I haven't been getting pay stubs! That's part of the problem - they just direct deposit the money and when I've asked for stubs they say "we'll email them" but never do. Is that even legal? How do I know if they're actually sending the money to the IRS if I don't get pay stubs?

That's concerning. Employers are legally required to provide either electronic or paper pay statements in most states. If they're not providing pay stubs, that's another red flag pointing to potential financial issues at the company. You can check if they're remitting your taxes by creating an account on the IRS website and viewing your wage and income transcript. It won't show real-time data, but you'll eventually be able to see if they're reporting your withholding properly. This is definitely a situation to stay on top of because if they're having financial troubles, tax withholding is often one of the first things struggling businesses stop remitting properly.

The IRS withholding calculator is definitely helpful but I found it confusing at first. Did you end up withholding enough to cover what you would owe? I tried using it but wasn't sure if I did it right.

Does that mean I'm in trouble if I sometimes move some of my inventory boxes around when I need to vacuum or clean? The space is definitely dedicated to my business but occasionally I need to shift things for maintenance.

No, you're not in trouble for basic maintenance activities like cleaning. That's considered a normal part of maintaining your business space. What the IRS looks for is whether the space serves a dual purpose. For example, if you're storing inventory in your bedroom where you also sleep, or using your living room couch for both business and personal activities, those spaces wouldn't qualify. But if you have boxes of inventory in a dedicated area and just move them temporarily to clean, that's perfectly fine.

I used TurboTax last year and it walks you through both methods and shows you which one gives you the bigger deduction. It asks for your total home square footage, the business-use square footage, and your expenses. Pretty straightforward. But honestly, I still got confused with some of the questions about "exclusive use" and partial room usage. Had to google a bunch of stuff that wasn't clear in the software.

Thanks this makes so much more sense with actual numbers! So is there any easy way to calculate what specific dollars are being taxed at what rate? Like if I get a $5000 bonus, is there a quick way to know how much of that I'll actually take home?

For a $5,000 bonus, it would be taxed at your marginal rate (your highest bracket) because it's additional income on top of what you already make. So if your highest bracket is 24%, about $1,200 would go to federal income tax. However, bonuses are often initially withheld at a flat 22% for federal tax (this is just withholding, not the actual final tax rate). Your actual tax obligation will be calculated when you file based on your total income and where it falls across the brackets. If your true marginal rate is higher than 22%, you might owe a bit more at tax time.

Could you share that spreadsheet please? I'm terrible at math and this whole conversation has me confused. I make $110k and my wife makes $72k and I have no idea what our blended rate should be.

I'll simplify it for you - with a combined income around $182k (minus standard deduction), you're likely in the 24% bracket, but your blended rate would be approximately 18-19%. The crucial thing to remember is that only the portion of your income that exceeds each threshold gets taxed at the higher rate. For 2025 married filing jointly, the first $22,000 (standard deduction) isn't taxed at all, then 10% applies to the first $23,200 of taxable income, 12% to the portion between $23,200 and $94,300, 22% from there to $190,750, and 24% on anything above that but below $364,200.

Wait, are you saying if I was owed a refund for 2013, I can't get it anymore? But if I owe THEM money, I still have to pay? That doesn't seem fair at all. How do I even know which situation I'm in before I file?

Yes, unfortunately that's exactly how it works. The IRS gives you 3 years to claim refunds, and after that window closes, you generally can't get that money. But they can still collect from you virtually forever (there's a 10-year statute of limitations on collection, but with many exceptions that can extend it). You won't know for certain which situation you're in until you prepare the return. That's why it might be worth working through the forms or using a service to calculate it first, before officially filing. If it turns out you owe a substantial amount with penalties, you might want to consult with a tax professional about your options.

I used FreeTaxUSA for a 2014 return last year and it worked well. It was around $15 for the federal (they keep all the old tax year versions available) and another $15 for state if I remember right. Much cheaper than TurboTax. The interface isn't as fancy but it gets the job done and had all the forms I needed.

Is this really true? I thought there was always a penalty for filing late regardless of whether you owe money or are getting a refund.

Yes, it's absolutely true! The IRS only charges penalties and interest when you owe them money and pay late. They have no incentive to penalize people who are owed refunds - they're actually saving money by holding onto your refund longer! The only "penalty" for filing late when you're due a refund is that you lose the refund entirely if you wait longer than 3 years from the original due date. So for 2020 taxes, you'd lose your refund if you don't file by May 17, 2024. But there are no failure-to-file penalties or interest charges when you're getting money back.

This! I thought I just had a "simple return" for 2020 but turned out I qualified for education credits from some classes I took that year. Added almost $1000 to my refund that I wouldn't have gotten if I just rushed through it.