This is a great question that trips up a lot of investors! I went through the same confusion when I first started using margin. The key thing to understand is that margin interest isn't tied to specific stock purchases - it's treated as a general investment expense against your overall portfolio. So in your example, that $7.50 in margin interest can be applied against any investment income you have, not just gains from Stock Y that you bought on margin. However, as others have mentioned, it doesn't directly reduce your capital gains dollar-for-dollar. Instead, it goes on Schedule A as an itemized deduction (assuming you itemize), and it's limited to your net investment income for the year. One practical tip: if you're close to the standard deduction threshold, sometimes it makes sense to bunch investment expenses like margin interest into one tax year to push you over the itemization threshold. You might also want to consider the timing of when you realize gains vs. when you pay margin interest to maximize the tax benefit. Keep good records of all your margin interest payments throughout the year - your brokerage statement at year-end should show the total, but it's good to track it yourself too.

As someone who's dealt with this exact scenario, I can confirm what others have said - the margin interest isn't tied to specific stocks. The IRS treats it as general investment interest expense against your entire portfolio. In your example with the $7.50 margin interest and $65 gain on Stock X, you'd report the full $65 capital gain on Schedule D. The margin interest would only be deductible on Schedule A if you itemize, and only up to your net investment income for the year. One thing I learned the hard way: make sure you understand what counts as "net investment income" for this limitation. It includes interest, dividends, and short-term capital gains, but long-term capital gains only count if you make a special election (which can affect your tax rate on those gains). With the current standard deduction being so high, many investors find that small amounts of margin interest don't provide any actual tax benefit because they don't have enough total itemized deductions to exceed the standard deduction threshold. You might want to calculate whether itemizing would actually benefit you before assuming you'll get a deduction for the margin interest. Keep detailed records throughout the year - your broker will provide a summary, but it's good to track it yourself to catch any discrepancies early.

I was in your exact shoes a couple years ago! The "100% tax deductible" language is so confusing - it really does make it sound like you'll get all your money back, but that's not how deductions work at all. Here's what I wish someone had told me upfront: a tax deduction reduces your taxable income, not your tax bill dollar-for-dollar. So that $650 donation would lower your taxable income by $650, and your actual tax savings would be $650 multiplied by your tax rate. If you're in the 22% bracket, you'd save about $143 in taxes, not $650. But here's the bigger catch - you only get ANY benefit from charitable deductions if you itemize instead of taking the standard deduction. For 2025, the standard deduction is around $13,850 for single filers. Unless your mortgage interest, state/local taxes, medical expenses, and charitable donations combined exceed that amount, you won't see any tax benefit from the museum donation at all. I'd suggest doing a quick calculation of your potential itemized deductions before deciding. But honestly, if you're interested in supporting the museum and would enjoy the member perks, it's still worthwhile even without tax benefits. Just don't expect to get the money back at tax time!

I had this exact same misconception when I first started looking into charitable giving! The marketing language around "100% tax deductible" is really misleading - it makes it sound like you'll get every penny back, but that's not how deductions work. Here's the simple breakdown: when you donate $650 to the museum, you can subtract that $650 from your taxable income (assuming you itemize). So if you normally pay taxes on $40,000 of income, now you'd pay taxes on $39,350 instead. The actual money you save depends on your tax bracket - maybe you save $78 if you're in the 12% bracket, or $143 if you're in the 22% bracket. But here's the catch that trips up most people: you only benefit from charitable deductions if you itemize your deductions instead of taking the standard deduction. For 2025, the standard deduction is about $13,850 for single filers. Unless all your itemizable expenses (mortgage interest, state taxes, medical expenses, charitable donations, etc.) add up to more than that, you won't get ANY tax benefit from the museum membership. Since you mentioned you're new to taxes, I'd bet you're probably taking the standard deduction like most people do. In that case, the donation wouldn't reduce your taxes at all, even though it's "100% deductible." My advice? Don't make the donation purely for tax reasons. But if you'd genuinely enjoy being a museum member and want to support the arts, go for it! Just don't expect to get the money back come tax time.

Has anybody used the supplemental rate calculator on the IRS website? I tried using it for my bonus but I think I'm doing something wrong because it says my withholding should only be around 35% total but my company took out almost 50%.

