


Ask the community...
Since everyone's talking about bonuses and taxes, anyone know if it's better to get your bonus in December or January from a tax perspective? My company lets us choose and I never know which is better.
January is almost always better because you defer the taxes for a whole year. I always push mine to January.
I always get pissed about bonus taxes too but then I just remember - you're getting a BONUS! Some extra money is better than no extra money lol. And you'll get some back when you file. Just think of it as forced savings.
Don't sleep on the Qualified Business Income (QBI) deduction! As a self-employed person, you might qualify for up to 20% off your qualified business income. This is separate from your regular business expense deductions. I missed this for two years before figuring it out. Depending on your income level and business type, there are phase-outs and limitations, but it's absolutely worth looking into.
Is there an income limit for this QBI thing? My business made around $110k last year but I'm technically a single-member LLC. Would I still qualify?
Yes, there are income thresholds, but at $110k you should definitely still qualify! For 2025, the phase-out begins at $191,950 for single filers and $383,900 for married filing jointly. Below those thresholds, you can potentially take the full 20% deduction. Being a single-member LLC is actually perfect for this deduction. The IRS treats you as a sole proprietor for tax purposes, which means you report on Schedule C and can claim the QBI deduction on your personal return. Just make sure your accountant is calculating this - it's not automatic and some tax preparers miss it if they're not familiar with small business returns.
Has anyone maximized their health insurance deductions? I heard I can deduct premiums as self-employed but my tax software keeps giving me different answers.
Self-employed health insurance deduction is HUGE but often misunderstood. You can deduct 100% of premiums for yourself, spouse and dependents as an adjustment to income (not itemized). BUT your business must show a profit and you can't deduct more than your business net profit. Also, if you're eligible for coverage through a spouse's employer plan, you generally can't take the deduction even if you don't use their plan.
Have you looked into becoming an authorized FIRE system user? Our county had the same problem with 1098-F forms last year. You need to complete Form 4419 (Application for Filing Information Returns Electronically) to get a Transmitter Control Code (TCC). Once approved, you can use the FIRE system to upload your forms in the proper format. It's not super intuitive, but it's better than manual filing for sure.
Thanks for mentioning this! I've heard of the FIRE system but wasn't sure if it applied to 1098-F forms specifically. How long did the approval process take for you? We're working on a pretty tight timeline with our new reporting requirements.
The approval process took about 3 weeks for us, but that was during a slower period. If you're approaching year-end or tax season, it might take longer. I'd recommend submitting the Form 4419 application as soon as possible. One thing to note is that you'll need to create files in a very specific format for the FIRE system. The IRS has detailed specifications for each information return type. We ended up using a programmer to help create the proper file structure for our 1098-F submissions.
Just wanted to add that you need to be very careful about the filing requirements for 1098-F. We messed this up last year and it was a headache. Make sure your agency has a clear understanding of which settlements/orders actually require a 1098-F. Not all penalties need to be reported! Only certain ones that meet specific criteria like being related to violation of law, investigation/inquiry by government, etc.
Totally agree with this. We had to go back and review hundreds of cases to determine which ones met the reporting threshold. The IRS guidance is a bit vague. Does anyone have a good checklist or process for determining what needs to be reported on 1098-F?
One thing nobody's mentioning is that the β¬750M threshold is actually pretty high! This only affects the very largest multinational companies. Small and medium businesses (even fairly large ones by most standards) won't be directly impacted by these rules. Also worth noting that the implementation timeline keeps getting pushed back. Originally supposed to start in 2023, now many jurisdictions are talking about 2024 or even 2025 before they have local legislation in place. The US delay is particularly problematic since so many multinationals are headquartered there.
Does that β¬750M threshold apply to the global company or just operations in a specific country? Like if a company makes β¬800M worldwide but only β¬100M in France, would it still be subject to the minimum tax in France?
The β¬750M threshold applies to global consolidated revenue of the multinational group, not the revenue in each specific country. So in your example, a company with β¬800M worldwide revenue would be subject to the minimum tax rules even if they only had β¬100M in France. This is actually one of the key points of the agreement - it's designed to capture large multinationals that might have relatively small operations spread across many countries. The threshold was set to target the largest 10-15% of multinational enterprises while excluding smaller companies that would face disproportionate compliance burdens.
As someone who works with emerging markets, I think the impact on developing countries is being overlooked. Many use tax incentives to attract foreign investment because they can't compete with developed nations on infrastructure, workforce, etc. This agreement potentially removes one of their few competitive advantages. That's likely why Kenya and Nigeria haven't signed on. They see it as developed nations protecting their tax bases at the expense of developing economies' growth strategies. The revenue redistribution under Pillar One is supposed to address this, but the formulas tend to favor larger economies.
Dmitry Petrov
Remember the tax cuts expire after 2025! So even if you benefited, your taxes will likely go up in 2026 unless Congress acts to extend them. I'm already planning ahead by increasing my 401k contributions to offset the expected increase. My situation: family of 4 in Texas (no state income tax). We saved about $3,200/year with the changes - mostly from the expanded Child Tax Credit and lower rates. But I calculated that when things revert in 2026, we'll pay about $2,800 more than we do now.
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StarSurfer
β’Do we know for sure they're expiring? I thought there was talk about making some of the changes permanent.
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Dmitry Petrov
β’As the law currently stands, most of the individual tax provisions will expire after 2025. Congress would need to pass new legislation to extend them. Some of the business provisions were made permanent, but the personal income tax changes were temporary. There's always talk about extending popular tax cuts, but that requires congressional action. Given how difficult it is to get anything passed these days, I'm planning for the expiration while hoping for an extension. Best to be prepared either way.
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Ava Martinez
Has anyone used TurboTax to model what will happen in 2026 when the cuts expire? I'm trying to do some retirement planning and need to figure out if I should accelerate income into 2024-2025 or defer to later years.
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Miguel Castro
β’TurboTax won't let you model future years accurately. I'm a CPA and we use professional software that can project scenarios with different tax laws. Your best bet is to consult with a tax professional for retirement planning that factors in potential law changes.
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