I'm so glad you asked this question because I was in almost the identical situation about a year ago! My manager fed me the exact same line about "all your tip money going to taxes" when I asked about cross-training as a server, and I actually believed it for way too long. Here's the reality from someone who made the switch: I went from making $12/hour hosting to averaging about $26/hour as a server after all taxes. Yes, you pay taxes on tips - roughly 22% total in my case (federal income tax + FICA + state) - but that still leaves you with 78% of your tip income PLUS the $2.75 base wage. So when I make $150 in tips on a busy night, I pay about $33 in taxes and keep $117 from tips alone, plus my hourly wage. That works out to way more than the $12/hour I was making hosting the same shift. Your manager is using a classic manipulation tactic that's unfortunately super common in restaurants. Good hosts who know the layout, computer system, and regular customers are genuinely valuable and harder to replace than servers. Rather than deal with hiring and training a new host, they'd rather keep you in place with tax misinformation. My advice? Be diplomatic but firm. Say something like "I've done some research on the tax implications and I'm comfortable with them. I'd really like to develop my skills by learning to serve - when could we start my training?" Don't call them out directly for lying, but make it clear you know the tax excuse doesn't hold up. Trust me, servers wouldn't stick around if all their money actually went to taxes! Push for those shifts - your bank account will thank you.

As someone who just went through this exact situation 6 months ago, I can tell you with 100% certainty that your manager is lying to you. I was hosting at $13/hour and got the same "all your tips go to taxes" speech when I asked about serving. After doing my own research and finally making the switch, I now average $24-28/hour after taxes as a server. The math is straightforward - tips are taxed as regular income (probably 10-12% federal at your income level) plus FICA (7.65%) plus state taxes, so roughly 20-25% total. That means you keep 75-80% of every tip dollar. On a typical Friday night where I make $180 in tips, I pay about $40 in taxes and keep $140 from tips alone, plus my $2.83 base wage. Compare that to hosting the same shift at $13/hour - it's not even close. Your manager is using this lie because good hosts are genuinely harder to find and train than servers. They'd rather keep you in place with tax misinformation than deal with the hassle of replacing you. It's purely for their convenience, not your financial benefit. Be direct but professional: "I've researched the tax implications and I'm comfortable with them. I'd like to start server training to develop my skills." Most managers back down once they realize you know the tax excuse is complete BS. Don't let them limit your earning potential with lies about tax law - push for those server shifts!

14 Has anyone had issues with their cost basis not being reported correctly on their Robinhood 1099-B? I'm noticing a bunch of my transactions say "cost basis not reported to the IRS" and I'm not sure how to handle that in FreeTaxUSA. Will the IRS flag my return if what I enter doesn't match what Robinhood reported?

One thing that helped me when I was in the same situation - make sure you have all your documentation ready before you start entering transactions in FreeTaxUSA. I learned the hard way that you need your original purchase confirmations from Robinhood for any transactions where the cost basis wasn't reported. You can usually find these in your Robinhood app under Documents or Account Statements. Having the exact purchase dates and amounts makes the whole process much smoother in FreeTaxUSA's investment income section. Also, double-check that any dividends you received are entered in the 1099-DIV section separately from your stock sales - I almost missed those my first year! The key is just taking it slow and entering one transaction at a time if you're doing it manually. FreeTaxUSA's interview process will make sure everything ends up on the right forms automatically.

Make sure you're also checking if you're eligible for the Lifetime Learning Credit if the American Opportunity Credit doesn't work for your situation! It's worth looking into both to see which one benefits you more.

Hey Nia, I totally get the anxiety you're feeling - I went through something very similar last year! The good news is that you're being responsible by trying to get this right, and the IRS really isn't as scary as it seems for situations like yours. A few things that might help ease your worry: First, you can absolutely set up a payment plan with the IRS if you can't pay the full amount at once. They offer installment agreements that can be as low as $25-50 per month depending on your situation. You can even apply online through their website. Second, regarding last year's return - while it's true your dad should have reported that $3,500 in excess scholarship income, the fact that you're correcting things going forward shows good faith. If you do decide to amend last year's return (which is generally the right thing to do), you can include a statement explaining that you were unaware of the scholarship taxation rules and are voluntarily correcting the error. Also make sure you're maximizing any education credits you qualify for - the American Opportunity Credit could potentially offset a significant portion of what you owe. Don't let the anxiety paralyze you - take it one step at a time and remember that the IRS works with people who are trying to comply with tax law.

Has anyone else noticed that syndication sponsors are being super aggressive with cost segregation studies lately? I just got one that claimed 85% bonus depreciation in year 1 on a property that's clearly not that front-loaded with short-life components. Makes me nervous about audit risk.

This is a great question that many syndication investors struggle with! The short answer is yes - you can generally use your $135k in depreciation losses from the new syndication to offset your $135k in Section 1231 gains from the sales, assuming both are passive activities for you as an LP. Here's what's happening: Your new syndication's cost segregation study creates passive activity losses, while your sale gains are likely passive income since you weren't materially participating in those properties either. The passive activity loss rules allow these to offset each other within the same tax year. A few important considerations: 1. Make sure both activities qualify as passive (sounds like they do as an LP) 2. Be aware that some of your gain might be depreciation recapture taxed at 25% rather than capital gains rates 3. Any excess losses get suspended and carried forward to future years Regarding the "benefit" of upfront depreciation - it's not just about offsetting rental income. It creates valuable tax deferral, and if you have suspended losses when you eventually sell a property, those losses can offset ANY type of income (not just passive). This is why cost segregation studies are so powerful for wealth building through real estate. I'd definitely recommend working with a CPA who specializes in real estate syndications to make sure you're maximizing these opportunities properly!

I noticed nobody mentioned that sometimes the two numbers in Box 19 could be from the same locality but for different time periods if you moved during the year. In my case, one was for Jan-July and the other was Aug-Dec after our city slightly changed their local tax rate mid-year. Make sure you check if that's your situation before you assume they're from different localities.

I'm dealing with this exact same issue right now! I have two different local taxes in Box 19 - one from the city where I work and another from the township where I live. After reading through all these suggestions, I tried looking more carefully in TaxSlayer and finally found the "Local Taxes" section that wasn't obvious at first. For anyone still struggling with this: after you enter your main W-2 information, there's a section specifically for local taxes where you can add multiple entries. Don't try to add it as another state like I initially did - that will mess up your calculations completely. Each local tax needs to be entered separately with the exact locality name as shown on your W-2. I'm still in the process of completing mine, but at least now I know where to enter the information correctly. Thanks to everyone who shared their experiences - this thread was way more helpful than TaxSlayer's help documentation!