I just went through this exact situation! My advice: have your kids file their own taxes BUT check the box that says "Someone can claim you as a dependent." They'll still get refunds of any withholding that exceeds their tax liability, and you can still claim them if they meet all the tests. My 19yr old made $7200 last year but still qualified as my dependent because: 1) lived with me all year 2) I paid over half support (rent, food, etc was way more than his earnings) 3) he's my kid He filed his own return, got back his withholding, and I still got the dependent tax benefit. Win-win!

Just to clarify what others have said - there's an important distinction between "qualifying child" and "qualifying relative" that determines income limits: **Qualifying Child** (no income limit): - Under 19, OR under 24 if full-time student - Lived with you more than half the year - You provided more than half their support - Didn't file joint return with spouse **Qualifying Relative** (income limit applies): - Can't earn more than $5,050 (2024 tax year) - You provided more than half their support - Not a qualifying child of you or anyone else So your 18-year-old could potentially qualify as a "qualifying child" regardless of income, but your 20-year-old (not in school) would need to pass the "qualifying relative" test, which includes the income limit. The key is the support test - you need to calculate if you truly provided more than 50% of their total support costs (housing, food, clothing, medical, transportation, etc.) versus what they paid for themselves with their earnings.

Anyone have experience with how QBI works if you have business losses? I started a business similar to the original poster but had a $12,000 loss my first year. Now in my second year I'm profitable (about $27,000). Does that previous loss affect my QBI calculation?

Great question about QBI! As someone who's been through this maze myself with my small consulting business, I can definitely relate to the confusion. Since your total income is $72,000, you're well below the 2025 threshold of $182,100 for single filers, which means you get the simplified treatment. Your handmade jewelry business absolutely qualifies - it's exactly the type of legitimate trade or business the QBI deduction was designed to help. Here's what you need to know: You'll use Form 8995 (the simple version, not 8995-A) along with your Schedule C. The calculation should be straightforward - 20% of your $45,000 business profit, so roughly $9,000 deduction. One tip that saved me headaches: double-check that all your business expenses are properly categorized on Schedule C first, because that directly affects your QBI calculation. Things like shipping supplies, Etsy fees, materials, and even a portion of your home workspace if you use it exclusively for business. Most tax software should handle this correctly, but if you're getting conflicting results between different programs, it might be worth having a tax professional review it once to make sure you're not missing anything. The peace of mind is often worth the cost, especially in your first year claiming QBI.

If ur parents still claim u as a dependent make sure to check that box when filing!!! I messed this up last year and both me and my parents got letters from the IRS cuz we filed conflicting returns. Total nightmare to fix

Definitely file! I was in almost the exact same situation my sophomore year - made about $5,200 working at the campus library. Even though you're not required to file with income under the standard deduction, you'll almost certainly get money back from any federal taxes that were withheld from your paychecks. Check your W-2 in box 2 to see what federal taxes were taken out - that's money you can get back! Plus, as a student, you might qualify for education credits even with low income. The American Opportunity Credit can give you up to $1,000 as a refundable credit. I'd recommend using one of the free filing options like IRS Free File or FreeTaxUSA since your situation is straightforward. Make sure you have your W-2 and your 1098-T form from your school (should be in your student portal). The whole process took me maybe 30 minutes and I got back around $400 that I wasn't expecting! Also definitely coordinate with your parents about whether they're claiming you as a dependent - you can still file and get refunds even if they claim you, but you need to mark the dependent box correctly to avoid issues with the IRS.

I've been through this exact situation with Credit Karma last year. My transcript showed a March 30th DDD but I actually got my deposit on March 28th around 11am. What I've learned from years of tax seasons is that no two experiences are identical - I've seen people with the same DDD get deposits up to 3 days apart. The IRS sends these in batches, and then each financial institution has their own policies about when they release the funds. Credit Karma is generally faster than traditional banks, but there's still variability even among CK customers.

Based on my experience with Credit Karma over the past few tax seasons, you should expect your refund to hit around March 26th or 27th. I've had a March DDD three times with CK and it's always been 1-2 days early. Last year my March 25th DDD actually deposited on March 23rd around 2pm. For your medical appointments, I'd suggest scheduling them for March 27th or later just to be safe. While CK is typically faster than traditional banks, there's always a small chance of processing delays. The good news is that March DDDs have been pretty consistent this year from what I've seen in the community. One tip: if you have the CK mobile app, turn on push notifications for deposits. That way you'll know the moment it hits your account rather than constantly checking your balance!

Great question about the 10% penalty vs. standard deduction! I went through this exact scenario two years ago during my career transition. You're correct that the $14,000 withdrawal would be covered by your $15,400 standard deduction, so $0 federal income tax. However, the 10% early withdrawal penalty ($1,400) is calculated separately on Form 5329 and added to your tax bill regardless of your income level or deductions. So yes, you'd still owe that $1,400 penalty even though your income is below the standard deduction threshold. The penalty isn't considered "income" - it's an additional tax that applies specifically to early retirement withdrawals. That said, after reading through all the excellent advice in this thread, I'd strongly recommend exploring the penalty exceptions before making your withdrawal. The medical expense exception mentioned earlier could be huge if you had any significant healthcare costs this year. Also, if you're planning any education during your sabbatical, those expenses might qualify for an exception too. Given the complexity and potential savings, a consultation with a tax professional familiar with early withdrawal strategies would probably pay for itself. There are clearly multiple angles to explore that could reduce or eliminate that $1,400 penalty entirely.

I've been following this discussion and wanted to add one more important consideration that could significantly impact your decision - the timing of when you actually take the distribution within your sabbatical year. If you're planning to take your sabbatical in 2025, you might want to consider splitting your withdrawal across tax years if possible. For example, taking $7,000 in December 2024 and $7,000 in January 2025. This way, each withdrawal stays well below the standard deduction in its respective tax year, and you'd only pay the 10% penalty on each portion (still $1,400 total, but gives you more flexibility). Also, something that hasn't been mentioned yet - if you're married and file jointly, your standard deduction is much higher ($30,800 for 2025). This could completely change your tax strategy if applicable to your situation. One last thought: consider whether you truly need all $14,000 at once. If you can get by with a smaller initial withdrawal and see how your sabbatical expenses actually play out, you might be able to reduce the total penalty by taking less. Sometimes we overestimate what we'll need when planning a career break. The combination of penalty exceptions discussed here plus strategic timing could potentially save you hundreds of dollars. Definitely worth mapping out with a professional before you pull the trigger!