Something nobody mentioned yet - look into the Qualified Business Income Deduction (Section 199A). Depending on your total income and the nature of your side gig, you might qualify for up to a 20% deduction on your net self-employment income. Its a bit complicated but worth checking out! For example, if your qualified business income is $65k after expenses, you could potentially deduct another $13k! There are income phaseouts though, so check if your total income puts you over the limits.

Great breakdown everyone! As someone who just went through this exact situation, I wanted to add a few practical tips that might help Brandon and others: 1. **Keep meticulous records** - I use a separate business checking account for all side gig income and expenses. Makes tracking so much easier at tax time. 2. **Business vs hobby distinction** - The IRS looks at whether you're trying to make a profit. If your side gig consistently loses money, they might classify it as a hobby, which limits your deductions. 3. **State considerations** - Don't forget some states have their own self-employment taxes or different rules for business income. Check your state's requirements too. 4. **Mid-year planning** - Since you're making good money on both sides ($130k + $65k), consider increasing your W4 withholding from your day job to help cover the extra tax burden from self-employment income. Sometimes easier than quarterly payments. The combination of self-employment tax + higher tax bracket can be a shock the first year, but with proper planning and all these deductions mentioned, it becomes much more manageable!

Has anyone used the IRS's own QBI worksheet rather than online calculators? I found it in the Form 1040 instructions and it seems more detailed than most online tools. It definitely accounts for the thresholds and limitations we're discussing.

The IRS worksheet is definitely the most accurate approach, but you're right about it being complex. As a CPA who helps clients with QBI calculations regularly, I always recommend starting with the official worksheet to get the correct baseline calculation before using any online tools. One tip that helps avoid calculation errors: work through each section methodically and double-check that your "qualified business income" number excludes reasonable compensation from your S-corp. I see clients mess this up frequently - they include their W-2 wages in the QBI amount when it should only be the remaining business profits. For Dylan's original question about the $340K joint income with $250K from the S-corp - make sure you're clear on whether that $250K is before or after your reasonable compensation. If it's after, then you're on the right track. If it includes your salary, you'll need to subtract that first to get your actual QBI amount.

Just wanted to add a quick tip that helped me when I was in a similar situation - if your company uses ADP like you mentioned, there's often a "pending" status that shows up even when your W4 change goes through successfully. The system sometimes takes 24-48 hours to update the display, but the actual change might already be processed on the backend. You can check with your next paycheck to see if the withholding changed, or call your HR department to confirm the status. I was worried my change didn't go through for a whole week until I realized it was just a display lag in the system. Also, since you mentioned you're counting on maximizing your summer earnings - once you get the exempt status sorted, you might want to track your total earnings throughout the summer to make sure you stay under the standard deduction threshold. That way you can avoid any surprises at tax time next year!

I went through this exact situation last year with my summer internship! The good news is that yes, you can absolutely submit a new W4 to correct this - it's not permanent and employers deal with these changes regularly. Here's what worked for me: I went directly to HR with a printed, corrected W4 form rather than relying solely on the online system. I explained that I had made an error on my initial form and needed to claim exempt status. They processed it within a few days and my next paycheck had zero federal withholding. Unfortunately, you won't get the money already withheld back directly - that will come as part of your tax refund when you file next year. But the bright side is if you truly qualify for exempt status (which it sounds like you do based on your summer earnings expectations), you'll get all of that federal withholding back as a refund. One important thing to remember: if you file as exempt, you'll need to submit a new W4 by February 15th next year to maintain that status, otherwise it automatically reverts to maximum withholding. Also, don't forget that Social Security and Medicare taxes (7.65%) will still be withheld regardless of your exempt status - that's totally normal. Go talk to HR in person with a corrected form - they should be able to help you get this sorted quickly!

One thing to keep in mind when calculating your basis - the IRS has a "safe harbor" provision for home improvements that might help with your documentation concerns. If you can show that similar improvements in your area during the same time period cost within a reasonable range of what you're claiming, that's generally acceptable even with some missing receipts. Since you mentioned getting quotes from contractors, those estimates can actually be really valuable for establishing the fair market value of materials used, even though you can't include labor. For example, if a contractor quoted $50k total for a kitchen remodel and you know labor typically represents 60-70% of renovation costs, you could reasonably estimate that $15-20k worth of materials were involved. Also worth noting - given your substantial gain even after the primary residence exclusion, you might want to consider if any of the work qualifies for energy efficiency tax credits that could offset some of your tax liability. Things like new windows, HVAC systems, or solar installations might qualify for additional benefits beyond just adding to your basis.

I went through something very similar when I sold my house last year after doing tons of DIY work over a decade. Here's what I learned from working with my CPA: You absolutely cannot include your labor value, but don't overlook these often-missed items that CAN be added to your basis: - Permits and inspection fees for all those projects - Architectural plans or design consultations you paid for - Specialty tools you had to buy specifically for permanent improvements (like a tile saw for bathroom work) - Delivery fees for materials - Dumpster rentals for construction debris - Any structural engineering reports if you had foundation work done For missing receipts from older projects, my accountant had me create a detailed log with project dates, square footage affected, and reasonable material cost estimates based on current prices adjusted for inflation. Home Depot and Lowe's can sometimes provide purchase history going back several years if you had a Pro account or used the same credit card consistently. One thing that really helped was finding old permits in our city's online database - even projects I'd forgotten about were documented there with dates and scope descriptions that helped justify our improvement timeline. Given your $1M+ gain situation, definitely consider hiring a tax professional who specializes in real estate transactions. The cost will be worth avoiding potential audit issues with such large numbers involved.

I went through almost the exact same situation last year! Filed in February, then had to amend twice - once for a corrected 1099-DIV and again for a late K-1 from a partnership investment. It's incredibly stressful but you absolutely did the right thing filing amendments as soon as you received the additional documents. One thing that helped me was keeping detailed records of when each document arrived (I even took photos of the envelopes with postmarks). The IRS understands that taxpayers can't file what they don't have, and the sequential processing of amendments is standard procedure. For the payment on your second amendment, I'd echo what others said about paying it manually rather than waiting. I made the mistake of waiting and ended up paying extra interest. You can use IRS Direct Pay online - just select "Form 1040" and enter 2023 as the tax year. The peace of mind is worth it, and it stops the interest clock from ticking. The 16-20 week processing time is unfortunately accurate right now. My first amendment took 18 weeks, and the second one didn't even start processing until the first was completely done. Hang in there - the waiting is the worst part, but it sounds like you handled everything correctly!

I can relate to this stressful situation! I had a similar experience two years ago when I received a late K-1 from a real estate investment trust after already filing an amended return for a corrected 1099-B. The sequential processing really is standard - they won't even look at your second amendment until the first one is completely processed. One thing I learned that might help you: when you make that manual payment for your second amendment (which I definitely recommend), make sure to include a note or reference indicating it's for your 2023 amended return. I used the "additional information" field in IRS Direct Pay to note "Payment for 2023 1040X filed 4/10/2024" just to create a clear paper trail. Also, don't be surprised if your refund or final balance takes even longer to sort out after they process everything. In my case, they processed both amendments but it took an additional 4-6 weeks for them to apply all the payments correctly and send me the final account transcript. The good news is that once they start processing, they're usually pretty accurate with the calculations. The key thing is you did everything right by filing amendments as soon as you received the additional documents. That protects you from any penalties for underreporting income, even if the processing takes forever.