Don't overthink the W-4! It's just telling your employer how much to withhold, not how you'll actually file. My advice: if both you and your wife work, check the "Married but withhold at higher single rate" box on your W-4s. This prevents underwithholding. For actual tax filing, almost certainly file as "Married Filing Jointly" - it's usually better. For dependents: zero for both of you unless you have children or other qualifying dependents. Being on someone's health insurance doesn't make you their dependent.

As a fellow newcomer to the US tax system, I completely understand your confusion! I went through something similar when I first arrived. One thing that really helped me was understanding that the W-4 is just an estimate for withholding - you're not locked into anything. Since you're both working and newly married, I'd recommend: 1. Both select "Married filing jointly" on your W-4s 2. