I adjunct at a community college too! For my $500ish biweekly checks, I have them withhold $100 for federal taxes. My spouse and I are in the 22% bracket with our combined incomes, and this has worked out almost perfectly for the past two years. You could try a similar percentage. Just remember that teaching income stacks on top of your other income for tax bracket purposes, so it's getting taxed at your highest marginal rate. Don't make the mistake I made the first year where I only had 10% withheld because I thought that's what the bracket would be if it was my only job!

I'm dealing with a similar situation with my part-time consulting work! One thing that really helped me was using the IRS Tax Withholding Estimator on their website. You can input all your income sources - your full-time job, your spouse's income, and your teaching income - and it will give you a pretty accurate recommendation for additional withholding. Since you're married filing jointly with two full-time incomes plus the teaching gig, you're likely in the 22% or 24% bracket. For your ~$435 biweekly checks, I'd probably start with requesting around $85-95 in federal withholding. You can always adjust it later if needed by submitting a new W-4. The key thing to remember is that this side income is being taxed at your marginal rate since it's "on top of" all your other income. Better to err on the side of slightly overwithholding than getting hit with underpayment penalties!

Random tip that might help someone - I called FreeTaxUSA's customer support about this exact issue last year, and they were actually really helpful. They told me to go to the Income section > Miscellaneous Income and create an entry for "Compensation from employee stock purchase plan" with the amount being the discount I received. Their support is free even on the basic version, unlike some other tax software. Might be worth trying before spending money on other solutions!

Great to see this got resolved! Just wanted to add one more tip for anyone dealing with employee stock purchase plans in the future - make sure to keep detailed records of all your transactions. When you eventually sell those shares, you'll need to calculate your cost basis correctly to avoid double taxation. The IRS doesn't automatically know about the compensation income you already reported from Form 3922, so you'll need to adjust your basis when reporting the sale on Schedule D. I learned this the hard way when I sold my ESPP shares and initially calculated my gains incorrectly. Had to file an amended return! The taxable discount you report this year becomes part of your cost basis for future capital gains calculations. Also, if your plan allows it, consider the Section 83(b) election for future purchases - it can save you money on taxes in certain situations. Worth discussing with a tax professional if you're planning to participate in the ESPP long-term.

I'm a CPA and want to offer another perspective. While good tax preparers can often find additional deductions, a $10K difference sounds concerning. Here are some possibilities for such a large difference: 1. The preparer might be taking aggressive positions that could trigger an audit 2. They might be claiming credits you're not eligible for 3. They could be incorrectly classifying personal expenses as business expenses 4. They might have found legitimate deductions you missed in previous years and filed amendments Ask for a detailed explanation of what's creating the difference. If they can't explain it clearly or seem evasive, that's a huge red flag.

Has anyone compared getting their taxes done at one of those storefront places (like H&R Block or Liberty Tax) vs those software programs vs an independent CPA? I'm wondering if there's really that much difference between all three options.

Don't forget to look into a SEP IRA or Solo 401k as alternatives. As self-employed individuals, you can contribute much more pre-tax money to these accounts than to a traditional 401k at an employer. While this doesn't directly help with 529 contributions, reducing your overall tax burden may free up more money that you can then put toward 529s with after-tax dollars.

Something nobody's mentioned yet - if you're really committed to funding those 529s, look into Coverdell ESAs as another option. They're more limited ($2k per year per beneficiary), but they cover K-12 expenses too, not just college. My accountant recommended using both types of accounts for our kids.

I just dealt with this last year! I started a photography business, spent about $1200 on equipment and a website, but only made $200 in actual revenue. My tax guy said I could absolutely deduct all those expenses against my other income. The key thing he told me was to show a "profit motive" - basically that I'm trying to make money, not just pursuing a hobby. He had me create a simple business plan, keep logs of time spent working on the business, and document all my marketing efforts. I filed a Schedule C showing a loss for the first year and had no issues. Don't forget you can also deduct home office expenses if you have a dedicated space for the business, even pre-launch!

Great question! I went through something similar when I started my consulting business. Based on my experience and what I learned from my CPA, you should definitely be able to deduct those $650 in startup costs. The IRS considers you "in business" when you're actively working toward launching with genuine profit intent - which it sounds like you clearly have. Your website development, inventory purchases, and business cards all demonstrate legitimate business activity, even without sales yet. A few tips that helped me: - Keep a detailed log of all business-related activities (even time spent researching suppliers, working on your website, etc.) - Save all communications with vendors, web developers, etc. as proof of active business pursuit - Consider getting an EIN if you haven't already - it helps establish business legitimacy - Document your business plan and marketing strategy, even if informal When you file, you'll likely use Schedule C and can claim up to $5,000 in startup costs for your first year. The remaining expenses can be amortized over 15 years. Since you're clearly working toward launch (not just daydreaming), you should be fine claiming these as legitimate business expenses. Just make sure to keep excellent records in case the IRS ever asks questions. Good luck with your launch!