Has anyone considered using a Solo 401k instead of a SEP IRA? When I was in your exact situation, I found that a Solo 401k let me contribute significantly more than a SEP IRA would.

Great discussion here! I'm in a similar situation with my freelance consulting income alongside my W-2 job. One thing I'd add is that if you're just starting out with retirement savings from self-employment income, don't get too caught up in optimizing between SEP IRA vs Solo 401k initially - the most important thing is to start saving something. That said, I did switch from SEP IRA to Solo 401k after my second year once I understood the benefits better. The Solo 401k does allow for much higher contributions, especially if your self-employment income is on the lower side. With my consulting bringing in about $35,000 last year, I was able to contribute the full $23,000 employee contribution plus about $6,400 employer contribution with the Solo 401k, versus only being able to do about $6,400 total with the SEP IRA. For anyone considering the switch, just make sure your provider supports Solo 401ks - not all do, and some charge higher fees than others.

Just to add my experience - I was in the EXACT same situation during college. Had work study all 4 years and didn't file until senior year when I got a proper internship. I talked to an accountant years later who said since I was owed refunds (not that I owed any tax), there was no penalty for filing late. Apparently the IRS doesn't penalize you for filing late if THEY owe YOU money! I ended up filing the old returns and got small refunds for each year. The whole process was pretty easy. If I were you, I'd file those old returns just to get closure and the small refunds you're probably entitled to.

Don't stress too much about this! You're definitely not alone - so many college students go through this exact same confusion about work study income and filing requirements. From what you've described, you were likely not required to file for those years since your earnings were well below the filing thresholds. Work study income is treated like regular W-2 wages, so the standard filing requirements apply. However, since you had federal taxes withheld (even those small amounts of $11 and $9), you were actually entitled to get that money back as a refund! The IRS doesn't charge penalties for filing late when they owe YOU money, but there is a time limit to claim refunds - generally 3 years from the original due date. For 2021, you'd have until April 2025 to file and claim that $11 refund, and for 2022, until April 2026 for the $9. It's not a huge amount, but it's money that's rightfully yours, and filing those returns would give you peace of mind. Also, don't forget to check your state filing requirements! Some states have much lower thresholds than federal, so you might need to file state returns even if federal wasn't required. You're being very responsible by looking into this now - better late than never!

7 Stupid question maybe - but why do we even have different rates for short vs long term gains? Seems needlessly complicated.

The different rates also help account for inflation over longer holding periods. When you hold an investment for several years, some of your "gain" is just due to general price increases in the economy, not real investment growth. The lower long-term rate partially compensates for this inflation effect. Additionally, there's an economic argument that capital gains shouldn't be taxed as heavily as ordinary income since the money used to make the investment was likely already taxed when it was earned as wages or business income. The preferential rate recognizes this "double taxation" aspect. For your specific situation with $7,500 short-term and $12,300 long-term gains, you'll save about $861 in taxes compared to if everything were taxed as ordinary income (22% vs 15% on the long-term portion). That's a pretty significant benefit for holding those investments over a year!

Does anyone know if coffee meetings count as "business meals" too? I meet a lot of clients for coffee rather than full meals.

Great question! As someone who's been self-employed for 5 years, I learned this the hard way after my first audit. The IRS uses a "primary purpose" test - the main reason for the meal must be business-related. Here's my simple system that's worked through two audits: 1. **Immediate documentation** - I use my phone to create a quick note right after the meal with: attendee names, their business relationship to me, and 1-2 sentences about what we discussed 2. **Receipt management** - Take a photo of the itemized receipt and store it in a dedicated folder (I use Google Photos with a "Business Meals" album) 3. **Calendar entries** - I add the business purpose to my calendar appointment for that meeting The key is being consistent and documenting everything at the time it happens, not months later. During my audits, the IRS agents specifically looked for contemporaneous records - meaning documented close to when the expense occurred. And no, you definitely can't just invite friends and briefly mention business. The IRS will look at patterns - if you're claiming every social meal as business, that's a red flag. The business discussion needs to be substantial and the primary purpose of getting together.

Something important nobody mentioned yet - if you're getting a tax refund for this year and file for bankruptcy, the trustee can take that refund and distribute it to creditors! I lost a $3,200 refund I was counting on when I filed Chapter 7 last year. Talk to your lawyer about timing if you're expecting a refund.

Don't forget that filing bankruptcy triggers a tax audit almost automatically. The IRS gets notified of all bankruptcy filings and often reviews unfiled returns or suspicious items. Make SURE you've filed all required tax returns before starting bankruptcy!