Do you happen to know what the threshold is for 2025? I'm trying to plan ahead and figure out if I'll be close to that 22% bracket.

For 2025, the threshold between the 12% and 22% brackets for single filers is projected to be around $47,150 (up from about $44,725 in 2023). For married filing jointly, it's projected to be about $94,300. These are estimates based on inflation projections, and the IRS will announce the official numbers later this year. But they should be pretty close to these figures unless inflation changes dramatically.

While I agree the system favors the wealthy, that's not entirely accurate. The top 1% pays about 40% of all federal income taxes collected. The issue is more about proportional tax burden and the different treatment of earned income vs capital gains.

17 Is there a minimum amount you have to make before reporting? I thought there was some threshold where you don't need to bother reporting small side income?

3 Technically, all income is supposed to be reported regardless of amount. However, if you make $400 or more in self-employment income, you're required to file taxes on it because that's the threshold for paying self-employment taxes. Some people talk about a $600 threshold, but that's actually just the limit where payment platforms or clients are required to send you a 1099 form. Even if you don't receive a 1099, you're still supposed to report the income. The IRS has been cracking down on unreported income from online platforms, so better safe than sorry!

13 Do you know if this applies if you're selling through platforms like Etsy or eBay? I thought they handled the sales tax stuff automatically?

Do Acceptance Agents charge a lot? And would using one make the process faster? My main concern is the timeline since I have potential clients waiting for me to get all this paperwork sorted out.

Acceptance Agents typically charge between $50-$300 depending on the complexity of your situation and their location. Some offer additional services like reviewing your entire application package. Using an Acceptance Agent can potentially make the process faster because they help ensure your application is complete and correct the first time, reducing the chance of rejection and resubmission. They also eliminate the risk of your original documents getting lost in the mail. However, they don't actually speed up the IRS processing time - once your application reaches the IRS, it still goes through their standard processing queue. That said, a complete and accurate application will move through that queue without delays.

Unfortunately there's no online tracking system for ITIN applications like there is for tax refunds. You have to call the IRS ITIN department directly at 1-800-908-9982. Make sure you have your application confirmation if you received one, or at least the information about when and how you submitted it.

I hadn't thought about the backdoor Roth approach. Would that still work if my tax liability is already zero? And would I still need to worry about the documentation of foreign expenses if I go that route?

The backdoor Roth works regardless of your tax liability because you're making non-deductible contributions to a traditional IRA first, which doesn't require you to have tax liability. You'd report these non-deductible contributions on Form 8606. No need to worry about foreign expense documentation for this approach. You can take the full standard deduction, apply your FTCs to reduce your tax to zero (carrying forward any excess), and still do the backdoor Roth. The only documentation you need is for the FTCs themselves (foreign tax statements or equivalent), not itemized expenses.

FTCs can only be carried forward, not backward. You can carry them forward for up to 10 years, but you can't apply them to prior year returns unfortunately.

Is there any repository or website where you can look up these specific state rules? Trying to figure out what counts as "payment" in Colorado.

You can usually find these rules in your state's tax code or administrative code, which should be available online through your state's legislative website or department of revenue site. Search for terms like "date of payment" or "timely payment" along with "tax." For Colorado specifically, I believe they follow what's known as the "timely mailed, timely filed" rule, which means the postmark date is considered the payment date if sent by U.S. mail. They also have specific provisions for electronic payments. You can find these details in the Colorado Revised Statutes and the Department of Revenue's tax regulations. Their taxpayer service division can also provide this information if you call them directly.

Electronic payments aren't always an option for everyone though. My small business has to make special estimated payments for a particular industry tax that our state still requires to be submitted by mail with a special voucher form. It's ridiculous but that's how they want it.

That's a fair point. I didn't consider that some specialized tax types might still require physical payments. In those cases, I'd probably still try to use my bank's bill pay service rather than writing personal checks, since the bank creates an electronic record of when the payment was sent out, which gives you an additional layer of documentation. It's frustrating that some tax departments haven't fully modernized their systems yet, especially for business-specific taxes. Hopefully more states move toward comprehensive electronic payment options soon, as it's clearly better for both the taxpayers and the tax departments in terms of record-keeping. Profile: 1