Just wanted to add one more consideration that hasn't been mentioned yet - make sure you're aware of the quarterly payment due dates if you decide to go that route instead of adjusting your W4. Since your wife made $22K last year and will likely make similar this year, and you're starting your job in July, you'll want to be strategic about timing. The Q3 estimated payment (due September 15) might be a good starting point for your wife if you decide on quarterly payments rather than W4 adjustments. Also, keep in mind that if your wife's business has any seasonal fluctuations, you might want to use the annualized income installment method rather than paying equal quarterly amounts. This can help if her income varies significantly throughout the year. One last tip: whatever approach you choose (W4 adjustment vs quarterly payments), make sure to revisit your calculations in the fall once you have a better sense of both your actual income and your wife's year-end business expenses. You can always make adjustments for Q4 or change your W4 withholding if needed. The key is just getting started with something reasonable rather than trying to get it perfect from day one!

I'm dealing with a very similar situation right now! My husband is a 1099 contractor making about $25K annually, and I just started a new W2 job making $78K. One thing that really helped me was breaking down the calculation into two parts: the self-employment tax (which is pretty straightforward at 15.3% of net income) and the additional income tax from the combined income pushing us into a higher bracket. For your wife's $22K income, you're looking at roughly $3,370 in self-employment tax. Then for the income tax portion, you'll need to figure out what tax bracket your combined income puts you in. With your $85K plus her $22K, you'll likely be in the 22% bracket, so that's another $4,840 in income tax on her income. The tricky part is that your wife can reduce her taxable income significantly with business deductions - home office, supplies, mileage, phone/internet if used for business, etc. This could easily reduce her taxable income by $3-5K, which would lower the overall tax burden. I ended up using a combination approach: I increased my W4 withholding by about $400/month to cover most of it, and my husband makes a small quarterly payment to cover any difference. This way we're not over-withholding too much from my paychecks, but we're still staying current with the taxes. The IRS withholding calculator is definitely your best bet for getting the exact numbers, but hopefully this gives you a ballpark to work with!

Slightly different perspective - before you panic completely, have you tried checking your return against free tax software just to verify if there are actual errors? I've used FreeTaxUSA for years and it's super straightforward. You could input all your info there and see if the numbers match up with what the Fiverr person gave you. This way you'd know for sure if you're being overcharged on taxes due to missing deductions. It might take an hour or two, but it would give you peace of mind before you potentially pay someone else to redo everything.

I'm dealing with a similar back tax situation right now and your story is giving me major anxiety! One thing I've learned through this process is that you absolutely cannot file returns with known errors - it can actually make your situation with the IRS worse, not better. The missing preparer signature is a huge red flag. Any legitimate tax professional should be willing to sign their work. If she's refusing to do that, it suggests she either knows there are problems with the returns or she's not actually qualified to prepare them. For the advertising deductions specifically - those can make a massive difference in what you owe. If she left those off completely, you could be overpaying by hundreds or even thousands of dollars. Given that you're already dealing with back taxes, every dollar counts. I'd give her 24-48 hours to respond and fix everything. If she doesn't, cut your losses and find a local CPA or enrolled agent. Yes, it'll cost more upfront, but it's way cheaper than dealing with IRS penalties later if the returns are wrong. The peace of mind alone is worth it when you're trying to get right with the IRS. Also, definitely keep all your communications with her in case you need to file a complaint later. Good luck!

Has anyone used a tax professional who specializes in disability income? I've been getting different answers from different people and regular tax preparers seem confused by my situation. I have both VA disability (which I know is tax-free) and private disability that I'm not sure about.

I went through this exact same confusion last year! The taxation of your disability benefits really does depend on how the premiums were paid, but there's another important factor that often gets overlooked - some employers automatically enroll you in "voluntary" disability coverage through payroll deduction that looks like you're paying for it, but it's actually processed as pre-tax. Here's what I'd recommend: Request a detailed breakdown from your HR department showing not just that you paid the premiums, but specifically whether those deductions were made on a pre-tax or post-tax basis. Also ask for copies of your original enrollment forms - sometimes these will explicitly state the tax treatment. If you discover that you were indeed paying with after-tax dollars and your benefits are being incorrectly taxed, you can file Form 1040X to amend your return. I had to do this and got back about $2,800 in overpaid taxes. The key is having solid documentation from your employer to support your position. Also, don't feel bad about the confusion - disability income taxation is one of the most misunderstood areas of tax law, and even some tax preparers get it wrong. The important thing is getting it sorted out correctly going forward.

Just an additional tip about Form 2441 - make absolutely sure you have the correct Tax ID number for your provider. I made a typo on mine last year and got a notice from the IRS months later questioning my childcare credit. Had to submit additional documentation to prove the expenses were legitimate. For anyone using multiple providers or having a nanny, remember each provider needs their own line on Part I, with their individual Tax ID (SSN for individuals or EIN for businesses). And keep records of payments - bank statements, canceled checks, or receipts! The IRS loves to verify these credits.

Great thread! I went through the exact same confusion with Form 2441 last year. One thing that really helped me was understanding the income phase-out for the credit percentage. At your $115,000 income level, you'll get 20% of your qualifying expenses as mentioned, but it's worth knowing that if your income was under $15,000 you'd get the full 35% rate. Also, don't forget that both you and your wife need to have earned income for the year to qualify for the credit (or one spouse can be a full-time student). Since you mentioned you both work full-time, you're good there. The $6,000 limit for two kids can be frustrating when you're paying so much more, but remember that the FSA option (if your employers offer it) can help stretch your tax savings. You can contribute up to $5,000 pre-tax to a Dependent Care FSA AND still get the credit on remaining qualifying expenses up to the $6,000 limit. Just make sure to coordinate them properly on Part III like others mentioned!

Another thing to consider - if you continue filing separately, and your wife has to itemize when she otherwise wouldn't want to, she might not have enough deductions to exceed the standard deduction amount. In that case, she would just list all her itemized deductions (even if the total is less than the standard deduction) and potentially pay more tax than necessary. This is why the married filing separately status can be so punitive - you get stuck with the worst of both worlds sometimes.

I'm a tax preparer and can confirm what others have said - this is a real rule that's often overlooked. The technical citation is IRC Section 63(c)(6)(A), which states that if one spouse itemizes deductions, the other spouse's standard deduction is zero, effectively forcing them to itemize as well. What's interesting about your situation is that you've been non-compliant for years without detection. This highlights a gap in IRS enforcement - their matching systems are sophisticated for things like W-2s and 1099s, but they don't routinely cross-reference deduction methods between married filing separately returns. However, I'd strongly recommend getting compliant going forward. If either of your returns ever gets selected for examination (audit), the first thing they'll check is whether you're both using the same deduction method. The penalties and interest on any additional tax owed could add up quickly. Also consider that your wife's father may not be aware of this rule - it's one of those technical requirements that even some preparers miss because it's not intuitive and the software doesn't always catch it when preparing returns separately.