I fixed this exact problem last year by using the "Married but withhold at higher Single rate" checkbox on my W-4. It's simpler than trying to calculate an exact additional withholding amount. This basically makes your withholding closer to what a single person would pay on the same income, which is usually about right when both spouses work. We had the EXACT same situation - my wife's taxes were like 11% and mine were only 6%. After checking that box and submitting a new W-4, my withholding went up to about 15%, which was a little high, but we'd rather get a refund than owe.

This is such a frustrating but common issue! I went through the exact same thing last year. The key problem is that the W-4 form changed significantly in 2020, and most people (including HR departments) don't fully understand how it works for two-earner households. What's happening is that each employer is calculating withholding as if that's your only household income. So your husband's employer sees his $78K salary and thinks "married filing jointly with one child = low tax burden" without knowing about your $115K income that pushes your combined household into much higher tax brackets. Here's what worked for me: I used the IRS Withholding Estimator (irs.gov/W4App) with both our incomes and it calculated that we needed an additional $520 per month withheld from my husband's paycheck. We put this amount in Step 4(c) of his W-4 as "Extra withholding per pay period." For your 2024 taxes that you'll owe, definitely file by April 15th even if you can't pay the full amount immediately. The failure-to-file penalty is much worse than failure-to-pay. You can set up a payment plan online at irs.gov if needed. The silver lining is that once you fix the W-4 forms properly, this won't happen again in 2025!

You might also wanna look into whether u qualify as a real estate professional for tax purposes. If u do, the passive activity loss limitations don't apply to your rental properties, which would make this whole question moot cuz then the losses wouldnt be considered passive in the first place. U need to meet two requirements: 1) more than half ur personal services during the year are in real property trades/businesses, and 2) u perform more than 750 hours of services in real property trades/businesses.

Another consideration for your situation is the timing of when you can use passive losses. If you have suspended passive losses from prior years on the property you're keeping, those can only offset passive income in the current year - they can't offset the depreciation recapture unless you're disposing of that specific property too. However, if you have current year passive losses from your other rental property, those should be able to offset the passive income portion of your gain, including the depreciation recapture. Just make sure you're tracking which losses come from which property, especially if you have suspended losses carried forward from multiple years. Also worth noting - if you're planning any other real estate transactions soon, the timing could affect your overall tax strategy. Sometimes it makes sense to bunch gains and losses in the same year to maximize the offset benefit.

I'm going through the exact same situation right now and this entire thread has been incredibly reassuring! Got the "Action Required" message three days ago and have been in full anxiety mode ever since, checking WMR probably every few hours like it's going to magically update. What really stands out to me is how everyone keeps coming back to that same key phrase: "If we need additional information, we'll mail a notice with further instructions." It's like the golden rule of this whole process - no physical mail means we're just in the waiting phase, not that there's actually some urgent action we need to take despite that scary heading. The success stories from @Ana Erdoğan, @Ethan Moore, and others who went through weeks of this same status and got their full refunds without sending any documents are giving me so much hope. I was literally pulling out every tax document I could find thinking I'd need to submit something, but it sounds like the main skill we need here is just patience (which is honestly harder than organizing paperwork! 😅). I'm definitely going to follow everyone's advice about stepping back from the obsessive WMR checking and limiting it to maybe once a week while doing daily mailbox checks instead. The IRS really should change that "Action Required" wording to something like "Review in Progress" - would save so many people from unnecessary panic attacks! Thanks to everyone for sharing their real experiences. This community is honestly the best resource I've found for dealing with tax anxiety. We're all in this waiting game together! 🙏

