Sorry if this is a dumb question, but will my Medicare tax rate increase as I earn more? My friend mentioned something about an "additional Medicare tax" for higher income people?

Just wanted to share my experience as someone who was in your exact same situation a few years ago! When I first saw Medicare tax being deducted from my paycheck while also paying for my employer's health insurance, I thought there was some kind of mistake. What really helped me understand it was thinking of Medicare tax like car insurance vs. life insurance - they're both insurance, but they cover completely different things at different times. Your BCBS covers you right now for doctor visits, prescriptions, etc. Medicare tax is like putting money into a piggy bank that you can't touch until you're 65 (or qualify due to disability). The key thing that clicked for me was realizing that Medicare isn't just health insurance - it's a government program that provides healthcare for elderly and disabled Americans. So when you pay that 1.45%, you're contributing to a system that takes care of millions of people who can no longer work or afford private insurance. It's definitely frustrating to see money leave your paycheck for something you can't use right now, but think of it as investing in your future self. When you're 65, you'll be really glad this system exists!

Question for anyone who's done this - does grouping require amending previous returns? I'm in a similar situation with a property LLC and operating business, and filed separately for the last two years.

This is exactly the kind of situation where activity grouping can be a game-changer! Since you have common ownership of both LLCs and clear operational interdependence (PropCo exists primarily to serve OpCo), you should have a strong case for grouping. The key thing to remember is that once you group these activities and you materially participate in the restaurant business, the entire grouped activity becomes non-passive. This means those $78,000 in historic rehabilitation credits would no longer be trapped as passive credits - you could use them against your restaurant income or even your wife's non-passive income. Make sure to document the business reasons for grouping (shared management, operational interdependence, common ownership) in your election statement. Given the substantial credits at stake, it might also be worth getting a second opinion from a tax professional who specializes in passive activity rules before making the election, just to ensure you're maximizing the benefit and meeting all requirements.

One option nobody mentioned is just alternating bill payments. My roommate and I stopped sending each other money completely. I pay electricity and internet, she pays water and streaming services. We calculated it all out so it's roughly even. No money transfers needed = no 1099-K issues.

Guys I think everyones overthinking this. The $600 threshold is for BUSINESS payments. Unless your gf is running a business and you're paying her as a client, you're fine. Just mark everything as personal payments in cashapp. And keep basic records showing these are shared expenses just in case.

Random question - do robo advisors like Wealthfront or Betterment handle 5500-EZ filing for solo 401ks? I'm approaching that $250k threshold and wondering if I need to switch providers.

Your friend definitely needs to take responsibility here instead of blaming the broker. The 5500-EZ is a plan administrator duty, which for solo 401(k)s means the business owner (your friend) is responsible. Here's what your friend should do immediately: 1. Stop wasting time being angry at the broker 2. Determine exactly which years he missed filing (any year his plan assets exceeded $250k on Dec 31) 3. Use the IRS Delinquent Filer Voluntary Compliance Program (DFVCP) to self-report and get reduced penalties 4. File all missing 5500-EZ forms ASAP The voluntary compliance program can reduce penalties from $250/day (max $150k per form) down to as little as $750 per late form for solo plans. But this only works if he acts before the IRS discovers the missing filings. This is a pretty common mistake for people who don't realize the filing requirement kicks in automatically when assets hit the threshold. Better to fix it now than wait for IRS notices!

25 Does the Child Tax Credit affect how much you get back from the Earned Income Credit? I'm a single mom with 2 kids making about $22,000 a year and want to maximize my refund.

Just to clarify something that might help others - there's actually been some changes to the Child Tax Credit over the years that can cause confusion. For 2024 tax year (filing in 2025), the credit is $2,000 per qualifying child under 17, with up to $1,700 being refundable through the Additional Child Tax Credit. The key point everyone's made is correct - no minimum income required for the Child Tax Credit itself. But if you have very low or no income, you'll mainly benefit from the refundable portion (up to $1,700 per child). The non-refundable portion can only offset actual tax liability. Make sure your children have valid Social Security Numbers (not ITINs) to qualify for the full credit. Also, with your income under $10,000, you should definitely file a return even if not required to - that's the only way to get the refundable portion back as a refund.