I'd definitely recommend starting with the IRS withholding calculator that Emma mentioned - it's free and will give you the most accurate picture for your specific situation. With your combined income of around $133k and filing separately, there are definitely some nuances to consider. One thing I haven't seen mentioned yet is timing. If you do decide to change your withholding, consider doing it at the beginning of a quarter so you can more easily track the impact. Also, since you mentioned your incomes are stable, you might want to do a mid-year check using the calculator again to see if you're on track. The child tax credit coordination that Miguel mentioned is crucial - whoever claims your 2-year-old will get up to $2,000 in credit, which can significantly impact your withholding needs. This should definitely factor into your decision about whether to change from 0 to 1. Given that you've successfully avoided owing taxes in previous years, I'd lean toward being conservative. Maybe try the IRS calculator first, and if it shows you're significantly over-withholding, then consider the change. You can always adjust again later in the year if needed.

One thing I'd add to all this great advice is to consider setting up quarterly estimated tax payments if you do switch to claiming more allowances. Since you're both W-2 employees, you might not think about estimated payments, but they can be a great safety net when you're in a complex filing situation like married filing separately. If the IRS calculator shows you might owe a bit at tax time with increased allowances, you could set up small quarterly payments (maybe $50-100 per quarter) to cover the gap. This way you get more money in each paycheck throughout the year but still avoid any surprises come April. Also, since you mentioned stable incomes, this is actually the perfect scenario for fine-tuning your withholding. People with variable income have to guess, but you can calculate pretty precisely what you'll owe. Just remember that if you do end up owing more than $1,000 at tax time, you might face underpayment penalties, so the conservative approach others have mentioned is definitely wise. The student loan angle makes this more important too - you want to keep your AGI as low as possible for income-driven repayment calculations, so getting your withholding just right helps you avoid giving the IRS an interest-free loan while also not creating cash flow problems.

Welcome to the community! This has been such an educational thread to read through as someone new here. I'm dealing with a property situation after a flood damaged my home last year, and seeing all the different experiences and strategies shared here has been incredibly valuable. One thing I wanted to add that might help others is about timing your documentation gathering. I learned the hard way that some records become harder to access over time - my insurance company only keeps detailed settlement breakdowns readily available for a certain period before they get archived. Same with some county offices that digitize older records differently. If anyone reading this thread is in the early stages after a casualty loss, I'd recommend requesting and organizing all your documentation sooner rather than later. The specific breakdown of insurance payments (structure vs. contents vs. additional living expenses vs. loss of use) that several people mentioned can be crucial for tax planning, but insurance companies sometimes summarize these details differently in later correspondence. Also, for those considering the various tax strategies discussed here - the 1031 exchanges, Opportunity Zone investments, installment sales - it's worth noting that some of these have planning requirements that need to be set up well before you actually sell. Having your documentation organized early gives you more time to explore these options properly. Thanks to everyone who shared their experiences and knowledge throughout this discussion. This community is an amazing resource for navigating these complex situations!

As a new member of this community, I've been following this incredibly detailed discussion and wanted to share a perspective from someone who's currently in the middle of a similar situation. My house was destroyed in a tornado 18 months ago, and I've been holding onto the vacant lot while living in a rental property. Reading through all the experiences shared here has been both enlightening and a bit overwhelming - there are clearly so many factors to consider! One thing I'm curious about that I haven't seen addressed directly: how do you handle the emotional side of selling the land where your home used to be? I know this is primarily a tax-focused discussion, but I'm finding that the financial planning is only part of the challenge. There's something psychologically difficult about letting go of that piece of ground, even though there's nothing left there. From a practical standpoint, I'm taking notes on all the documentation tips shared here - especially the suggestion to contact the title company for old assessment records. That seems like it could save me weeks of trying to track down the land-to-structure ratio I need for my basis calculations. I'm also intrigued by the various tax deferral strategies mentioned throughout this thread. The 1031 exchange possibility is particularly interesting since I was already considering investing in rental property. It sounds like the key is getting all the documentation organized first, then exploring which strategy makes the most sense for my specific situation. Thanks to everyone who has shared their knowledge and experiences here. This discussion has given me a much clearer roadmap for moving forward!

