That's a really good point. Do they usually send these out at tax time or should I ask for something now before investing?

Most firms will provide some basic tax information when you first invest that explains the general tax implications. Then toward tax season (usually January-March), they'll send out more specific guidance along with any required tax forms. I'd recommend asking them for any tax overview documents before you invest, since that might help ease your concerns. They should be able to explain what forms you'll receive, approximate timing, and the general tax treatment of their specific investment products.

This is solid advice! I'd also add that you should keep really good records of when you invested and how much. Makes tax time way less stressful.

Thanks for mentioning this. I asked her and surprisingly, she says she's never received any notices from the IRS questioning her filing status. Which seems weird to me? Wouldn't they automatically catch that we're married but filing differently?

The IRS system isn't as automated and efficient as people think. They have matching programs that flag obvious discrepancies like reported income not matching W-2s, but filing status verification is more complex and often requires human review. The IRS is severely understaffed and underfunded, so many issues that should be caught slip through. This doesn't mean you're in the clear though - they can still discover it during a random audit or if another issue triggers a review of her returns. The fact that she hasn't received notices yet is actually pretty common, but doesn't mean it won't become a problem later.

This is crucial. If you've been claiming the same dependents on your return while she's also claiming them as HOH, that's definitely going to raise red flags for the IRS.

Oh that's a really good point I hadn't considered! I did have some taxes taken out of my paychecks that year. Do you know if I'd still be able to get that money back even though it's been a few years?

Yes, you can still get that money back! For 2018 returns, you have until April 15, 2022 to file and claim any refund owed to you. After that date, any unclaimed refund becomes property of the Treasury. If you're due a refund, there's actually no penalty for filing late. The penalties only apply when you owe taxes. So this might be a win-win - you comply with the IRS request and potentially get some money back at the same time.

Also worth noting that if you had self-employment income over $400, you're required to file too, even if your total income is below the standard threshold. Made that mistake my first year doing gig work.

Good point about state fees! Also, does anyone know if you can change your mind later? Like if we start as a partnership, can we convert to S Corp next year if we decide that's better?

Yes, you can absolutely change later. Many businesses start as partnerships for simplicity, then convert to S Corps when their profits justify it. The conversion is straightforward - you file Form 8832 to elect to be taxed as a corporation, then Form 2553 to elect S Corp status. Just be aware there are timing requirements. Generally, if you want S Corp status for a particular tax year, you need to file within the first 2.5 months of that year (or within 75 days of forming your business if it's a new entity).

This is what tipped our decision for our handyman business. We needed to buy a lot of equipment the first two years, so we stayed as partnership. Year three we switched to S Corp once we were taking home steady money. Saved about $6k in SE taxes last year alone!

What percentage should married couples have withheld? We both put "married" on our W-4s but still ended up owing this year.

There's no one perfect percentage that works for everyone, but for married couples with two incomes, a common issue is that both of you are having taxes withheld at the married rate, which assumes the other spouse doesn't work. If both of you select "Married" on your W-4 without any adjustments, you're essentially both claiming the full married tax bracket benefit, which results in underwithholding. In 2025, you should either select "Married, but withhold at higher Single rate" on your W-4s, or use the Two-Earners/Multiple Jobs worksheet (or your company's payroll system calculator) to determine the additional amount to withhold per paycheck.

Yes! This is the simplest solution. I use TurboTax and it lets you compare both filing statuses side by side to see which saves you more. MFS was worse for us by about $3k.