I'll definitely look for Form 3922! And good point about checking his paystubs - I hadn't thought to look there. Is there any specific section on the paystub where stock compensation typically appears? Also, if the matched shares are treated as RSUs, would that change how we calculate the basis?

Stock compensation usually appears as a separate line item on paystubs, often labeled something like "Stock Awards" or "Equity Compensation." Sometimes it's under a non-cash benefits section. Look at paystubs from periods immediately following grant dates, as that's when the income would typically be recognized. If the matched shares are treated as RSUs, the tax treatment is actually similar, but the timing might be different. With RSUs, the taxable event occurs at vesting, not at grant. The FMV at vesting becomes your basis, and any subsequent appreciation is capital gain. With matched ESPP shares, the taxable event is usually at grant. The documentation from your husband's company should clarify which approach they're using.

Section 83(b) elections are usually more relevant for restricted stock with vesting conditions, not immediate stock matches in an ESPP. From what OP described, it sounds like the matched shares are granted immediately without vesting requirements, so 83(b) probably wouldn't apply here.

They don't currently get any stipend or per diem for the travel unfortunately. That's why we're trying to figure out if there's any tax relief available. The union does have some provisions for travel pay, but only for jobs beyond a certain distance (I think it's 75 miles), and most of their assignments fall just under that threshold. Do you know if there's a standard mileage rate they could use instead of tracking actual gas costs?

Yes, using the standard mileage rate is usually much easier than tracking actual gas expenses. For 2024, the standard mileage rate for business travel is 67 cents per mile. This covers gas, wear and tear, depreciation, and insurance. If your partner qualifies to deduct these expenses (based on the temporary work location rules others mentioned), using the standard rate is typically much simpler than keeping all gas receipts. Just make sure they keep a detailed log of dates, locations, business purpose, and miles driven. There are several good mileage tracker apps that can help with this too.

This is the correct answer that everyone else missed. The Tax Cuts and Jobs Act suspended miscellaneous itemized deductions subject to the 2% floor from 2018 through 2025. This includes unreimbursed employee business expenses like mileage to job sites. If they're a W-2 employee, these expenses aren't deductible at the federal level right now. Some states still allow these deductions on state returns though, so check your state tax laws!

But that's still wrong - the total isn't 3.8%. The Additional Medicare Tax is 0.9%, which when added to the 2.9% regular Medicare tax equals 3.8%. Is that what you meant?

Yes, that's exactly what I meant. The base Medicare tax is 2.9% on all SE income. Then the Additional Medicare Tax of 0.9% kicks in at those higher income thresholds, bringing the total Medicare portion to 3.8% (2.9% + 0.9%). I should have been clearer in my wording. Thanks for pointing that out. This conversation perfectly illustrates how even small differences in how tax concepts are explained can lead to confusion!

The wage base is tied to the National Average Wage Index so it automatically increases with inflation. It's gone up dramatically in recent years because wages have been rising so quickly. You can always find the current wage base on SSA.gov rather than relying on articles that might be using outdated numbers.

Thanks for explaining that! I didn't realize it was tied to wage inflation. Makes sense why it's been jumping up so much these past few years. I'll bookmark the SSA site for future reference.

But how does Venmo know which payments are business vs. just friends paying me back for stuff? I use the same account for both.

Great question. Venmo has been rolling out features to distinguish between personal and business transactions. They now have specific "business" profiles/settings, and the way payments are categorized matters. If people are paying you for goods and services (which they can select when sending money), those will be reported. If it's marked as payments between friends, it's treated differently. However, the IRS doesn't care how Venmo categorizes it - if it's income from services you provide, it's supposed to be reported regardless of how it was processed. The smart approach is to set up a separate Venmo account just for your business transactions to keep everything clean and organized.

I did this calculation for my home art studio which is about 350 sq ft. My income was around $11k last year. After deducting my legitimate business expenses (portion of mortgage interest, utilities, supplies, etc.), my taxable business income dropped to about $6,200. That saved me roughly $1,700 in taxes. The key is keeping good records of ALL your expenses. Things people often forget: portion of internet if you use it for business communication, cell phone percentage used for business, mileage driving to get supplies, software subscriptions, insurance, etc. It was definitely worth it for me.

Honestly I hadn't considered doing it manually since I'm pretty intimidated by all the tax forms. Is Form 1065 something a regular person can figure out without an accounting background? And how would I calculate all the specific numbers for the K-1s?

Form 1065 is definitely doable without an accounting background, especially for a small, straightforward LLC with just two members. The IRS provides detailed instructions, and there are plenty of free guides online. For the K-1s, you basically take each income and expense item and allocate them according to your ownership percentages. So if your LLC had $10,000 in profits, your wife's K-1 would show $5,100 (51%) and yours would show $4,900 (49%). Same with deductions and credits. The actual form walks you through each line item. The trickiest part is usually just gathering all your business income and expense information, which you'd need to do for any tax preparation method anyway.

We're just a regular LLC with no special tax elections. When we formed it, we didn't do anything special with the IRS, so I think we're taxed as a partnership by default? Now I'm worried we messed that up too...

You're good then! You're right that a multi-member LLC is taxed as a partnership by default if you didn't make any special elections. You'll need to file Form 1065 and prepare K-1s for both of you showing the 51/49 split. One more thing to consider - if this is your first year filing, make sure you've obtained an EIN (Employer Identification Number) from the IRS. You'll need this for your partnership return. If you haven't done this yet, you can get one instantly online through the IRS website.