One thing nobody mentioned: if you used the card for business expenses and deducted 100% of those expenses on last year's tax return, but get the rewards this year, you might need to include the rewards as income for this year's return. Timing matters. Talk to a CPA to be safe.

Just to add another perspective - I'm a tax preparer and see this question a lot during tax season. The key distinction everyone's mentioned is spot on: regular spending rewards = rebate (not taxable), sign-up bonuses without spending requirements = potentially taxable income. For business cards specifically, if you're deducting the full business expense but then receiving rewards back, you're essentially double-dipping. The cleanest approach is usually to either: 1) reduce your business expense deduction by the amount of rewards received, or 2) report the rewards as business income. Both achieve the same net effect. One more thing - keep good records of your rewards earning and redemption. Even though most rewards aren't taxable, having documentation helps if you ever need to explain your position to the IRS. The fact that you're asking this question puts you ahead of most people who just ignore it completely!

For your situation, you're definitely in good shape! With $78,000 from landscaping plus $12,000 from consulting, your total business income of $90,000 easily supports the $34,000 Section 179 deduction for your commercial mower. Just to clarify a few key points from the discussion: Make sure the mower is actually delivered and put into service (used for business) before December 31st if you want the deduction this tax year. The "placed in service" date matters more than the purchase date. Also, keep detailed records showing when you first used it for business - delivery receipts, setup documentation, and maybe photos of it on the first job. One thing I'd add that I haven't seen mentioned: consider your cash flow needs too. While Section 179 gives you the full deduction upfront (great for taxes), it also means you can't spread the tax benefit over multiple years like with regular depreciation. With your income level, this is probably the best approach, but it's worth discussing with your accountant as part of your overall tax strategy. The equipment definitely qualifies - commercial mowers for a landscaping business are exactly what Section 179 was designed for. You're well under both the income limitation and the annual Section 179 caps, so you should be able to take the full deduction without any issues.

One additional consideration I haven't seen discussed yet is the recapture rules for Section 179. If you sell or stop using the equipment for business purposes within a few years of claiming the deduction, you may have to "recapture" part of the Section 179 deduction as income. For your $34,000 mower, if you sold it after 2 years for $20,000, you'd potentially have to report some of that Section 179 deduction as income on your tax return. The exact calculation depends on how long you used it and what percentage was for business use. This doesn't mean you shouldn't take the Section 179 deduction - it's still usually the best choice - but it's worth keeping in mind for your long-term business planning. If you're confident you'll use the mower for business for at least 5-7 years, recapture shouldn't be a major concern. Also, since you mentioned considering additional equipment purchases, remember that all your Section 179 property for the year counts toward your business income limitation together. So if you do decide to add that $25,000 trailer, your total would be $59,000, which still fits comfortably within your $90,000 business income limit.

Quick question for anyone who knows - I'm in a similar situation but with a much smaller inherited IRA (about $43k). Is there a minimum amount where the IRS doesn't care about missed RMDs? Like if the penalty would be really small, do they sometimes just ignore it? Just wondering if there's a threshold where it's not worth their time to pursue.

I went through this exact situation with my father's inherited IRA back in 2021. Missed three years of RMDs and was absolutely terrified about the penalties. Here's what worked for me: First, don't panic - the IRS really is reasonable about penalty waivers when you're proactively fixing the mistake. I calculated all my missed RMDs using the Single Life Expectancy Table (you can find it in IRS Publication 590-B), took all the distributions immediately, then filed separate Form 5329s for each missed year. The key is the reasonable cause letter. I explained that I wasn't aware of the RMD requirement due to inexperience with inherited accounts, that I discovered the error through my own research, and that I had now taken all required distributions and would comply going forward. I attached documentation showing I had taken the catch-up distributions. The IRS waived all penalties - saved me about $4,200. The whole process took about 6 months from filing to receiving the waiver approval. The hardest part was actually getting all the year-end account statements I needed for the calculations, so make sure you contact your IRA custodian for those historical balances. One tip: when you take the catch-up distributions, ask your custodian to code them properly for each tax year they relate to, not just dump them all as 2025 income. This can help with the tax impact.