Did anyone address the OPs question about changing withholdings to "deduct mortgage interest month by month"? My understanding is you can adjust your W-4 to have less tax withheld based on ANTICIPATED deductions, but you're taking a risk if you end up not itemizing.

Great question! I went through this exact same confusion when I bought my first home last year. Here's what I learned after making some mistakes: The key thing everyone's touching on is that you need to compare your TOTAL itemized deductions against the standard deduction ($27,700 for married filing jointly in 2023). With your $425k mortgage, you'll probably pay around $20,000-25,000 in interest the first year (depending on your rate), plus property taxes, but that might still not exceed the standard deduction. Regarding withholding adjustments - yes, you can reduce your withholdings through your W-4 if you anticipate itemizing, but I'd be conservative. Maybe adjust for only 75% of what you think you'll save, because if you end up taking the standard deduction instead, you could owe money at tax time. My advice: Run the numbers with a tax calculator first, then make any withholding adjustments gradually. Better to get a refund than owe penalties!

Quick tax tip from a bookkeeper studying for the CPA too: track your study hours! If you can show you spent X hours studying specific topics directly related to your bookkeeping services vs Y hours studying audit/topics not related, you might be able to deduct a proportional amount of the expenses. Better than nothing if the IRS questions the full deduction!

Great advice from everyone here! I'm actually dealing with a similar situation with my tax prep business. One thing I'd add - make sure you're keeping detailed records of exactly what topics your CPA courses cover and how they relate to your current bookkeeping work. I created a simple spreadsheet tracking each course module and noting which ones directly applied to services I already offer clients (like tax prep, financial statement preparation, etc.) versus completely new areas. This documentation really helped when my CPA reviewed my deductions. Also, since you mentioned you're in startup phase - consider whether some of these expenses might qualify as startup costs under Section 195 rather than regular business expenses. Sometimes the startup cost treatment can be more favorable, especially if you're not generating much income yet to offset the deductions against. The international contractor payment is definitely deductible as others mentioned - just keep good records of the work performed and invoices received. No 1099 needed for foreign contractors working outside the US.

I wanted to add some perspective as someone who works in tax preparation and has seen many cases like yours. The good news is that the medical expense deduction for non-dependents who fail only the income test is a well-established provision, though it's often overlooked. A few additional points that might help: 1. **Income timing consideration**: Since your daughter made $13,500 in 2024, if there's any possibility of her reducing her 2024 income below $4,850 (maybe through retirement plan contributions if she's eligible, or by deferring some year-end income to 2025), she could actually qualify as your dependent, which would make the medical expense deduction much more straightforward. 2. **State tax implications**: Don't forget to check your state's rules - some states have different thresholds for medical expense deductions or may not conform to the federal rules about non-dependent medical expenses. This could affect your overall tax benefit. 3. **Estimated tax considerations**: If these deductions are going to significantly reduce your tax liability, you might want to adjust your estimated tax payments for 2025 to avoid overpaying throughout the year. The key documentation the IRS typically wants to see includes: direct payment records to providers, insurance EOBs showing what wasn't covered, a statement from your daughter that she's not claiming these expenses on her return, and detailed support calculations showing you provided more than 50% of her total support. Given the complexity and amounts involved, I'd strongly recommend having a tax professional review your situation before filing. The rules are nuanced and the stakes are high enough that professional guidance could save you significant money and stress.

I've been reading through this discussion and wanted to share some practical insights from my experience as a CPA who specializes in family tax situations like yours. First, regarding your daughter's 401(k) contribution strategy - this is actually a brilliant approach that could solve multiple problems at once. If she can contribute enough to bring her 2024 income below $4,850, she'd qualify as your dependent, making all the medical expense deductions much more straightforward. The maximum 401(k) contribution for 2024 is $23,000, so she'd need to contribute at least $8,650 to get below the threshold ($13,500 - $4,850). Even if she can't do the full amount, any reduction helps with the dependency calculation. For the daughter's statement about not claiming expenses, a simple written declaration works fine. Something like: "I, [daughter's name], certify that I will not claim any medical expenses paid by my parents [your names] on my 2024 tax return." Include the date and her signature. Regarding estimated taxes, I'd recommend being conservative and not reducing your Q4 payment significantly. The interaction between increased income from retirement withdrawals and potential medical deductions is complex, and it's better to get a refund than face penalties. You can always adjust your 2025 estimated payments once you know your actual 2024 results. One additional tip: consider setting up a separate checking account specifically for medical expenses going forward. This creates a clear paper trail and makes documentation much easier for both tax preparation and potential audits.

This is such a helpful discussion! I'm actually dealing with this exact same issue right now with my part-time job at a local bookstore. I've been working there since September and just realized they haven't withheld any federal taxes from my roughly $1,900 in earnings, even though I have a full-time job elsewhere. Reading through everyone's experiences really helped me understand that this isn't actually an error - the payroll system at my bookstore is correctly calculating that I wouldn't owe federal taxes on just that income alone since it's below the standard deduction threshold. The problem is obviously that it doesn't account for my combined income from both jobs. I'm definitely going to use the IRS Tax Withholding Estimator this week to figure out how much additional withholding I need. The suggestion that several people made about just having extra withheld from my main job rather than trying to coordinate W-4 changes at both employers sounds like the most practical approach. It's really reassuring to see how many others have successfully navigated this situation. Thanks to everyone for sharing their experiences and solutions - it's turned what seemed like a scary problem into something totally manageable!

This exact thing happened to me when I started my part-time job at a local gym! I was earning about $2,000 and panicking when I saw zero federal withholding on my pay stubs, especially since I already have a full-time position. What I discovered is that the W-4 form has a specific section (Step 2) for people with multiple jobs. There are actually three options: you can use the online estimator, fill out the Multiple Jobs Worksheet, or if both jobs have similar pay, you can simply check the box on Step 2 for both W-4 forms. The easiest solution I found was updating my W-4 at the part-time job to check the "Multiple Jobs" box - this tells their payroll system to withhold at a higher rate to account for your other income. Within two pay periods, I started seeing appropriate federal withholding. Just make sure you don't check that box on both jobs' W-4s simultaneously without doing the calculations first, as that can lead to over-withholding. The IRS website has really clear instructions on how to handle this properly for multiple job situations.

Anyone using TaxAct for their 1120S? Reviews look decent but wondering if it actually walks you through all the required forms and schedules properly.

As someone who just went through this exact same transition from LLC to S-Corp last year, I feel your pain! The paperwork is definitely overwhelming at first. Beyond what others have mentioned, don't forget about Form 8869 (Qualified Subchapter S Subsidiary Election) if you have any subsidiaries, and Form 1125-A (Cost of Goods Sold) if your construction company maintains inventory of materials. Also, since you're in construction, you'll likely need to pay attention to the uniform capitalization rules under Section 263A if your average gross receipts exceed $29 million over the prior 3-year period. For a $375k revenue company you're probably fine, but it's worth knowing about as you grow. One thing I wish I'd known earlier - keep really detailed records of your shareholder basis throughout the year. The K-1 calculations get tricky if you don't track your initial investment, additional contributions, and distributions properly. Makes next year's filing much smoother!