Everyone's talking about the tax implications but nobody mentioned the withholding! When my company got acquired, they withheld at a flat 22% which wasn't enough for my tax bracket. I got absolutely destroyed the next April with a huge tax bill plus underpayment penalties. Make sure your employer is withholding enough or set aside like 35-40% of the payout for taxes depending on your bracket. Seriously, the surprise tax bill was devastating.

This is exactly the situation I'm dreading. My acquisition is closing in about 6 weeks and I've been assuming the company would handle withholding properly. I'm definitely in a higher bracket than 22% when you add this payout to my regular salary. Did you end up having to make quarterly estimated payments to avoid penalties in future situations? I'm wondering if I should proactively send estimated payments to the IRS once I know the exact payout amount, rather than waiting until next April and getting hit with underpayment penalties on top of everything else. Also, for anyone else reading this - definitely worth running the numbers on what tax bracket you'll be in with the additional income. A $65K payout could easily push someone from the 22% bracket into 32% or even higher depending on their regular salary and filing status.

Has anyone here dealt with investing in a startup through a SAFE agreement (Simple Agreement for Future Equity)? I did that last year and I'm confused about whether I need to report anything on my taxes yet or if that only happens when the SAFE converts to actual equity.

Great question! I went through something similar when I made my first angel investment. The good news is that your initial $13k investment isn't reportable on your 2025 tax return - you're basically just buying an asset at this point. You'll only need to report something when there's a "taxable event" like: - The company pays you dividends - You sell your shares back to the company - The company gets acquired and you receive proceeds - The company goes public and you sell shares When that happens, you'll report it as a capital gain/loss using your $13k as the cost basis. If you held the investment for more than a year, it qualifies for long-term capital gains treatment (which has better tax rates). TurboTax can absolutely handle this when the time comes. The acquiring company or your investment platform should send you the proper tax forms (usually a 1099-B for sale proceeds). My advice: Create a folder now with all your investment documents (agreements, proof of payment, etc.) so you have everything organized when you eventually need to report the sale. Good luck with the investment!

I work in payroll and see this confusion all the time. Stock options and RSUs trigger mandatory supplemental income withholding rules. The 45% you're seeing is actually the correct combined withholding when you add up ALL the different taxes: Federal supplemental rate (22%) + State supplemental rate (varies, but often 9-13% for higher income states) + FICA (7.65%) + Additional Medicare Tax if applicable (0.9%) + Local taxes where applicable + Any mandatory retirement withholding your company might have. Many employees think they're being overtaxed, but this is actually protecting you from owing a large sum when you file your return. The alternative would be underwithholding, leading to a surprise tax bill plus possible penalties.

This is definitely frustrating, but unfortunately that withholding rate is pretty standard for stock compensation. I went through the same shock when I exercised my options last year. The key thing to understand is that stock options are treated as "supplemental income" which has different withholding rules than your regular salary. Even though you're normally taxed at 24%, supplemental income gets hit with: - 22% federal supplemental rate (flat rate regardless of your normal bracket) - 6.2% Social Security tax - 1.45% Medicare tax - Your state income tax rate (which can be substantial) - Possibly local taxes depending on where you live When you add all those up, 45% total withholding is actually pretty typical, especially if you're in a state with higher income taxes. The silver lining is that this is just withholding - not your actual tax liability. When you file your return next year, you'll calculate what you actually owe based on your total income for the year. If they over-withheld (which they probably did), you'll get the excess back as a refund. I'd recommend getting a detailed breakdown from your payroll department so you can see exactly where that 45% went. It should all add up to legitimate tax withholdings.

I can see there's been a lot of confusion around this topic, but everyone here is absolutely correct - the unemployment exclusion was only for 2020. As someone who works in tax preparation, I want to emphasize a few key points for anyone else reading this thread: 1. The $10,200 unemployment exclusion was a one-time COVID relief measure that applied ONLY to unemployment received in 2020 2. For 2023 unemployment benefits, report the full amount from Box 1 of your 1099-G 3. If taxes were withheld (Box 4 of the 1099-G), those will be credited toward your tax liability 4. Ohio follows federal tax treatment, so no special state considerations needed @Jordan Walker - you're safe to file now. There's no benefit to waiting, and you might be missing out on getting your refund sooner. The tax software will handle this correctly when you enter your 1099-G information.

Just wanted to add my experience as someone who also received unemployment in 2023. I initially made the same mistake of thinking there might be an exclusion available, but after researching thoroughly, I can confirm what everyone else has said - the $10,200 exclusion was definitely only for 2020. I ended up owing about $800 in additional taxes on my unemployment benefits, but fortunately I had some tax withheld during the year which helped. One tip: if your fiancé didn't have taxes withheld from his unemployment payments, you might want to set aside some money now or consider making an estimated payment to avoid owing too much at filing time. The good news is that once you file, you'll have certainty instead of wondering. And if you're due a refund from other sources, filing sooner means getting that money back faster. Don't let the confusion around old COVID rules delay getting your taxes done!

I think everyone already explained the deduction part well, but one IMPORTANT thing: You have to choose between standard mileage rate OR actual expenses in the first year you use the car for business. After that, if you used standard mileage the first year, you can switch between methods each year. But if you use actual expenses the first year, you're STUCK with that method for the life of that vehicle. Just something to keep in mind when making your decision!

This is such a common misconception that trips up so many new rideshare drivers! Your husband is absolutely right - you don't get the deduction amount back as cash. Think of it this way: if you made $30,000 driving for Lyft and have $22,900 in mileage deductions, you only pay taxes on $7,100 of income ($30,000 - $22,900). The deduction saves you money by reducing what you owe, but it's not a dollar-for-dollar refund. One more thing to consider - as a rideshare driver, you're self-employed, so you'll also need to pay quarterly estimated taxes throughout the year. The IRS expects you to pay as you earn, not just at year-end. With significant mileage deductions, your actual tax liability might be lower than you think, but don't forget about self-employment tax (Social Security and Medicare) which is about 15.3% on your net earnings. Keep detailed mileage records - the IRS is strict about documentation for vehicle deductions. A simple mileage log with date, starting/ending odometer readings, and business purpose is usually sufficient.