This has been such an enlightening thread! As someone who just graduated college and started my first full-time job, I had no idea how complex the true tax burden really is. I was only thinking about what gets taken out of my paycheck for federal and state income taxes, but reading about all these hidden taxes - sales tax, gas tax, property tax through rent, utility taxes, embedded corporate taxes - is honestly overwhelming. The 25-35% total burden range that keeps coming up means I'm potentially paying way more than I realized. As a new grad with student loans, every percentage point matters for my budget and long-term financial planning. I'm definitely going to try the tracking methods people have shared here, especially starting with categorizing my bank transactions to estimate sales taxes. The geographic arbitrage discussion is particularly relevant since I'm flexible about where I live early in my career - it sounds like the total tax picture should be a major factor in deciding between job offers in different states. What really strikes me is how this isn't taught anywhere in school. We learn about gross vs net pay, but nothing about the dozens of other ways taxes impact our actual purchasing power. This thread should honestly be required reading for anyone entering the workforce! Thanks to everyone for sharing their research and methods - this is exactly the kind of real-world financial education I wish I'd had before now.

This has been such a comprehensive and eye-opening discussion! As someone who's been casually wondering about my "real" tax burden for a while but never took the time to dig deep, this thread has given me both the motivation and the practical tools to actually figure it out. What really resonates with me is how fragmented and hidden so much of our tax burden is. I always knew about income taxes and sales tax, but I had never considered things like property taxes embedded in rent, utility taxes, or the corporate taxes that get passed through to us as consumers. The fact that we might be paying 25-35% total when everything is included is genuinely shocking. The geographic arbitrage discussion has been particularly valuable. I'm in a high-tax state and have been considering relocating, but I was only looking at income tax differences. Now I realize I need to factor in sales tax rates, property tax levels, utility taxes, vehicle registration fees, and all the other location-specific costs that add up over time. I'm going to start with the bank statement analysis approach that several people mentioned - categorizing transactions and applying local tax rates to estimate my actual sales tax burden. Even if it's not perfect, it has to be better than my current complete ignorance about where my money actually goes. Thanks to everyone who shared their research methods and real-world experiences. This is exactly the kind of practical financial education that should be taught in schools but isn't. Time to start taking control of understanding my actual financial picture!

One thing I don't see mentioned here yet is that if your partner can file as Head of Household (which they likely can if they claim your daughter), that filing status alone can save a significant amount compared to filing Single. The HOH standard deduction is much higher and the tax brackets are more favorable. Also wanted to add - make sure whoever claims your daughter also claims any childcare expenses if you're paying for daycare. The Child and Dependent Care Credit can be worth up to $1,050 for one child (20% of up to $5,250 in expenses). This credit has to go with whoever claims the dependent, so factor that into your calculations too. Given your income levels ($42k vs $58k), I'd definitely recommend running the numbers both ways like others suggested. The Earned Income Credit phases out around $50k for someone with one child, so there's a good chance you claiming her might actually result in a better overall refund for your household, especially if you're paying for daycare.

Great question! As someone who went through this exact situation with my ex-partner, I can tell you it's definitely worth doing the math both ways before deciding. Given your income levels ($42k vs $58k), there's a really good chance you should be the one claiming your daughter, not your partner. Here's why: The Earned Income Tax Credit (EITC) is huge for parents in your income range - it can be worth up to $3,733 for one qualifying child in 2024. But it starts phasing out around $43,492 for single filers with one child, so your partner at $58k likely gets little to no EITC benefit. You at $42k would get nearly the full credit. The Child Tax Credit ($2,000) is the same regardless of who claims her since you're both under the phase-out threshold. But combined with EITC, Head of Household filing status, and potentially the Child and Dependent Care Credit if you're paying for daycare, you claiming her could easily result in $2,000-4,000 more in refunds for your household overall. Don't just go with "higher earner claims the kid" - that's outdated advice that ignores how income-based credits actually work. Run the numbers both ways using tax software or consider one of the tools others mentioned. You might be leaving thousands on the table!

As someone who works in tax compliance, I wanted to add one more resource that might be helpful for your situation. The Department of Labor also has guidelines on worker classification that align with the IRS standards, and they have a helpful online tool called the "Economic Realities Test" that can help clarify whether you should be classified as an employee or contractor. What's particularly relevant for dental associates is that the DOL looks at factors like economic dependence - if you're economically dependent on one practice for your income (which most associates are), that strongly indicates an employment relationship rather than an independent contractor arrangement. I'd also suggest documenting your job duties and working conditions before your meeting. Write down specifics like: who sets your schedule, who provides your equipment, whether you can refuse certain patients, if you set your own fees, etc. Having these concrete details will strengthen your position when discussing proper classification. The fact that you're asking these questions as a new graduate shows great financial awareness. Too many people accept whatever classification they're offered without understanding the long-term implications. You're setting yourself up for success by addressing this upfront!

This thread has been incredibly helpful! I'm also a new dental graduate facing this exact situation in Orange County. Reading through everyone's experiences and advice has given me so much confidence about how to approach this conversation with my potential employer. The breakdown of the California ABC test was particularly eye-opening - I hadn't realized how much stricter California's requirements are compared to federal guidelines. Between that and all the specific resources mentioned (IRS Publication 15-A, the DOL's Economic Realities Test, etc.), I feel like I have a solid foundation for making my case. One thing I'm curious about - for those who successfully negotiated W2 classification, how long did the process typically take? Did practices usually give you an answer right away, or did they need time to consult with their attorneys/accountants? I'm hoping to start work soon but want to make sure I allow enough time for this discussion and any follow-up that might be needed. Also, has anyone encountered practices that were genuinely surprised to learn about these classification requirements? I'm wondering if some of the resistance is just lack of awareness rather than intentional misclassification.

