Has anyone used TurboTax for this situation? I've been using it for years but now I'm wondering if it's been calculating my federal disability retirement correctly. Does it know to use Box 2a instead of Box 1?

This is exactly the kind of issue that highlights why federal employee retirement taxation can be so tricky. As others have mentioned, you're absolutely correct that Box 2a should be used for your taxable income calculation, not Box 1. For federal law enforcement officers with disability retirements, the tax-exempt portion typically comes from one of two sources: either contributions you made with after-tax dollars during your service, or the portion of your retirement that qualifies as disability compensation under federal tax code. Since you mentioned this has been happening for years, I'd strongly recommend pulling together your last 3-4 years of tax returns and 1099-R forms to compare what was reported versus what should have been reported. The potential refunds could be substantial. One thing to be aware of - when you file amended returns for this type of correction, make sure to clearly document that you're correcting the use of Box 1 versus Box 2a amounts. The IRS sees a lot of federal employee retirement tax corrections, so they're familiar with this issue, but clear documentation helps ensure smooth processing. Also, if you have access to your OPM retirement account online, they often have explanatory documents that break down exactly why there's a difference between your gross and taxable amounts, which can be helpful supporting documentation.

This thread has been absolutely incredible - thank you all for sharing such detailed experiences! As someone who's about to go through this exact process with my photography LLC, I'm taking notes on everything mentioned here. One thing I'm curious about that I don't think was fully covered: if you're changing responsible parties mid-year (like Giovanni's situation), do you need to file any amended returns for earlier quarters in that year? Or do the previous filings stand as-is since they were accurate at the time they were submitted? Also, I noticed several people mentioned the 4-8 week processing time, but has anyone experienced significantly longer delays? I'm trying to plan around some upcoming quarterly deadlines and want to build in enough buffer time. The checklist idea and timeline document suggestions are fantastic - I'm definitely going to create both before I start this process. It's clear that while the 8822-B itself is straightforward, coordinating all the related updates requires serious organization. Thanks again to everyone who shared their real-world experiences. This is exactly the kind of practical guidance you can't find in the official IRS instructions!

This has been such an incredibly detailed and helpful thread! I just went through this exact process with my landscaping LLC about 6 months ago, and I wish I had found a discussion like this beforehand. One small detail I'd add that hasn't been mentioned yet - if you're using any business credit cards or have business loans where the responsible party is listed as a contact or guarantor, you'll want to notify those lenders about the change too. I found out the hard way when our bank tried to contact our old responsible party about a routine credit line review and couldn't reach him. Also, regarding the timing question from @Liv Park - I submitted my 8822-B in September (outside of tax season) and it took exactly 5 weeks to process, which was right in that sweet spot everyone's been mentioning. But I did have a friend who filed during January and waited almost 12 weeks, so the peak season timing advice is definitely worth following. @Giovanni Marino - based on everything discussed here, it sounds like you're in great shape to handle this change smoothly. The fact that David is already involved in the business should make the transition much easier than situations where you're bringing in someone completely new to the tax responsibilities. Just make sure to keep detailed records of everything and you should be all set!

One more thing to consider - if you're earning that much at 14, you might want to look into opening a Roth IRA! You can contribute earned income (like your Patreon money) up to the annual limit or the total amount you earned, whichever is less. Starting retirement savings at your age would be AMAZING for long-term growth. Your parents would need to help set this up as a custodial account, but it's a fantastic way to start building wealth while getting tax advantages. Plus, you can actually withdraw your contributions (not the earnings) penalty-free if you need them for something like college.

Hey Luca! Great to see a young entrepreneur doing so well with their art! Just wanted to add a few practical tips from someone who's helped several teens navigate this: 1. **Quarterly estimated taxes**: Since you're making $450-500/month, you'll likely owe more than $1,000 in taxes for the year. This means you should consider making quarterly estimated tax payments to avoid penalties. Your first payment for 2025 would be due April 15th. 2. **Record keeping is CRUCIAL**: Start tracking everything now - income, expenses, receipts. Use a simple spreadsheet or app like QuickBooks Self-Employed. The IRS loves good records, especially for self-employment income. 3. **State taxes**: Don't forget about state income tax if you're in a state that has it! The rules can vary significantly by state for minor dependents with self-employment income. 4. **Consider forming an LLC**: Once you're consistently earning this much, your parents might want to look into forming a single-member LLC with them as the organizer. It can provide some liability protection and might make business banking easier. Keep up the great work with your art! It's awesome that you're thinking about taxes responsibly at 14. Your future self will thank you for getting this right from the start.

Question for anyone who understands this better than me - I've been accumulating passive losses for years but I'm considering converting one of my rentals to a primary residence for 2 years before selling to qualify for the $250k/$500k exclusion. What happens to the suspended passive losses in that scenario?

This is a great discussion on suspended passive losses! One thing I'd add that might help with planning - keep detailed records of which years your suspended losses were generated. When you eventually sell a property, the IRS requires you to track the suspended losses in chronological order (oldest first), and this becomes important if you're doing installment sales or have multiple properties. I learned this the hard way when I sold a rental property on an installment basis. The suspended losses are released proportionally with each payment received, not all at once in the year of sale. So if you're considering seller financing or installment sales as part of your exit strategy, factor in how that will affect the timing of when you can actually use those suspended losses. Also, don't forget about the Net Investment Income Tax (NIIT) implications. When your suspended passive losses become non-passive upon sale, they can help reduce your NIIT exposure if your income is above the thresholds ($200k single, $250k married filing jointly).

Great question! I was in a similar situation a few years ago and learned some hard lessons. With your combined income of around $63,000, you'll definitely want to be proactive about withholding. One thing to keep in mind is that restaurant work often involves tips, which are taxable income that may not have proper withholding. If you're serving tables, make sure to track all your tip income carefully and consider that when calculating your total annual earnings. The "different tax bracket" comment from your manager is referring to how your marginal tax rate increases as your income goes up. While you won't pay the higher rate on all your income (that's a common misconception), the additional $15K will likely be taxed at 22% instead of the 12% rate that covers most of your main job income. My recommendation: Use the IRS withholding calculator online to get specific guidance for your situation, or consider having extra tax withheld from your main job's paycheck. I'd rather get a refund than owe money when saving for a house down payment! Also, keep good records of any work-related expenses from the restaurant job.

Having been through this exact scenario myself, I'd definitely echo the advice about adjusting your withholding proactively. One thing I wish someone had told me when I started my second job - consider setting aside a small emergency fund specifically for potential tax surprises, even if you do everything right with withholding. With restaurant work, there are a few additional considerations beyond just the base wages. If you're in a tipped position, your employer might only withhold taxes on your hourly wage (which could be as low as $2.13/hour in some states) but not on your tips. This can create a significant underwitholding situation if your tips are substantial. Also, make sure both employers know about your multiple job status when filling out your W-4. There's actually a checkbox on the 2020 and newer W-4 forms (Step 2c) specifically for this situation. Don't be afraid to be conservative with your withholding - when you're saving for a house down payment, the last thing you want is to have that money tied up in an unexpected tax bill. The good news is that $63k total income is still very manageable from a tax perspective, and with proper planning you shouldn't have any nasty surprises come filing time!