This is completely normal and you're not alone! The 52% withholding you're seeing is exactly what I experienced with my last bonus. The key thing to remember is that this is just withholding - it's not your actual tax rate on the bonus. Your employer is required to withhold at the supplemental wage rate, which is 22% for federal taxes, plus your state rate, plus payroll taxes (Social Security and Medicare). In high-tax states, this can easily add up to 50%+ in total withholding. The good news is that when you file your taxes, your bonus gets added to your regular income and taxed at your marginal rate. Since you make $95k, your effective tax rate on the bonus will likely be much lower than 52%. You'll probably get a decent refund when you file, especially if your regular paycheck withholding is also set up correctly. I'd recommend keeping track of your total withholding throughout the year so you can adjust your W-4 if needed to avoid a massive refund (which is basically giving the government an interest-free loan). But for now, just know that most of that extra withholding will come back to you!

I'm dealing with this exact same situation! Dissolved my S-corp about 7 months ago, filed the final 1120-S properly, but completely forgot about Form 966 until I was going through old files this week. Reading through everyone's experiences here has been such a relief - it's incredible how many people went through the same thing with consistently positive outcomes. The pattern is really clear: as long as you've handled the substantive tax requirements (final 1120-S, proper distributions, taxes paid), the IRS treats late Form 966 as a minor paperwork oversight rather than a serious compliance violation. What gives me the most confidence is seeing multiple people who were 8-12 months late and experienced zero penalties. It really seems like the IRS focuses their enforcement efforts on actual tax avoidance rather than late informational returns from small businesses that clearly made good faith efforts to comply. I'm going to follow the same approach that worked for everyone else - file the Form 966 this week with a simple explanation letter acknowledging the oversight and confirming all final obligations were met. I'll also double-check that asset values match between the 966 and my final 1120-S like others recommended. Thanks to everyone who shared their real experiences instead of just generic warnings - this thread has been incredibly helpful for reducing the stress around what turned out to be a much more common and manageable situation than I initially thought!

I'm in a nearly identical situation - dissolved my S-corp about 6 months ago and just discovered I never filed Form 966! This thread has been absolutely invaluable. Reading through everyone's experiences, the pattern is crystal clear: the IRS doesn't penalize small S-corps for late Form 966 filings when you've properly handled the substantive requirements. Like many of you, I filed my final 1120-S correctly and distributed all assets properly. What's really reassuring is seeing so many people who were 6-12 months late with zero penalties or issues. It definitely seems like the IRS recognizes the distinction between actual tax compliance (which we've all handled) and paperwork formalities. I'm going to follow the proven approach everyone's shared - file the Form 966 this week with a brief explanation letter acknowledging the oversight and confirming all final obligations were met. I'll also carefully verify that asset values and dates match exactly between the 966 and my final 1120-S to avoid any discrepancies. Thanks to everyone who shared their real-world outcomes instead of just theoretical warnings. This thread has transformed what felt like a major problem into a manageable administrative task. Sometimes we really do overthink these situations when the IRS clearly has bigger priorities than chasing down late informational returns from compliant small businesses!

I'm going through the exact same waiting game right now! My DDD is also tomorrow and I've been refreshing my Navy Federal app like it's going to magically update. Reading everyone's experiences here is super reassuring though - it sounds like Navy Federal is incredibly consistent with that midnight processing. I had no idea they don't show pending status for tax refunds, which explains why I haven't seen anything yet! This is actually my first year using Navy Federal for my refund and I was starting to worry something was wrong. Based on what everyone's sharing, it looks like we just need to be patient until after midnight Eastern time. The anxiety of waiting for your own money is so real! Thanks to everyone who shared their experiences - this community is a lifesaver for nervous first-timers like me! 🤞

I've been with Navy Federal for my tax refunds for the past 5 years and can confirm what everyone else is saying - they're incredibly consistent with the midnight processing! I used to be just like you, checking obsessively the day before my DDD, but I've learned that Navy Federal handles tax refunds like a well-oiled machine. They don't show pending status for IRS deposits, but your money will absolutely be there at 12:01 AM Eastern time on your DDD. Since your DDD is 3/13, that means your refund should hit tonight after midnight (or 9 PM if you're on the west coast). I actually love this about Navy Federal - no games, no delays, just reliable service. Set an alarm for 12:05 AM and check once instead of driving yourself crazy all day. Your refund train is right on schedule! 🚂💰