My wife and I just went through this exact situation! We both made around $60k and I was previously HOH with our daughter. Our refund dropped by over $4k after getting married. Here's what we did: 1) Adjusted our W-4s so we weren't getting a big refund but also not owing at tax time. A big refund just means you overpaid throughout the year anyway. 2) Maxed out our 401k contributions which lowered our taxable income and moved us to a lower tax bracket. 3) Started using an HSA (Health Savings Account) which is triple tax advantaged and reduced our taxable income even more. Don't just look at the refund amount. Look at your total tax paid vs total income. That's the real measure of whether you're coming out ahead.

I went through this exact same shock when my husband and I got married! We both earned around $70k and I was filing HOH with my son. Our first year married filing jointly was such a wake-up call. One thing that really helped us was realizing that the "marriage penalty" isn't necessarily permanent - it's more about tax planning strategies. We ended up: 1) Contributing more to our retirement accounts to lower our combined taxable income 2) Looking into whether married filing separately might work better for us in specific years (though you lose some credits this way) 3) Timing certain deductions and expenses strategically The other reality check for us was that even though our refund was smaller, we were still paying less in total taxes than we would have as two single people once we factored in things like lower health insurance premiums through spouse coverage and other married benefits. It's frustrating that the tax code penalizes dual-income couples like this, but there are ways to work around it. Definitely run the numbers both ways (MFJ vs MFS) each year to see what works best for your situation!

Quick tip from someone who's dealt with Form 2210 multiple times: check if you qualify for any of the penalty waivers! The IRS can waive the penalty if: 1. You had a casualty, disaster, or other unusual circumstance 2. You retired after age 62 or became disabled during the tax year or previous year AND the underpayment was due to reasonable cause 3. There was an uneven income distribution during the year and using the standard method would be unfair Given your land sale and layoff, you might qualify under #1 or #3. Worth exploring!

I've been through a similar situation and want to add some clarity on why your software might be showing no penalty despite the large capital gain. One thing that often gets overlooked is the "de minimis" rule - if your total tax owed (after withholding) is less than $1,000, there's no underpayment penalty at all. But with your $15,500 tax liability and $9,200 withholding, that's clearly not your situation. What's more likely happening is that your software is applying the penalty calculation correctly but benefiting from how withholding is treated. Since you had steady employment through October, your $9,200 in withholding gets spread evenly across all four quarters for penalty purposes. This means each quarter is credited with about $2,300 in payments. For the capital gains portion specifically, the penalty would only apply to the amount that exceeds what your "deemed" quarterly withholding covers. Given that you made a large payment in January 2024 that created a refund situation, it's possible the actual penalty amount is quite small or even zero when calculated properly. However, I'd strongly recommend double-checking this by either downloading the actual Form 2210 from your software or consulting with a tax professional. The IRS will definitely scrutinize large capital gains transactions, and you want to make sure you're not missing anything that could trigger penalties or interest later.

Has anyone here tried using one of the online tax prep services for their S-Corp returns instead of a CPA? I'm wondering if that could be a cheaper alternative that still gets the job done right.

I'm dealing with a similar situation as an S-Corp owner myself. That $10,500 quote is absolutely ridiculous for your business size and complexity. I paid $3,800 last year for similar revenue and services. Here's what I'd suggest: Get at least 3 quotes from different firms and make sure you're comparing identical services. Ask each firm to break down exactly what's included - tax prep, quarterly planning, audit protection, etc. Also, don't be afraid to negotiate. When I got my first quote of $7,200 this year, I showed them quotes from competitors and they came down to $4,100 for the same services. Some firms will quote high initially to see if you'll pay it. The key is finding someone experienced with S-Corps who can explain their value proposition clearly. If they can't justify the price difference with specific additional services or expertise, they're probably overcharging.

Has anyone had experience with changing the account owner on a 529 plan? I'm thinking about making my son the owner of his 529 to simplify this whole process for future years.

Just went through this exact situation last year with my daughter! The key thing to remember is that even though you own the 529 account and receive the 1099-Q, your son can absolutely claim the education credits on his own return as long as he's not your dependent. Here's what we learned: The 1099-Q itself doesn't need to be "reported" as income if all the distributions went toward qualified education expenses. Your son would claim the American Opportunity Tax Credit or Lifetime Learning Credit based on the actual tuition and fees paid, regardless of the funding source. One important note - make sure to run the numbers both ways before deciding. Sometimes parents in higher income brackets actually benefit more from claiming the dependent exemption than the student gains from the education credits, especially if the student has little other income. But if you're phased out of the education credits due to income limits, then having your son claim himself usually makes more sense. Also keep good records showing the 529 distributions matched up with qualified expenses, just in case the IRS has questions later. The account ownership doesn't matter for tax purposes - what matters is who the beneficiary is and whose education expenses were paid.

Isn't it amazing how the IRS can demand we submit everything correctly and on time, but their own systems can't communicate with each other properly? One alternative approach: log in to your IRS online account and check your account transcript rather than just the dashboard. Does your transcript show any TC 570 followed by a TC 571 code? That sequence typically indicates verification issues that were subsequently resolved. Also, have you checked your refund status through the Where's My Refund tool? Sometimes that will show processing even when the online account still shows verification needed. The IRS digital infrastructure was designed in the stone age and upgraded with duct tape and wishful thinking.

I'm dealing with this exact same situation right now! Verified by phone on March 12th, agent said everything looked good and my return would continue processing within 9 weeks. Then yesterday (March 20th) I logged into my online account and there's that bright red banner telling me to verify my identity online. It's so frustrating because the phone agent specifically told me "you're all set, don't worry about any other notices you might receive." But seeing that online notification made me second-guess everything. Based on what everyone's saying here, it sounds like I should just wait it out and not stress about the online notification. Has anyone actually done the online verification AFTER already completing phone verification? Did it cause any delays or complications with your refund? Really appreciate everyone sharing their experiences - makes me feel less crazy for being confused by this whole process!