One more thing - did your 1099-INT from Robinhood have any entries in Box 2 (Early withdrawal penalty)? I'm also an NRA and noticed that even though the interest itself is exempt, if there are any early withdrawal penalties, those are handled differently.

I want to add something important that hasn't been mentioned yet - make sure you have the proper documentation to support the NRA exemption. Even though the interest is generally exempt, you should keep records showing your non-resident status. If Robinhood didn't have your proper tax status on file (Form W-8BEN), they might have withheld taxes at 30%. In that case, you'd actually need to file Form 1040NR to get a refund of the overwithholding, even though the underlying interest income isn't taxable. Also, double-check that your 1099-INT specifically shows interest from bank deposits versus money market funds. While both are typically exempt for NRAs, the specific exemption sections are different and it's good to understand exactly which applies to your situation.

I actually had this exact situation come up in an audit a few years ago. I'm also in real estate in a sunny state (Nevada) and claimed similar polarized sunglasses as a business expense. The IRS agent focused on three main things: 1) Could I prove these were primarily for business use, 2) Were they substantially different from personal sunglasses I might buy anyway, and 3) Was the cost reasonable for the business purpose. What saved me was having documentation showing I already owned regular sunglasses for personal use, plus I had photos of me wearing the business ones during property showings and client meetings. The polarization feature was key - I could demonstrate it was specifically needed for reducing glare when showing properties with large windows or outdoor spaces. The $275 cost was actually fine because I could show similar professional-grade polarized glasses in that price range. Just make sure you can articulate the specific business need beyond general sun protection. Keep detailed records of when and how you use them for work.

This is really helpful info everyone! I'm feeling more confident about claiming these now. Based on what Tony and Niko said, I think I have a decent case since I'm 1099 and can document the business necessity. I already have regular sunglasses for personal use, so these $275 polarized ones are exclusively for work. The polarization really does make a huge difference when driving clients around - especially when we're looking at properties with lots of glass or near water where the glare is intense. I'm going to document the specific features (polarization, UV protection, anti-glare coating) and keep a log of business use. Maybe I'll even take some photos like Tony suggested showing me using them during property showings. Thanks for the real-world audit experience - that's exactly what I needed to hear! Going to claim them as a business expense and keep really detailed records in case it ever comes up. Appreciate everyone's help with this!

Quick question - what if both my jobs had exactly the same employer but paid me with different W2s? My company split into two entities mid-year but it's basically the same company. Would they still over-withhold or should they have coordinated since it's technically the same employer?

This happened to me a few years back and I can totally understand the panic! Just to reinforce what others have said - you're absolutely right that you've overpaid, and no, your employers don't need to correct anything on their W2s. One thing I learned the hard way: make sure to keep good records of this for next year if you're still working multiple jobs. I now track my Social Security wages throughout the year so I can ask one employer to stop withholding once I hit the limit. It's not required, but it helps with cash flow instead of waiting for the refund. Also, double-check that both W2s show the correct Social Security wages in Box 3 and Social Security tax withheld in Box 4. Sometimes there are errors there that could affect your calculation. Your total overpayment should be the amount over $9,932.40 for 2023, which sounds like it's around $5,073 based on your numbers - that's a nice refund!

Quick question for anyone who's been through this - we're currently a partnership LLC making about $300k per year (split three ways). If we switch to S-Corp status, does each member have to take the same salary? Or can we customize based on how much each person actually works in the business?

Based on your $175K total income split three ways (~$58K each), you're right at the threshold where S-Corp election might start making sense, but it's borderline. Here's a simple way to think about it: **Partnership (current status):** - Each partner pays self-employment tax (15.3%) on their full $58K share = ~$8,874 per person in SE taxes - Simple tax filing, minimal compliance costs **S-Corp election:** - Each of you would need a "reasonable salary" (probably $35-40K given your roles) - SE taxes only on salary portion, not on remaining distributions - Potential savings: ~$3,000-4,000 per person annually - BUT: Additional costs for payroll processing, more complex tax returns, corporate compliance **My recommendation:** Stay as partnership for now. Your potential tax savings would likely be eaten up by the additional compliance costs and complexity. Once you're consistently over $250-300K total (so each partner is taking home $80K+), then revisit the S-Corp election. The beauty is you can always change later when the numbers make more sense. Focus on growing the business first!

Great question about 401(k) interactions! This is actually a really important consideration that most people aren't thinking about yet. From what I understand about current retirement plan rules, 401(k) contribution limits are typically based on "compensation" as defined by the IRS, which generally includes all wages subject to income tax withholding. If overtime pay becomes federally tax-exempt, it would likely still count as compensation for retirement plan purposes - similar to how Roth IRA contributions are made with after-tax dollars but still count toward income limits. However, the percentage-based contribution calculations could get tricky. If your plan automatically deducts a percentage of your gross pay, you'd want to make sure that percentage is being applied to your full wages (including tax-exempt overtime) rather than just your federally taxable income. Otherwise, you might inadvertently reduce your retirement contributions. This is definitely something employers and plan administrators will need to figure out in their system configurations. I'd recommend checking with your HR department once any legislation actually passes to understand how your specific plan would handle it.

This is a really thorough discussion! As someone who works in HR benefits administration, I wanted to add a few practical considerations that employers are already starting to think about: 1) **Timekeeping complexity**: Companies will need to ensure their time tracking systems can clearly distinguish between regular hours and overtime hours for tax purposes, not just pay calculation purposes. This might require system upgrades for many employers. 2) **Multi-state complications**: For employees who work in multiple states or companies with locations across state lines, tracking which overtime is subject to which state's tax rules could become quite complex. 3) **Audit implications**: The IRS will likely scrutinize overtime classifications more closely, so companies will need to be extra careful about properly documenting what constitutes legitimate overtime versus regular hours. 4) **Potential for abuse**: There might be pressure to restructure jobs or schedules to maximize tax-exempt overtime, which could lead to some unintended workplace dynamics. The implementation timeline will be crucial - payroll systems, HR policies, and accounting procedures will all need significant updates. Most proposals I've seen suggest at least a 6-month implementation period, but even that might be tight for larger organizations with complex payroll systems.