One thing nobody's mentioned yet - make sure you're considering the difference between short-term and long-term capital gains/losses. They're taxed at different rates! Short-term gains (assets held less than a year) are taxed at your ordinary income rate, while long-term gains get preferential lower tax rates. When calculating your net position, short-term losses first offset short-term gains, and long-term losses offset long-term gains. If you have excess in one category, then it can offset the other category. For your specific situation with the $700 net loss, it doesn't matter much, but if you're trying to be strategic about which positions to sell, the holding period can make a big difference in the tax impact.

Great question about capital loss deductions! Just to clarify the mechanics for anyone else reading - when you have a net capital loss like your $700, you can indeed deduct it dollar-for-dollar against your ordinary income, up to the $3,000 annual limit. The key thing to understand is that capital losses first offset capital gains (which you've calculated correctly), and then any remaining net loss can reduce your other taxable income. Since your net loss is only $700, you'll be able to deduct the full amount this year. One additional consideration: if you're close to year-end, you might want to review whether you have any other positions with unrealized gains or losses. Sometimes it makes sense to do a bit more tax-loss harvesting to optimize your overall tax situation, especially if you're in a higher tax bracket where every deduction counts more.

Just to clarify something important - whatever you claim, make sure you're getting receipts and the provider's tax ID number (EIN) or their Social Security number. The IRS requires you to report this information on Form 2441 when you claim the Child and Dependent Care Credit. I made this mistake once and had my return rejected. Had to go back to all my providers and get their tax info. Some smaller operations or individual instructors might be reluctant to provide this info (especially if they're not reporting the income), which is another indication they probably don't qualify as care providers for this credit.

Smart decision, Natasha! You're absolutely right to be cautious with tax claims. The distinction between care and instruction can be tricky, but the IRS is pretty strict about it. One thing that might help for future reference - if your daughter ever needs actual childcare (like during school breaks when you're working), look for programs that explicitly market themselves as "childcare" or "supervision" rather than just activities or classes. Even if they include fun activities like martial arts, the key is that their primary purpose is caring for children while parents work. Also, don't forget that your regular daycare expenses can be substantial for the credit - up to $3,000 per child or $6,000 for multiple children, with credit rates between 20-35% depending on your income. That's often a bigger benefit than trying to squeeze in borderline activities anyway.

I feel your pain on this - I had almost the exact same shock last year when I started doing freelance consulting work. The 33% effective rate you're seeing is actually pretty normal when you factor in both the self-employment tax (15.3%) AND the fact that your 1099 income gets added on top of your W-2 income for determining your tax bracket. One thing that helped me was setting up a separate savings account specifically for taxes and automatically transferring 30% of every 1099 payment I received. It sounds like a lot, but it prevented the sticker shock at tax time. Also, don't forget you can deduct half of your self-employment tax as an adjustment to income - it's not huge but every bit helps. For this year, definitely look into all possible business deductions. Even things like a portion of your rent if you have a dedicated home office space, or professional development courses related to your freelance work. Those calculators rarely account for the deductions you can actually claim as a freelancer.

The sticker shock you're experiencing is completely normal for new freelancers! That 33% effective rate is actually pretty typical when you combine federal income tax, self-employment tax (15.3%), and the fact that your 1099 income gets stacked on top of your W-2 earnings. Here's what likely happened with those online calculators - they probably treated your freelance income in isolation rather than considering how it pushes you into higher tax brackets when combined with your regular job. At $19K in additional income on top of your W-2, you're likely hitting the 22% federal bracket on at least part of that freelance money. A few immediate things to consider: - Make sure you're claiming all legitimate business expenses (laptop, software, home office space, even partial internet/phone bills) - Look into the QBI deduction (Section 199A) - you can potentially deduct 20% of your business income - Don't forget the deduction for half of your self-employment tax For next year, I'd strongly recommend making quarterly estimated payments. The "safe harbor" rule means if you pay 100% of this year's total tax liability through withholding and quarterlies, you won't face underpayment penalties even if you owe more. It spreads out the financial impact and prevents that brutal lump sum surprise. The reality is freelance work comes with a much higher tax burden than W-2 income, but proper planning and deductions can definitely bring that percentage down closer to the 25-28% range.

