Wait, what if I already contributed to my employer's 401k? Does that reduce how much I can put in my Roth IRA? And do rollovers from previous employer 401ks count against the contribution limits?

Contributing to your employer's 401k doesn't reduce how much you can put in your Roth IRA. The limits are completely separate, so you can max out both if you have the funds. For 2022, you could contribute up to $20,500 to your 401k AND still put $6,000 in your IRA. Rollovers from previous employer 401ks to an IRA don't count against your contribution limits at all. You can roll over any amount without affecting your ability to make your annual IRA contribution. That's actually a great way to consolidate your retirement accounts without using up your yearly contribution space.

So true! My Vanguard account defaults to the current year unless I specifically select the previous year. Does anyone know if there's a way to fix this if you realize the mistake after a few months? Like if I contributed in February but just now realized it went to the wrong tax year?

If you catch the mistake within the same tax year, you can usually get it fixed by calling your brokerage. They have a process for redesignating contributions to the correct tax year. But there's a deadline - you can't redesignate after the tax filing deadline (April 18th this year). If you discover it after the deadline passed, it gets much more complicated. You might face excess contribution penalties if the mistaken designation put you over the limit for a year. Some brokerages will work with you on this issue, but it's always best to triple-check the year designation when making contributions between January and April!

This is so important! My company had me set as "Single" for my first 3 paychecks despite me telling HR I was married with kids. When they finally fixed it, the difference was huge. OP should definitely double check this!

Absolutely right! The difference between "Single" and "Married Filing Jointly" withholding can be substantial. In my case, it was almost a 15% difference in take-home pay. I'd also recommend looking at the actual pay stub carefully. Sometimes there are other deductions beyond just taxes - health insurance, retirement contributions, or other benefits that might be reducing the take-home amount. These can be especially confusing when you're new to the US system since benefit packages work differently than in many other countries.

That tool is super confusing for non-citizens though. It doesn't account for visa status at all and some of the questions don't even apply to people who just moved to the US. I tried using it last year and ended up more confused.

That's a fair point. The tool does assume a lot of prior knowledge about the US tax system that newcomers wouldn't have. I found I had to research several terms before I could even answer the basic questions. When I used it, I had already been in the US for about a year, so I had some understanding of how things worked. For someone completely new to the system, you're right that it might create more confusion than clarity.

Do you have any thoughts on the ideal income level where C Corp makes more sense? I've heard different thresholds from different advisors.

The income threshold where a C Corporation becomes more advantageous varies based on your specific situation, but generally, C Corps tend to make more sense when business income exceeds $300,000-$400,000. At that level, the corporate tax rates and ability to retain earnings for growth often outweigh the double taxation concerns. However, it's not just about income level. You should also consider your growth plans, whether you need to retain significant earnings in the business, plans for raising capital, and your personal financial situation. If you're planning to reinvest most profits back into the business rather than distributing them, a C Corp structure can be beneficial even at lower income levels since those retained earnings aren't being double-taxed.

I did exactly this - formed a Wyoming C Corp while living in NY. You need to be aware of "doing business" rules - you'll likely need to register as a foreign corporation in your home state anyway and potentially pay taxes there. The privacy benefits remain, but you don't escape state taxation where you're physically located and working.

This is such a good point! The exact same situation applies to us - the student loan savings from filing separately FAR outweigh the tax benefits of filing jointly. It's absolutely worth calculating both ways. Also worth noting that if you're on PSLF (Public Service Loan Forgiveness), filing separately can dramatically reduce your required payments while you're working toward forgiveness, which is basically free money if you're going to get the loans forgiven anyway.

Thanks for the professional perspective! I didn't even think about how this could change year to year. So basically I need to run the numbers both ways each tax season to see which is better for our specific situation? Is there a quick way to estimate which might be better without doing the full tax return twice? Maybe some rules of thumb about when separate filing tends to be better?

Yes, calculating both ways each year is the safest approach since tax laws and your financial situation both change over time. For a quick estimation, separate filing tends to be more beneficial in these specific scenarios: 1. When one spouse has medical expenses exceeding 7.5% of their individual AGI (but not of joint AGI) 2. When income-based student loan repayment is involved (as others mentioned) 3. When one spouse has significant miscellaneous itemized deductions 4. When you want to keep tax liability separate (e.g., concerns about tax debt or refund offsets) 5. When one spouse qualifies for certain income-based benefits that would be lost with combined income Most tax software has a "what-if" scenario tool that lets you compare filing statuses without recreating the entire return. It's usually just a few clicks to see the difference, and it's absolutely worth checking every year.

But wouldn't the gift cards just be considered the "buy-in" for gambling? Like if I take $100 cash to a casino, that's not a gambling loss until I actually gamble with it and lose, right? I'm confused how this works with gift cards as an intermediary step.

That's a good question! The gift cards in this situation are essentially your "buy-in" or your stake in the gambling activity. The IRS considers your gambling losses to include the money you spent to gamble - so yes, the gift card purchases would count as part of your gambling losses. The key difference from your casino example is that with cash, you're just converting one form of money to chips and back. With gift cards purchased specifically for gambling, those purchases are documented gambling expenses. Just make sure you keep good records of all gift card purchases since you'll need to substantiate your gambling losses if you're audited. Also remember you can only deduct losses up to the amount of your winnings, and only if you itemize deductions rather than taking the standard deduction.

Which software are you using? I had this issue with CoinTracker but fixed it by manually adding a "buy" transaction at the exact time I received the ETH from the gambling site, with the USD value at that moment. Then I deleted the incoming transaction that had no cost basis.