This has been such a valuable thread! I'm dealing with a similar situation where my sales tax deduction estimate dropped despite a significant income increase, and all the explanations about BLS consumption data and spending pattern models finally make it click. What I find particularly useful is learning that the IRS essentially assumes people at different income levels have different spending behaviors - not just spending more money, but spending it on different categories of goods and services. Higher earners apparently get modeled as putting more money toward savings, investments, and non-taxable services rather than just buying proportionally more taxable goods. For anyone else trying to figure out their specific situation, it sounds like there are several good options: using analysis tools to understand how your situation maps to the IRS calculations, getting direct clarification from IRS agents (with some creative solutions for the phone system delays), or manually tracking receipts if you think your spending patterns differ significantly from the modeled assumptions. The technical issues with browser inconsistencies are definitely concerning though - tax calculations should be rock solid regardless of which browser you're using. That's something the IRS IT department needs to address. Thanks to everyone who shared their experiences and solutions here. This kind of practical insight is exactly what you need but can never find in the official documentation!

This thread has been incredibly helpful! I've been scratching my head over the same issue - my income went up about 40% this year but the IRS sales tax calculator is giving me a lower estimate than last year. The explanation about BLS consumption data and how spending patterns change at different income levels finally makes sense of what seemed like a broken calculator. It's counterintuitive that earning more doesn't automatically mean a higher sales tax deduction, but the logic about higher earners allocating more to savings and non-taxable services is spot on. I'm curious though - does anyone know if there's a threshold where it becomes worth challenging the calculator's assumptions? Like if you're in a situation where your actual spending on taxable goods is significantly higher than what the BLS data suggests for your income bracket? Also really appreciate all the tool recommendations here. Going to try taxr.ai to get a better breakdown of how my situation maps to the IRS calculations. Better to understand what's happening than just accept a number that doesn't make intuitive sense!

I went through something very similar when I got married in 2023! The anxiety is totally understandable, but you're likely in much better shape than you think. A few key points that helped ease my mind: - Single withholding rates are typically higher than married rates, so you've probably been giving the IRS an interest-free loan all year - Filing status for your tax return is based on your marital status on December 31st, not what your W-4 says - For your income levels ($78K + $65K), married filing jointly will almost certainly be your best option The IRS actually expects situations like this - life changes happen and people don't always update their withholding immediately. As long as you file correctly now (married filing jointly), you should be fine. You might even get a nice refund! Don't forget to update those W-4s with your employers ASAP for 2025 though. You can use the IRS withholding calculator on their website to figure out exactly what to put on the new forms.

I completely understand the panic you're feeling right now! I work as a tax preparer and see this situation ALL the time, especially with newlyweds. The good news is that you're actually in a much better position than you think. Since you've both been withholding at the "Single" rate all year, you've likely had MORE taxes taken out than necessary, not less. Single withholding is more conservative (higher) than Married Filing Jointly withholding. So instead of owing money, you'll probably get a decent refund! For your 2024 tax return, you should definitely file as Married Filing Jointly - this will give you the best tax outcome for your combined income levels. The W-4 status only affects payroll withholding throughout the year; your actual filing status is determined by your marital status on December 31st. A few action items for you: 1. File your 2024 return as Married Filing Jointly (you'll likely get a refund) 2. Update your W-4s with your employers ASAP for 2025 3. Use the IRS withholding calculator to get your 2025 withholding amounts exactly right You haven't done anything wrong - life happens and the IRS understands that people don't always update their paperwork immediately after major life changes. Take a deep breath - you're going to be just fine!

I actually used to work for a tax prep software company (not TurboTax but a competitor) and the stuff that goes on behind the scenes is unbelievable. These companies spend MILLIONS lobbying Congress to keep taxes complicated and prevent the IRS from offering pre-filled returns like they do in other countries. The whole industry exists because they've created an artificial problem. In most developed countries, the government sends you a pre-filled tax form that you just need to verify and sign. But here, we've made it so complicated that people are scared to do it themselves. The free filing program? That was a deal the industry made to prevent the government from creating its own free filing system. They promised to offer free services but then hid them and created obstacles to finding them.

I've been using FreeTaxUSA for the last 3 years and it's WAY better than TurboTax. Federal filing is completely free no matter how complicated your taxes are, and state is only $15. No hidden fees or upsells constantly popping up. TurboTax tried to charge me $120 for self-employment income the year before I switched. FreeTaxUSA handled my Schedule C, home office deduction, and mileage tracking for $0. The interface isn't as pretty but it works perfectly.

I'm not sure if anyone mentioned this, but most tax software has a specific "part-year resident" wizard or interview section. For example, in TurboTax, there's a separate section for "I lived in more than one state." Have you specifically completed that section? Also, double-check your W-2s. Sometimes employers mess up and put the wrong state code on your W-2, which can cause exactly the issue you're describing. My company once put CA on my W-2 even though I had moved to OR, and it caused a similar double-taxation problem.

This is a classic multi-state tax issue that trips up a lot of people! The key thing to understand is that you should NOT be paying full income tax to both states - that's definitely wrong. Here's what's likely happening: your tax software is treating you as a full-year resident of both states instead of a part-year resident. This causes it to calculate taxes on your entire annual income for both states, which is exactly what you're seeing. To fix this, you need to: 1. Make sure you've selected "part-year resident" (not just "resident") for both NY and VA 2. Enter your exact move date (July 1st, 2024) 3. Verify that your NY income is only what you earned Jan-June while living in NY (~$52k) 4. Verify that your VA income is only what you earned July-Dec while living in VA (~$19k) The taxable income amounts you're seeing ($61k for NY, $58k for VA) suggest the software is applying deductions incorrectly or double-counting income. Once you fix the residency settings, those numbers should drop dramatically. Also, just to confirm - you mentioned having separate W-2s from each employer. Make sure when you enter each W-2, you're telling the software which state that job was performed in. This helps the software properly allocate the income. Good luck! This should result in a much better outcome once sorted out properly.

I completely understand your confusion - this is one of those things that seems more complicated than it actually is! You're absolutely correct that those VMFXX dividends don't need to be reported on your taxes. Since VMFXX is the settlement fund within your Roth IRA, any earnings there are just as tax-sheltered as earnings in your VTTSX fund. Think of it this way: your Roth IRA is like a special tax-free zone, and VMFXX is just the "lobby" of that zone where your money waits before moving to the main investment floor. Everything that happens in that lobby is still within the tax-free zone. One tip for peace of mind: you can actually adjust how long money sits in VMFXX by setting up automatic investing with a shorter frequency if you want. But honestly, those small dividends you're earning while waiting are just a nice little bonus that will compound tax-free over the decades. You're doing great with your investment strategy - stick with it!

As someone who works in tax preparation, I can confirm everything others have said here is absolutely correct! Those VMFXX dividends are completely tax-sheltered within your Roth IRA container. What might help ease your mind even further: Vanguard is required by law to send you a 1099-DIV for ANY taxable dividend income. Since you're not receiving one for your VMFXX earnings, that's Vanguard's way of confirming these dividends aren't taxable. They have sophisticated systems that track which accounts are tax-sheltered and which aren't. I see this confusion constantly during tax season - new investors panic about small transactions they see in their retirement accounts. The beauty of the Roth IRA is its simplicity: contribute after-tax dollars, and then forget about taxes until you're retired and taking distributions (which will be tax-free if done correctly). Those tiny money market dividends are just working in your favor, compounding tax-free over the decades ahead. Keep up the excellent work with your consistent investing approach!