That's a great point. I've been ignoring my credit card statements because they stress me out, but that's obviously making things worse. Have you had any personal experience with these hardship programs? I'm wondering how understanding they actually are.

I went through this myself during 2020. I called all three of my credit card companies - two offered to reduce my interest rate by about half for 6 months, and one actually gave me a 3-month payment pause without additional interest accumulating. The key is to call before you miss payments. They're much more willing to work with you if your account is still in good standing. Be prepared to explain your situation briefly and have a specific request in mind. Sometimes they'll offer options right away, but other times you need to directly ask "Do you have any hardship programs available?" or "Can you reduce my interest rate while I get back on track?

Adding to this - if you do find a medical collection, call the collection agency and ask for "debt validation" before you pay anything. They're required by law to prove the debt is yours. I've had medical bills dropped completely because they couldn't provide proper documentation.

Thank you for mentioning this. I honestly hadn't even thought about the medical deduction angle. Between his cancer treatments and my surgeries, we easily spent over $15,000 out of pocket even with insurance. Do things like hospital cafeteria meals and parking at medical facilities count too? I had so many appointments and hospital stays.

Yes, many of those related expenses do count! Transportation costs to and from medical treatments (including parking fees at hospitals and medical facilities) are deductible. While regular meals generally aren't deductible, if you had to stay overnight for medical care, some meal costs might qualify. Also track any home modifications made for medical reasons, medical equipment purchases, and even mileage driven to pharmacies and doctor appointments. The IRS allows 22 cents per mile for medical travel in 2024. Many people miss these "secondary" medical expenses that can really add up over a year of intensive treatment.

That won't help in this case. OP specifically mentioned they don't have any children/dependents, so they wouldn't qualify for the Qualifying Widow(er) status in future years.

I actually just dug through my pay stubs after seeing your comment. You're right - they were taking out about $45 less per month in federal taxes this year compared to last year. That accounts for like $540 of the difference. Still doesn't explain all of it, but that's a big chunk I hadn't noticed. So essentially I was getting more in my checks but then less in my refund? That's so confusing.

That's exactly what happens for a lot of people. The tax system is designed to try to get you to break even - ideally you'd owe nothing and get nothing back. When tax laws change, they adjust the withholding tables, which changes how much comes out of each check. The rest of your missing refund might be from expired tax credits or deductions. The past few years had some temporary tax benefits due to COVID that have now expired. It sucks when your refund drops, but getting more in each paycheck throughout the year is actually better financially - you get to use your money sooner rather than letting the government hold it interest-free.

Yes, the standard deduction adjusts for inflation every year. For 2025, it's supposed to be around $14,600 for single filers and $29,200 for married filing jointly. That's up from 2024. Doesn't help you for your current return, but at least it'll help reduce your taxable income a bit next year.

Thank you for this! I had no idea about the Earned Income Tax Credit. My income from June-December was only about $25,000 since I started mid-year. Would I still qualify even though my annual salary is higher?

Yes, the EITC is based on your actual income earned during the tax year, not your annualized salary. Since you only worked part of the year and earned about $25,000, you would likely qualify for some amount of EITC. The exact amount depends on your filing status and a few other factors, but it could add several hundred dollars to your refund. When you file, make sure whatever software or service you use checks your EITC eligibility with your actual earned income for the year.

This happened to my sister! The IRS sent letters to both her and my parents, and they had to figure out who should actually claim her. Took months to resolve.

What about accumulated earnings tax though? If the C-corp retains too much profit without a business purpose, couldn't they get hit with that penalty?

You're absolutely right to bring that up. C-corporations that accumulate earnings beyond the reasonable needs of the business ($250,000 is generally the threshold) can face the Accumulated Earnings Tax, which is a 20% penalty tax. However, if the company can demonstrate specific, definite, and feasible plans for the retained earnings - like future expansion, equipment purchases, paying down debt, or even building reserves for contingencies - these can justify keeping cash in the business. It's important to document these plans in your corporate minutes and have financial projections to support them.

I've thought about S-Corp, but we have some complications - we have foreign investors from the angel round, and I believe S-Corps can't have non-US shareholders? Also, if we did ever want to raise more money in the future or pursue an acquisition by a larger company, my understanding is that C-Corp is more attractive to those types of buyers.