Is anyone else confused about the different tax rates for bonuses? My bonus got taxed at like 40% it felt like! Way more than my regular paycheck. Something about a "supplemental tax rate"?

I had a very similar issue last year! Turns out my bonus was actually included in my W-2, but I was looking at it wrong. Here's what helped me figure it out: First, grab your final paystub from December and compare the year-to-date totals to your W-2. They should match exactly. If your paystub shows $162k YTD but your W-2 Box 1 shows $135k, look at Box 12 on your W-2 for codes like D (401k contributions), C (health insurance premiums), or other pretax deductions. Also, bonuses are often subject to supplemental wage withholding at a flat 22% rate, which might make the net amount you received feel smaller than expected, but the full gross amount should still appear in your total wages. If the numbers still don't add up after accounting for pretax deductions, definitely contact your payroll department. Sometimes smaller companies do make mistakes with bonus reporting, especially if they're not used to handling them regularly.

I'm probably going against the crowd here, but TurboTax has always been super easy for me even as a first-time filer years ago. Yes it costs more than FreeTaxUSA but the interface is really user friendly. They walk you through federal and then state automatically, importing all relevant info from federal to state.

For your first time filing, FreeTaxUSA is definitely a solid choice! You'll do federal and state separately, but like others mentioned, the info carries over so you're not starting from scratch twice. Regarding payment options - if your debit card is acting up, you can usually pay the FreeTaxUSA service fee directly from your bank account using your routing and account numbers (same info you'd use for direct deposit). Most banks also let you pay bills online through their bill pay service if you want to avoid entering card info. One thing I learned my first year: don't stress too much about making mistakes. The software catches most common errors, and even if something small slips through, it's usually easily fixable. The IRS isn't out to get you - they just want their forms filled out correctly. You've got this!

I feel your frustration! I went through something similar with my state refund last year - it was stuck in "pending review" for 6 weeks with absolutely no communication from the state. What finally worked for me was filing a formal inquiry through my state's taxpayer advocate office. Most states have this service now (similar to the federal IRS Taxpayer Advocate). You can usually find the contact info on your state's department of revenue website under "taxpayer rights" or "taxpayer advocate." They have more authority to actually look into your case and get answers. In my situation, they discovered my return was flagged because I had moved states the previous year and it triggered an automatic review. Once the advocate got involved, my refund was released within 10 business days. It's worth noting that many states are still dealing with staffing shortages from the pandemic, which is why processing times are so unpredictable this year. Hang in there - your money will come through!

I'm going through the exact same thing right now! Filed my state return on February 28th and it's been stuck on "pending review" for over 3 weeks. What's really annoying is that my federal refund came through in just 10 days, so clearly there's nothing wrong with my information. I called my state's tax line last week and after being on hold for 45 minutes, the representative basically told me "reviews take as long as they take" and couldn't give me any timeline. It's so frustrating when you're expecting that money and they just leave you hanging with zero communication. Has anyone had luck with contacting their state representative's office about tax delays? I'm wondering if that might get more attention than the regular customer service channels.

Has anyone actually been audited by the IRS over a family loan with the wrong interest rate? I'm loaning my sister $30k and don't want to deal with all this AFR stuff but also don't want to get in trouble.

I went through this exact situation last year when I loaned my daughter $50,000 for her business. Here's what I learned from my tax attorney: For a 6-month loan, you definitely need the short-term AFR rate. Since you're getting paid back in one lump sum at the end, use the semi-annual compounding rate from the IRS Revenue Ruling published for the month you make the loan. The key thing everyone misses is that you MUST actually charge and collect the interest, not just put it on paper. I made the mistake of "forgiving" the interest at the end, and my CPA told me that could still trigger gift tax issues since I was essentially giving her the interest amount. Also, make sure your loan agreement includes a specific maturity date, not just "about 6 months." The IRS wants to see definite terms. I used a simple promissory note template but had it notarized just to be extra safe. One more tip: if your brother can't pay the full amount back at 6 months, don't just verbally extend it. You'll need to formally modify the loan agreement or it could look like you're just gifting money with extra steps.

Great question! I just went through this exact situation last year when I started my print-on-demand business. Here's what I learned: You're absolutely right that this makes you self-employed. The key thing to understand is that you'll need to file Schedule C (business income/expenses) and Schedule SE (self-employment tax) along with your regular 1040. Regarding PayPal and 1099-K forms - yes, both PayPal and TeePublic should send you 1099-K forms if you exceed $600 in transactions for the year. However, you're required to report ALL income regardless of whether you receive these forms or not. Here's my biggest tip: start keeping detailed records immediately! Track every penny of income and every business expense. Business expenses you can deduct include: - Design software subscriptions - Computer/equipment used for business - Portion of internet/phone bills - Marketing costs - Any business-related courses or books Also, set aside about 25-30% of your profits for taxes since nothing is being withheld automatically. You may need to make quarterly estimated tax payments if you expect to owe more than $1,000 in taxes. Consider using a simple accounting app like Wave (free) or QuickBooks Self-Employed to track everything. It makes tax time so much easier! Feel free to ask if you have more specific questions - happy to help a fellow entrepreneur!

Just wanted to add something that might help since I've been doing print-on-demand for about a year now - make sure you understand the difference between gross income and net profit when it comes to taxes! When TeePublic sends you that 1099-K, it will show your total sales (gross income), but you only pay taxes on your actual profit after expenses. So if you made $5,000 in sales but had $2,000 in legitimate business expenses, you only pay taxes on the $3,000 profit. This is why tracking expenses is so crucial - it can significantly reduce your tax burden. Don't forget about less obvious deductions like: - Packaging materials if you ship anything yourself - Photography equipment/props for product photos - Business cards or promotional materials - Even mileage if you drive to buy business supplies One more thing - consider getting an EIN (Employer Identification Number) from the IRS even if you're a sole proprietor. It's free and makes you look more professional when setting up business accounts. Plus some payment processors prefer it over using your SSN. Good luck with your clothing design business! The tax stuff seems overwhelming at first but gets easier once you establish good record-keeping habits.