I'm going through this exact same "Action Required" situation right now and honestly, reading through all these experiences has been more helpful than anything I could find on the official IRS website! Just got that message yesterday and immediately started spiraling, but seeing so many success stories here is really reassuring. What keeps standing out to me is that crucial phrase everyone mentions: "If we need additional information, we'll mail a notice with further instructions." It's like the anchor point we all need to focus on - no physical mail means we're just in their standard review process, despite how urgent that "Action Required" heading makes it sound. The timeline seems pretty consistent from what I'm reading - @Ana Erdoğan's 4-week experience, @Ethan Moore's 3-week update, and others all got their full refunds without having to send any documents. That gives me real hope that this is just routine verification rather than an actual problem with my return. I'm definitely guilty of the obsessive WMR checking already (probably 20+ times since yesterday 😅), but I'm going to try following everyone's advice about limiting it to once a week and focusing on daily mailbox checks instead. The IRS really needs to fix that misleading "Action Required" wording - "Review in Progress" would save so many people from unnecessary anxiety! Thanks to everyone for sharing their real experiences. This community is honestly a lifesaver for dealing with tax stress. We're all in this waiting game together! 🙏

I've been helping people navigate cash income tax situations for years, and you're definitely on the right track by setting aside 30% and asking the right questions early. Here are a few additional tips that might help: First, consider getting an EIN (Employer Identification Number) for your landscaping work, even as a sole proprietor. It's free from the IRS website and makes you look more legitimate as a business entity. You can still file on Schedule C, but having an EIN gives you more credibility and separates your business identity from your personal SSN on some forms. Second, look into opening a Solo 401(k) or SEP-IRA once you're established. As self-employed, you can contribute a significant percentage of your earnings to retirement accounts, which reduces your current tax liability while building for the future. This is one of the few advantages of being self-employed vs. being a W-2 employee. Third, keep detailed records of any training, licensing, or certification costs related to landscaping. These are fully deductible business expenses that many people overlook. Same goes for work-related phone calls, internet usage for scheduling/communication, and even a portion of your home if you use it for business planning or storage. The most important thing is to stay consistent with your record-keeping from this point forward. The IRS respects taxpayers who make good faith efforts to comply, even if the situation isn't perfect. You're already ahead of most people just by thinking about this proactively.

Rachel, you're being incredibly responsible by setting aside 30% and thinking about this proactively! One thing I haven't seen mentioned yet that might be relevant to your specific situation as a landscaper - if you're providing your own equipment (mowers, trimmers, hand tools, etc.), those are legitimate business deductions that can significantly reduce your tax burden. Also, since landscaping is seasonal work in many areas, you might want to consider whether your income varies significantly throughout the year. If so, you could potentially benefit from income averaging strategies or at least plan your quarterly estimated payments around your peak earning periods. The advice about Schedule C and treating yourself as self-employed is spot on. Just make sure to keep receipts for everything work-related - fuel for equipment, replacement tools, work boots, even sunscreen if you're outside all day. The IRS allows deductions for ordinary and necessary business expenses, and landscaping has quite a few of those. One last tip: if your boss ever decides to start issuing 1099s in the future, make sure your reported income aligns with what you've been filing. Consistency in reporting is key to avoiding red flags.

Just wanted to add that you should also consider opening a dependent care FSA through your employer if they offer one! Since you mentioned daycare costs might come up, you can set aside up to $5,000 pre-tax to pay for childcare expenses. This would reduce your taxable income and save you money on both federal and state taxes. Also, if your girlfriend does go back to work at some point during the tax year, make sure you recalculate who's providing more than half the support. The IRS looks at the total support provided for the entire year, not just while she wasn't working. But based on your income level and the fact that you're covering all major expenses, you should still easily meet the support test even if she has some part-time income later. Keep all those receipts and records that others mentioned - they're super important if you ever get audited on the Head of Household status!

Having a new baby definitely counts as a qualifying life event! You should be able to enroll in a dependent care FSA within 30 days of the birth. Contact your HR department ASAP since there's usually a strict deadline for making changes after a qualifying event. One more tip - if you do end up adding your baby to your employer's health insurance plan, make sure to compare the total costs carefully. Sometimes the premium savings from having the baby on Medicaid vs. your employer plan can be significant, but you might also miss out on additional tax benefits like being able to use a health savings account (HSA) if your employer offers a high-deductible health plan with HSA eligibility. Also, don't forget that if you do pay for your baby's health insurance through your employer, those premiums are typically paid with pre-tax dollars, which reduces your taxable income even further. Just another factor to consider in your overall financial planning!