This has been such an informative discussion! As someone who just started my own DBA for freelance marketing services, I was completely overwhelmed by the tax implications. Reading through everyone's experiences has cleared up so many misconceptions I had. I particularly appreciate the clarification that a DBA doesn't create a separate tax entity - I was worried I'd need to file completely separate returns. The Schedule C explanation makes perfect sense now. Also, the tip about setting aside 25-30% of profits quarterly is exactly what I needed to hear. I've been stressing about not knowing how much to save for taxes. One thing I'd add for other newcomers - make sure to track your mileage if you drive to client meetings or business errands! I almost forgot about this deduction until my accountant mentioned it. The IRS standard mileage rate for 2024 is 67 cents per mile, which can really add up over the year. Has anyone dealt with having clients in multiple states? I'm wondering if that creates any additional tax complications for a DBA, or if it's still just reported on my regular Schedule C regardless of where my clients are located.

This thread has been incredibly valuable! I'm just getting started with my DBA for freelance copywriting and was completely confused about the tax situation. The clarification that a DBA is just a trade name and doesn't change your tax filing status as a sole proprietor is exactly what I needed to understand. I wanted to add something that might help other newcomers - don't forget about the QBI (Qualified Business Income) deduction! As a sole proprietor with a DBA, you may be eligible to deduct up to 20% of your business income on your personal tax return. This is also called the Section 199A deduction. For someone like the original poster making $8,700, this could be a significant tax savings if you qualify. The deduction phases out at higher income levels, but for most small DBA operations, it's a great benefit that many people don't know about. You'd claim it on your Form 1040 in addition to reporting your business income and expenses on Schedule C. Just make sure your business qualifies - most freelance and consulting work does, but there are some restrictions for certain professional services at higher income levels. Definitely talk to a tax professional or use tax software that includes this deduction, as the calculation can be a bit complex depending on your situation.

Just to share my experience - I had capital losses in 2021 and didn't file in 2022 (no income that year). When I filed in 2023 with income, I was still able to use my remaining capital losses from 2021. The IRS didn't question it at all.

I can confirm what others have said - you don't need to file just to preserve your capital loss carryover. I was in a similar situation a couple years back with about $5K in losses and took a year off from working. When I resumed filing the following year, all my losses were still available to use. The key thing is to keep good records of your original loss calculation from last year's return. Make copies of your Schedule D and any supporting worksheets that show how you arrived at the $6,500 loss. The IRS doesn't make these disappear just because you don't file in a zero-income year. That said, focus on your health recovery - that's way more important than worrying about tax filings right now. Your losses will be there when you're ready to get back to earning income and filing returns again.

I've been through a very similar situation with my state university adjunct position, and I want to emphasize something that hasn't been mentioned enough here - you have more negotiating power than you might think! When I received my overpayment demand letter, I initially felt like I had to comply immediately. But after doing some research, I learned that most universities have formal appeal processes for payroll disputes. I submitted a written appeal arguing that since their error went undetected for over a year, they should absorb the tax burden rather than forcing me to float that money until tax season. While they didn't agree to absorb the full tax portion, they did agree to a 6-month payment plan with no interest, and they provided detailed documentation upfront that made claiming the tax credit much smoother. They also agreed to send the documentation directly to my CPA, which helped validate that this was a legitimate wage overpayment correction. The key was approaching it as a reasonable request for accommodation due to their error, rather than accepting their initial demand as non-negotiable. Most university finance departments have dealt with these situations before and understand the tax complications they create for employees. Don't be afraid to advocate for a solution that doesn't put such a financial burden on you for their mistake!

I'm really sorry you're dealing with this - overpayment situations are incredibly frustrating, especially when you're stuck paying back money you never actually received! From what I understand, you do unfortunately owe the university the full gross amount (including the tax portion), but you're not just out that money forever. When you file your 2024 taxes, you'll be able to claim the withheld taxes back through what's called a "claim of right" deduction or credit. A few key things to focus on: **Get proper documentation first** - Before you pay anything, make sure the university provides written confirmation of the overpayment amount, a breakdown of what was withheld for taxes, and acknowledgment that this was reported on your 2023 W-2. This documentation is crucial for your tax filing. **Consider the timing** - Since you'll be repaying in 2024 but the overpayment was in 2023, you might want to strategically time when you make the repayment. If you can delay until January 2025, you could potentially handle everything on your 2025 tax return instead of waiting to file 2024 taxes to recover the money. **Don't rush the payment** - This was their payroll error that went undetected for a year. Taking a few weeks to get proper documentation and understand your options is completely reasonable. Many universities also have internal policies for overpayment situations that might give you more flexibility than their initial demand suggests. You might also want to check if they have a formal appeal process - some people have had success negotiating payment plans or better terms by approaching it as requesting accommodation for the financial burden created by their error. Hang in there - this is definitely solvable even though it's a major headache right now!

I work in payroll and see this confusion all the time. Stock options and RSUs trigger mandatory supplemental income withholding rules. The 45% you're seeing is actually the correct combined withholding when you add up ALL the different taxes: Federal supplemental rate (22%) + State supplemental rate (varies, but often 9-13% for higher income states) + FICA (7.65%) + Additional Medicare Tax if applicable (0.9%) + Local taxes where applicable + Any mandatory retirement withholding your company might have. Many employees think they're being overtaxed, but this is actually protecting you from owing a large sum when you file your return. The alternative would be underwithholding, leading to a surprise tax bill plus possible penalties.

This is definitely frustrating, but unfortunately that withholding rate is pretty standard for stock compensation. I went through the same shock when I exercised my options last year. The key thing to understand is that stock options are treated as "supplemental income" which has different withholding rules than your regular salary. Even though you're normally taxed at 24%, supplemental income gets hit with: - 22% federal supplemental rate (flat rate regardless of your normal bracket) - 6.2% Social Security tax - 1.45% Medicare tax - Your state income tax rate (which can be substantial) - Possibly local taxes depending on where you live When you add all those up, 45% total withholding is actually pretty typical, especially if you're in a state with higher income taxes. The silver lining is that this is just withholding - not your actual tax liability. When you file your return next year, you'll calculate what you actually owe based on your total income for the year. If they over-withheld (which they probably did), you'll get the excess back as a refund. I'd recommend getting a detailed breakdown from your payroll department so you can see exactly where that 45% went. It should all add up to legitimate tax withholdings.

This is really helpful information! I'm in a similar situation as a freelance consultant. One thing I'd add is that if you're doing a lot of business travel with tolls, consider getting a dedicated business checking account and linking your E-ZPass to that account for automatic replenishment. This creates a clear paper trail that separates business toll expenses from personal ones right from the start. I also keep a simple spreadsheet where I log each business trip with the date, destination, purpose, and estimated toll cost. At the end of the month, I reconcile this against my E-ZPass statement. It takes maybe 15 minutes a month but makes tax prep so much smoother. The IRS loves clear documentation, and having everything organized upfront saves tons of stress later!

One thing I'd recommend is setting up a separate business toll account if your provider allows it. I have two E-ZPass accounts - one for personal use and one strictly for business travel. This eliminates the need to sort through mixed statements at tax time. The business account automatically deducts from my business checking account, creating a clean paper trail. For those using apps like MileIQ, most of them have a notes feature where you can quickly record toll amounts for each business trip. This creates a single record with both mileage and toll data. I also take photos of any cash toll receipts with my phone immediately - they fade over time and become unreadable. Remember that parking fees at client locations are also deductible separately from the standard mileage rate, just like tolls. I keep a small envelope in my car specifically for parking receipts since those are easy to lose track of.