This is exactly the kind of situation that can really stress out first-time filers, but you're handling it great by asking questions! What you're seeing is completely normal for school district employees. Just to add to what others have said - the reason you have two localities is likely because you live in one tax jurisdiction (your city) and your school district spans into another tax jurisdiction. School districts often cross municipal boundaries, so employees end up paying local taxes to multiple areas. The health insurance (SECT125) difference you noticed is the key clue here. One locality treats pre-tax health insurance as non-taxable wages, while the other includes it in taxable wages. That's why your Box 18 amounts differ by exactly that amount. When you're entering this in your tax software, make sure to enter both localities exactly as they appear in Box 20. Don't round numbers or try to "fix" anything - the software needs the exact amounts to properly calculate your local tax obligations and any refunds you might be owed. One tip: keep a copy of this W-2 handy next year, because you'll likely see the same pattern. Once you do it once, it becomes much easier!

Don't worry, you're definitely not alone in being confused by this! I went through the exact same thing when I first started working for a school district. The multiple localities thing is super common but nobody really explains it beforehand. One thing that helped me was calling my payroll department after I filed my taxes the first time - they actually have a FAQ about this specific W-2 situation because so many employees ask about it. They confirmed that the Box 18 differences are always related to how each locality treats pre-tax deductions like health insurance, parking, or transit benefits. Since you're filing on your own, I'd also recommend double-checking that your tax software properly calculated any local tax refunds or balances due. Sometimes when you have multiple localities with different withholding rates (like your Box 19 amounts), you might owe a small amount to one and get a refund from the other. You're asking all the right questions and being thorough - that's exactly what you should be doing as a first-time filer!

Has anyone considered the "relation-back doctrine" in this situation? According to my accountant, this is what applies to check payments rather than just constructive receipt. I was told that a check payment is considered made when the check is delivered as long as: - It's dated the day of delivery or earlier - It's delivered before year-end - There's no restriction on cashing it - It's cashed within a reasonable time (usually considered to be within 30 days) This is different from constructive receipt which is more about when the recipient should recognize income.

I went through something very similar with a year-end payment to a subcontractor. The IRS Publication 538 actually addresses this specific scenario under "Payment by Check" rules for cash basis taxpayers. The bottom line is that your deduction belongs in 2023 because that's when you delivered the check, regardless of the ACH processing delays between your accounts. The key factors that support this are: 1) You delivered the check on December 30, 2023 2) The contractor could have deposited it immediately (no restrictions) 3) You had initiated the transfer to ensure funds would be available The fact that ACH rules created a delay in your account doesn't matter for tax purposes - what matters is that you made the payment in good faith with reasonable expectation it would clear. Since it did clear without bouncing, you're golden for the 2023 deduction. For the contractor, they report it as 2023 income since that's when they received the check. The deposit timing is irrelevant under constructive receipt doctrine. Just make sure you keep documentation of the transfer initiation date and the check delivery date in case you ever need to support the timing during an audit.

This is such a great question! I went through the same confusion when I switched jobs last year. One thing that really helped me understand the process was learning that the W4 redesign in 2020 made the calculations much more transparent, but also more complex behind the scenes. Your situation with higher salary but lower withholding makes perfect sense when you break it down: 1. Your 6% 401k contribution (about $4,020/year) reduces your taxable income significantly 2. The 2 dependents you claimed likely qualify for the $2,000 child tax credit each, which reduces your withholding 3. The new W4 is generally more accurate than the old allowance system, so you're probably getting closer to your actual tax liability I'd recommend running your numbers through the IRS withholding calculator at least once to make sure you're on track. The calculator will tell you if you need to adjust your W4 to avoid owing at tax time. Since you're concerned about owing, you might want to consider adding a small amount in Step 4(c) for additional withholding - even an extra $25-50 per paycheck can make a big difference come tax season. The key thing to remember is that withholding is just an estimate based on your W4 info. Your actual tax liability depends on your full financial picture for the year.