I'm so sorry for your loss, Fatima. Losing both family members in the same year while having to handle their financial affairs must be incredibly overwhelming. You're absolutely right that you can file Married Filing Jointly for 2024 since both spouses died in the same tax year. Here are the key steps: 1. **Mark the return properly**: Write "DECEASED" with each spouse's date of death across the top of Form 1040 2. **Include all income earned up to death dates**: Report wages, pension, investment income through March for your brother and November for his wife 3. **Claim all applicable deductions**: Medical expenses from their final months can be substantial - gather all receipts as these are deductible subject to the 7.5% AGI threshold 4. **File necessary forms**: You'll likely need Form 1310 if expecting a refund, and consider Form 56 to notify the IRS you're acting as their representative Regarding their investments and pension - any payments received after the second spouse's death in November may need to be reported on an estate return (Form 1041) rather than their final 1040, depending on the amounts. Given the complexity of two deaths plus retirement accounts, I'd strongly recommend consulting a tax professional experienced with deceased taxpayer returns. Look for an Enrolled Agent or CPA who specializes in estate taxation - they can guide you through the specific rules and ensure you don't miss any important requirements. Take care of yourself during this difficult time.

I'm so deeply sorry for your loss, Fatima. Handling the tax affairs of loved ones while grieving is one of the most difficult things anyone can face, and you're being incredibly strong by taking this on. You're absolutely correct that you can still file Married Filing Jointly for 2024 since both spouses passed away in the same tax year. Here's what you need to know: **Essential steps:** - Write "DECEASED" with each spouse's date of death at the top of Form 1040 - Report all income earned through March for your brother and through November for his wife - You can claim all their usual deductions and credits - those medical expenses from their final months could provide significant relief - You'll need Form 1310 if there's a refund due, and consider Form 56 to formally notify the IRS of your role **Important considerations:** - Any pension or investment income received after November (second death) may need to go on an estate return (Form 1041) rather than their final 1040 - Medical expenses paid within one year after death can still be claimed on the final return - Keep detailed records of what income/expenses occurred before vs. after each death date Given the complexity of two deaths in one year plus retirement accounts, I strongly recommend finding a tax professional who specializes in deceased taxpayer returns. Look for an Enrolled Agent or CPA with estate taxation experience - most general preparers rarely handle these situations. You're doing something incredibly loving for your family during an unimaginably difficult time. Please be gentle with yourself through this process.

This is exactly what happened to me in 2018! The sequence of codes 613 followed by 612 is frustrating but actually gives you valuable information - it proves the IRS received and initially processed your payment before something went wrong. In my case, I had written the wrong tax year on my payment voucher (wrote 2017 instead of 2018), so they applied it to the wrong year initially, then reversed it when they couldn't match it to a return. The money sat in a suspense account for months while I was getting notices about unpaid taxes. When I finally got through to the IRS, they found my payment within 10 minutes using the check number and amount. They transferred it to the correct year and refunded the penalties they had charged me. The whole thing was resolved in one phone call once I reached the right person. Don't panic - your money is definitely in their system somewhere. Bring your bank statement, the check number, and those transaction codes when you call. Ask specifically for a payment trace and mention you can see codes 613/612 on your transcript. This will help the agent understand exactly what happened.

This is incredibly helpful information from everyone! As someone dealing with a similar transcript issue right now, I'm seeing the same 613/612 code sequence on my 2020 return. Reading through all these responses, it sounds like the key takeaways are: 1) The money isn't lost, just misallocated somewhere in the IRS system, 2) Having the bank statement with the cleared check and exact codes ready when calling is crucial, and 3) Asking specifically for a "payment tracer" or "IDRS check payment trace" will get you to the right department faster. I'm definitely going to try the landline tip when I call - I had no idea that could make a difference with their phone system disconnecting people. Has anyone had success calling early in the morning versus later in the day? I'm wondering if there are better times to get through to an actual person.