This thread has been incredibly informative! I'm actually planning to be in a similar situation next year (L2 visa, continuing remote work for my Canadian employer) and this discussion has highlighted so many complexities I hadn't even considered. A few additional questions based on what I've read here: 1. **Timing of the move**: Several people mentioned strategic timing for tax purposes. Is there an optimal time of year to make the move to maximize benefits like the Foreign Earned Income Exclusion? It sounds like mid-year might be better than January 1st? 2. **Banking considerations**: I noticed mentions of keeping UK bank accounts vs opening US accounts for tax savings. Are there any FBAR (Foreign Bank Account Report) implications I should be aware of when maintaining foreign accounts while being a US tax resident? 3. **Professional licensing**: This might be specific to my field (I'm in tech/software), but has anyone dealt with professional licensing or certification transfers when working remotely for a foreign company from the US? I'm wondering if there are any regulatory complications beyond just the tax issues. The immigration compliance angle that @Molly Hansen brought up is particularly eye-opening. It really drives home the importance of getting professional help rather than trying to wing this on my own. For those who've been through this process - roughly how much should I budget for professional tax advice in the first year? I want to make sure I'm prepared for all the costs involved beyond just the taxes themselves. Thanks again to everyone who's shared their experiences - this has been incredibly valuable!

This has been such a comprehensive discussion! As someone who just went through the L2 visa remote work situation myself, I wanted to add a few practical tips that might help others avoid some of the pitfalls I encountered. **Documentation is everything**: Start keeping meticulous records NOW, before you even move. I created a spreadsheet tracking every day I was physically present in each country, all tax payments made, and copies of every form filed. This saved me countless hours during tax season and will be invaluable if USCIS ever questions my compliance history. **Banking strategy**: I kept my foreign accounts open but opened a dedicated US account specifically for tax obligations. Having separate "buckets" made it much easier to track what I owed to each country and avoid accidentally spending money I'd earmarked for taxes. **Quarterly payments are crucial**: Don't underestimate the importance of making quarterly estimated payments to the US. Even if you expect foreign tax credits to offset most of your liability, being late on estimated payments can trigger penalties that add up quickly. **State tax research**: Definitely research your destination state's specific rules. I moved to a state I thought would be tax-friendly, only to discover they had very aggressive sourcing rules for foreign income that cost me more than I'd budgeted for. The immigration compliance angle mentioned earlier is spot-on - proper tax compliance really is an investment in your future US immigration prospects. Getting professional help upfront is much cheaper than trying to fix mistakes later when you're applying for permanent residence. For anyone just starting this journey, feel free to reach out if you have specific questions about the practical day-to-day aspects of managing this situation!

This thread has been absolutely incredible! I'm 31, single, and like so many others here, I've been claiming 0 exemptions on everything for the past 6 years thinking I was being "financially responsible." After reading through all these detailed experiences, I'm realizing I've been doing myself a huge disservice by giving the government an interest-free loan of $2,000+ every year. The biggest game-changer for me was understanding that federal and state withholding are completely separate systems. I had no clue that the 2020 federal W-4 overhaul didn't affect state forms, which still operate on the old exemption system. This explains why my tax situation has felt so confusing lately! Based on the overwhelming consensus here, I'm definitely making the switch to 2 exemptions on my state form. The real-world examples of people seeing an extra $100-200 monthly in take-home pay is exactly what I need right now - that money could go straight toward my emergency fund or help with these crazy grocery prices instead of sitting with the government earning nothing. I'm also planning to try taxr.ai since multiple people had great success with it. Sounds way more reliable than trying to interpret those mind-numbing IRS publications or waiting on hold for hours just to ask basic questions. Thank you to everyone who shared such practical, detailed advice with actual numbers and timelines. This community discussion has been more valuable than any official tax guide I've ever tried to read. Time to stop over-withholding and start keeping my own money where it belongs!

This thread has been a total game-changer for me! I'm 28, single, and have been in the exact same boat as everyone else here - claiming 0 exemptions on everything because I thought it was the "safe" way to go. After reading through all these detailed experiences, I'm kicking myself for essentially giving the government a $2,400+ interest-free loan every year while struggling to build my savings. The federal vs state withholding explanation was huge for me. I had absolutely no idea these were separate systems, especially after the 2020 federal W-4 changes. I've been treating them like they work the same way this entire time! What really convinced me to make the change was seeing so many people share their actual results - the extra $100-200 monthly in take-home pay would make a real difference in my budget right now. That's money I could be putting toward my student loans or building an emergency fund instead of waiting for a lump sum next April. I'm definitely going to switch to 2 exemptions on my state form based on everyone's advice here. I'm also planning to check out taxr.ai since multiple people had success with it - sounds way better than trying to decipher those confusing tax forms on my own. One quick question though - I'm in California, so I'm assuming the 2 exemptions advice applies here too? Our state taxes are pretty high, so I want to make sure I'm not going to end up owing a bunch come tax time. Thanks to everyone for sharing such practical, real-world advice. This community is amazing for actually helping people optimize their finances instead of just giving generic guidance!