Great discussion here! I'm dealing with something similar and wanted to share what I learned from my payroll department. They explained that the actual withholding calculation happens in several steps: 1. Start with gross pay for the pay period 2. Subtract pre-tax deductions (like your 401k, health insurance, etc.) 3. Apply the withholding method from Publication 15-T using your W4 info 4. The system accounts for your filing status, dependents, and any additional withholding you requested What's interesting is that the dependent credits ($2,000 per qualifying child) don't just reduce your final tax - they actually reduce the amount withheld from each paycheck throughout the year. So claiming 2 dependents means roughly $4,000 less in total withholding across the year, which explains why your paychecks might look bigger even with the higher salary. The 401k contribution is probably the biggest factor though - 6% of $67,000 is over $4,000 in pre-tax reduction, which puts you in a lower effective bracket for withholding purposes. Combined with the dependent credits, that's a significant reduction in withholding compared to your previous job. I'd echo the advice about using the IRS withholding calculator, especially since you switched jobs mid-year. It'll help you see if you're on track or need to adjust!

Based on your description, you should definitely qualify for material participation on both properties. The key thing to remember is that time spent on renovation and improvement activities absolutely counts toward your material participation hours, even when the property isn't generating income. For the property under remodel, all those hours you're spending coordinating with contractors, making design decisions, purchasing materials, and planning the renovation are qualifying activities. The IRS considers these to be part of the management and operation of your rental property. One tip for your CPA meeting: bring documentation of your time logs for both properties. If you haven't been tracking formally, start now and try to reconstruct what you can from recent months. Also, since you mentioned you handle "all aspects" of managing these properties, you'll likely meet Test #2 (substantially all participation) or Test #3 (100+ hours with no one else participating more) even if you fall short of the 500-hour threshold on either individual property. Your CPA should be able to confirm this, but you're in a strong position to claim material participation for both properties and deduct the losses from your remodel property against your other income.

Just wanted to add another perspective on the documentation piece - I've been managing rental properties for about 8 years and have been through two audits. One thing that really helped me was creating separate time logs for each property, especially when one is under renovation like yours. For the property being remodeled, I'd suggest categorizing your time into buckets like "Planning & Design" (researching materials, meeting with contractors), "Project Management" (coordinating work, inspections), "Financial Management" (getting quotes, paying invoices), and "Direct Labor" (any hands-on work you do yourself). This level of detail shows the IRS that you're truly engaged in material participation, not just passively investing. Also, don't forget that travel time to and from the properties counts toward your hours! If you're driving to meet contractors, inspect work, or pick up materials, log those hours too. It all adds up and strengthens your material participation case. Your situation sounds very similar to mine from a few years back, and my CPA had no issues claiming material participation for both the operating property and the one under renovation. The key is showing that consistent, substantial involvement in the business operations.

Anyone know if we're supposed to enter these 1042-S values in local tax software? I use the Australian equivalent of TurboTax and there's nowhere obvious to put "foreign tax paid" from these forms.

Great breakdown from everyone here! As someone who's been through this exact situation, I want to emphasize that the 1042-S is really just a "receipt" showing what happened with your US-source income and withholding. The key thing to check is Box 7a (withholding rate) against your country's tax treaty rate. Australia has a pretty favorable treaty with the US - for most types of income like AdSense, the rate should be 0% or very low. If you're seeing 30% withholding, that means your W-8BEN wasn't properly processed or there was some other issue. One thing I learned the hard way: even if everything looks correct on your 1042-S, make sure you're reporting this income on your Australian tax return. The ATO can cross-reference this data, and you'll want to claim any foreign tax credits for whatever was withheld. Keep these forms with your tax records - they're essentially proof of income and tax paid that you may need later. If you're getting different withholding rates year over year for the same income source, that's usually a red flag that something needs to be fixed with your W-8BEN.