentages. This documentation will be crucial if the IRS ever questions our allocation methods. The tax savings compared to either pure guaranteed payments or pure distributions was significant - about $2,400 in our case when factoring in SE tax differences and QBI benefits. Definitely worth the extra complexity in our partnership paperwork!

One more thing to consider - if you're worried about the amendment process but still want to claim the deduction, you could wait until after the trial period ends to file your tax return. Since you have until April 15th (or October 15th with an extension) to file your 2024 return, you could purchase the hearing aids in December 2024, go through the trial period until May 2025, and then file your return knowing for certain whether you're keeping them or not. This approach eliminates the risk of needing an amended return entirely. Just make sure you're comfortable with filing closer to the deadline and that you don't need your refund earlier in the year. It's a more conservative approach that might give you peace of mind while still allowing you to claim the deduction if you end up keeping the hearing aids.

I appreciate all the detailed responses here! As someone who works in healthcare billing, I wanted to add one more perspective about tracking your expenses. Even if you're not sure you'll hit the 7.5% AGI threshold this year, it's worth keeping detailed records of ALL your medical expenses throughout the year. Medical expenses can be unpredictable - you might end up needing additional treatments, therapies, or equipment later in the year that push you over that threshold. I've seen patients who thought they wouldn't itemize suddenly find themselves with significant medical bills from unexpected health issues. For hearing aids specifically, don't forget that if you need any follow-up appointments for adjustments, hearing tests to fine-tune the settings, or if your audiologist recommends additional accessories or equipment, those all count toward your medical expense total too. The hearing aid purchase might be the big expense, but the ongoing care costs can add up. Also, if you have a Health Savings Account (HSA) or Flexible Spending Account (FSA), hearing aids are definitely qualified expenses for those accounts, which might be an even better tax advantage than itemizing depending on your situation.

I'm in almost the exact same boat as you! Filed in January, got my refund in February, then realized I forgot to include a 1099-INT from my savings account. My CPA also gave me the "about 4 weeks" estimate which now seems wildly optimistic based on everyone's experiences here. I ended up e-filing my 1040-X about 6 weeks ago and I'm still in the "received" status on the IRS tracker. Reading through these comments is actually making me feel a lot better - sounds like 12-16 weeks is pretty normal, and at least we'll get interest on the additional refund after 45 days. One thing I learned from my research is that simple amendments like ours (just adding forgotten income documents) typically process faster than complex ones involving multiple changes or business deductions. So hopefully we'll be on the shorter end of that timeline! Definitely don't abandon it - even if it's not a huge amount, free money is free money, plus the interest. Just try not to check the tracker obsessively like I've been doing!

I filed an amended return last year for a similar situation - forgot to include a 1099-R from a small retirement account rollover. The whole process took about 18 weeks from e-filing to getting my additional refund deposited. What really helped me was setting realistic expectations from the start. The IRS website says "up to 16 weeks" but that's really the minimum you should expect, not the maximum. Most amended returns seem to fall in the 12-20 week range based on what I've seen in various tax forums. A few tips that made the wait more bearable: 1) Screenshot your e-filing confirmation - you'll want proof you submitted it correctly, 2) Mark your calendar for when you hit the 45-day mark (that's when interest starts accruing on your refund), and 3) Try to check the tracker only on Fridays since that's typically when they batch update the system. The money will come eventually, and honestly the interest made up for some of the frustration of waiting. Hang in there!

Tell your coworker to google "IRS frivolous tax arguments" and look at the official IRS website. They literally have a whole section dedicated to debunking these exact schemes and warning about the $5,000 penalty for submitting these arguments. Also search for "tax protester cases" to see how many people have gone to PRISON for this stuff!

Your instincts are spot on - this is absolutely a scam and your coworker is playing with fire. I work in tax compliance and see the aftermath of these schemes regularly. The "Revocation of Election" is complete nonsense with no legal basis whatsoever. The scary thing is that people can get away with it for a few years, which makes them think they're safe. But the IRS has up to 6 years (or indefinitely in cases of fraud/non-filing) to come after you. When they do, it's devastating - we're talking about accumulated interest, failure-to-file penalties, failure-to-pay penalties, plus that $5,000 frivolous filing penalty for each year. I've seen cases where someone owed $15K in actual taxes but ended up owing over $60K after penalties and interest. Your coworker needs to get back into compliance immediately before this gets worse. The longer he waits, the more expensive this mistake becomes.