I went through exactly this transition last year! Left my SEP open with the existing money and started a 401k when I brought on employees. One thing to watch for - make sure you properly document the termination of new contributions to the SEP (even though there's no formal closure). I kept a corporate minute in my company records noting the board decision to freeze the SEP and establish the new 401k. My accountant said this creates a clear paper trail if there's ever a question about why we stopped SEP contributions for the business.

Great question! I actually went through a similar transition when my consulting business grew. You're on the right track - you can absolutely leave your existing SEP IRA open with the current funds and simply stop making new contributions when you switch to the 401(k) plan. Since you'll have employees in 2025, continuing SEP contributions would require you to contribute the same percentage for all eligible employees, which gets expensive fast. The 401(k) route gives you much more flexibility with different contribution levels and employee matching options. One practical tip: when you set up the new 401(k), check if the plan allows incoming rollovers from IRAs. If so, you might want to roll your SEP funds into the 401(k) to consolidate everything in one place. This can also help if you ever want to do backdoor Roth conversions later, since having money in traditional IRAs complicates that strategy due to the pro-rata rule. The transition timing is perfect since you're doing it at the start of a new tax year. Just make sure your 401(k) plan document is properly drafted to handle the contribution types you want (employee deferrals, employer matching, profit sharing, etc.).

Don't forget to check your state tax rules too! Some states have different rules for gambling deductions than federal. For example, here in NJ, we can deduct gambling losses up to the amount of winnings even if we take the standard deduction on our federal return. But across the river in NY, they follow the federal rules and require itemizing. It can make a HUGE difference depending on where you live!

Really appreciate all the detailed advice here! I'm dealing with a similar cross-year situation and the session tracking approach sounds like a game-changer. One thing I'm wondering about - for those casual poker nights with friends that Wesley mentioned, how do you handle documentation when there's no formal record? I play in a regular home game where we just settle up with cash at the end of the night. Should I be asking everyone to sign something or just keep my own detailed log of buy-ins and cash-outs? Also, does anyone know if the IRS has specific guidance on what constitutes "adequate records" for informal gambling? I want to make sure I'm covering myself properly since these home games make up a big chunk of my gambling activity.

Great question! I was in almost the exact same situation last year - my husband has a small business and I work a regular W-2 job. We switched from filing separately to jointly and saved about $2,800. The key things that helped us were: the higher standard deduction for joint filers, better tax brackets on our combined income, and access to education credits we couldn't get filing separately. Plus, his business qualified for the QBI deduction which worked out better with our joint income. One thing to watch out for - if your wife's business has any irregular expenses or potential audit issues, filing jointly does mean you're both liable for any problems. But for most legitimate businesses, this isn't a real concern. I'd definitely recommend running the numbers both ways before deciding. Most tax software will let you see both scenarios before you file. In your income range, joint filing usually comes out ahead unless there are some unusual circumstances.

I've been following this thread with interest since my situation is very similar! My spouse runs a small graphic design business as a sole proprietor, and we've been filing separately for the past three years thinking it would protect my income from any potential business issues. After reading all these responses, I'm realizing we might be leaving money on the table. The QBI deduction discussion was especially eye-opening - I had no idea that could work differently with joint vs separate filing. One question I haven't seen addressed yet: if we decide to switch to joint filing this year, do we need to amend our previous returns too, or can we just start fresh with this year's return? Also, are there any deadlines we should be aware of for making this decision? Thanks to everyone who's shared their experiences - this has been incredibly helpful for those of us navigating business ownership within a marriage!

Something no one's mentioned yet - as a full-time student with self-employment income, you might qualify for the American Opportunity Tax Credit or Lifetime Learning Credit. These education credits can significantly reduce your tax bill!

As someone who's been tutoring for a few years now, I can confirm everything others have said about this being self-employment income. One thing I wish I'd known earlier - keep a simple spreadsheet tracking each tutoring session with date, student name (or initials for privacy), hours worked, and amount paid. This makes tax filing SO much easier. Also, since you're making good money from tutoring, consider setting aside about 25-30% of each payment in a separate savings account for taxes. Between federal income tax and self-employment tax, you'll owe a decent chunk. Having it already saved prevents the shock at tax time! The Roth IRA opportunity is huge - definitely take advantage of that. Starting retirement savings in college puts you way ahead of most people. You can contribute for 2023 until the tax filing deadline (usually April 15th), so you still have time to make that contribution if you want.

I've seen this happen multiple times with clients (I'm not a tax pro, just experienced with these issues). Here's what could be happening: • Your tax preparer didn't set up a refund transfer • Your name change is causing verification issues • SBTPG's system hasn't updated yet • The IRS is sending your refund directly to your bank I'm always skeptical when people say "don't worry about it," because these issues CAN cause delays. But in this case, if your transcript shows code 846, your money is definitely on the way somewhere. Check your bank account first before panicking.

I went through something similar after my name change! The good news is that if your transcript shows the refund approved with code 846, your money is definitely coming. SBTPG only handles refunds when you specifically chose to have your tax prep fees deducted from your refund - if you paid your preparer directly, there wouldn't be an SBTPG account at all. The name change issue is real though - I had to update my name with Social Security first, then it took a few weeks for all the systems to sync up. Check your bank account on the direct deposit date from your transcript. If it doesn't show up there, then you know the refund went through SBTPG and you'll need to contact them about the name mismatch.