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Does anyone know if bonuses are treated differently for Social Security tax purposes? I'm getting a $40k bonus in December and I'll have already earned about $155k in regular salary by then.
Bonuses are treated the same as regular wages for Social Security tax purposes. They're included in your total earnings that are subject to the $168,600 limit. In your case, if you've earned $155k in regular salary and then get a $40k bonus, only $13,600 of your bonus would be subject to Social Security tax (to reach the $168,600 limit). The remaining $26,400 of your bonus would be exempt from the 6.2% Social Security tax, though it would still be subject to Medicare tax.
Great question about the 2025 Social Security tax maximum! Just to add some additional context to what others have shared - the $168,600 wage base limit is set by the Social Security Administration and applies to all earned income, including salary, wages, bonuses, and self-employment income. One thing that catches people off guard is that if you have multiple jobs throughout the year, each employer withholds Social Security tax independently without knowing about your other income sources. This can result in overpayment, but as others mentioned, you can claim the excess as a refund when filing your return. Also worth noting: if you're self-employed in addition to having W-2 income, the limit applies to your combined earnings. So if your W-2 wages already reach the $168,600 threshold, you won't owe Social Security tax on your self-employment income (though you'll still owe Medicare tax). The annual adjustments to this limit have been pretty substantial lately - it jumped from $147,000 in 2022 to $168,600 in 2025, so it's definitely worth keeping track of if you're in that income range!
Went through this last year and let me tell you, it's like the IRS version of dating - just when you think they're ghosting you, they text back! š But seriously, watch out for what happened to me: status changed to processing, I got excited, then BAM - got hit with the dreaded 60-day review letter two weeks later. Apparently my employer submitted my W-2 with a typo in my SSN. The moral of this tragic tax tale: even when it goes back to processing, keep checking your transcript for codes 570/971 which might indicate additional reviews. Not trying to be a downer, just saying don't celebrate until you see that 846 refund issued code!
This happened to me too! I thought I was in the clear after verification, then got slapped with a 120-day review. Called in and found out someone had filed a fraudulent return using my SSN earlier in the season. Took forever to resolve.
I'm going through this exact situation right now! Filed early February, got stuck in ID verification hell for about 10 days, and just switched back to processing yesterday. Reading through everyone's experiences here is actually really reassuring - sounds like this status change is generally a good sign that things are moving forward. For those asking about transcripts showing N/A - mine is still showing that too, but from what I'm reading here it sounds like that's normal during this transition period. I'm going to try to be patient and check again in a few days. @Melina Haruko - thanks for starting this thread! The PCS timing stress is real. We're military too and have had our fair share of verification delays over the years. Fingers crossed we both get some movement soon!
Welcome to the waiting game club! I'm a newcomer here but going through the exact same thing. Filed in late January, got the ID verification page for about 12 days, and it just switched to processing status yesterday morning. Reading through all these experiences is honestly the most helpful information I've found anywhere - way better than the vague IRS website updates. It's reassuring to see that most people are getting their DDDs within 1-3 weeks after this status change. The military PCS timing adds extra stress for sure, but it sounds like we're on the right track now. Keeping my fingers crossed for all of us waiting!
Everyone's giving good advice about claiming a domestic partner, but don't forget to consider the future! When your partner finishes law school and starts working, your tax situation will change dramatically. My wife and I were in the same boat (I supported her through med school), and we actually ended up paying MORE in taxes after marriage because of the marriage penalty when both people have good incomes.
Just wanted to chime in as someone who works in tax preparation - you're on the right track! Based on your description, your domestic partner would likely qualify as a "qualifying relative" dependent. The key things to document are: 1. Keep receipts for all the expenses you're paying (rent, utilities, groceries, phone, insurance) 2. Get a statement of his total student loan disbursements for the year 3. Track any income he earns from tutoring or other sources Since you mentioned he only makes about $2,500 from tutoring and the loans only cover tuition/books while you handle all living expenses, you should easily meet both the income test (under $5,000) and the support test (you're providing more than 50% of total support). One thing I always tell clients - calculate the actual dollar amounts to be sure. Add up everything: tuition, books, rent, food, utilities, transportation, clothing, medical expenses, etc. Then make sure your contributions are more than half of that total. It sounds like they definitely are, but having the numbers documented will give you confidence and protection if questions ever arise. The dependent exemption can be a significant tax benefit, so it's worth claiming if you qualify!
This is really helpful advice! I'm new to all this tax stuff and wasn't sure what kind of documentation I'd need to keep. Should I be saving receipts from grocery stores and utility bills throughout the year, or is there a simpler way to track all these expenses? Also, when you say "calculate the actual dollar amounts," do you mean I need to estimate things like the fair market value of housing I'm providing, or just track what I'm actually paying out of pocket?
I've heard that the EITC is different for each tax year because of inflation adjustments. Does anyone know what the threshold was for 2021? I'm trying to figure out if I should amend my return.
For 2021, the threshold for singles with no kids was usually $15,980, but there were special expanded rules because of COVID relief. The age range was 19-64 (instead of the usual 25-64) and I think the max income was around $21,430 for singles with no qualifying children. It was a one-time expansion just for 2021.
Thanks for the info! I might have qualified under those expanded rules. Definitely going to look into amending my 2021 return now.
Just wanted to add some context about why you might be behind on your taxes - the IRS has been dealing with massive processing delays, especially for amended returns. Your February 2022 amended return not getting processed until December 2022 is unfortunately pretty typical of what many people experienced during that period. For your current situation, as others have mentioned, you're just over the 2022 EITC threshold. But definitely keep those expanded 2021 rules in mind that @Freya Pedersen mentioned - if you were between 19-24 in 2021, you might have qualified under the special COVID provisions even if you didn't think you were eligible at the time. The income limits were much higher that year, so it's worth double-checking your 2021 situation. Also, make sure you're calculating your AGI correctly. Your AGI should generally be close to your earned income if you're just filing a basic return with W-2 income. If there's a big difference between your W-2 wages ($13,100) and your calculated AGI ($16,800), you might want to double-check that calculation or see if there are other income sources you forgot about.
Elijah Brown
Has anyone used their home gym for both in-person training clients AND filming content for online coaching? I'm wondering if I can write off the entire room as a home office if it's used for both purposes?
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Maria Gonzalez
ā¢I do exactly this! I use my home gym for 1-on-1 clients and filming workout content. My tax guy said I can deduct the square footage of that room as a home office since it's used exclusively for business. But you CANNOT use that space for personal workouts at all or it disqualifies the entire deduction. I literally have a separate area in my basement with a few dumbbells for my own workouts to keep everything clean for tax purposes.
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QuantumQuester
Great question! I'm in a similar situation - planning to launch my personal training business early next year but want to get my equipment sorted now. From what I've researched, the key is showing "active preparation" for your business launch. One thing I'd add to the excellent advice already given - consider getting your business license and EIN now if you haven't already. Even if you're not actively earning revenue yet, having these official documents helps establish your business intent timeline for the IRS. Also, I'd recommend creating a detailed business plan that includes your equipment needs and how each piece will be used for client training. This documentation becomes really valuable if you ever get questioned about the business purpose of your purchases. Keep in mind that if you're buying higher-value equipment (like a $3,000 home gym setup), you might want to spread some purchases into 2025 to maximize your deduction benefits across tax years. Good luck with the launch!
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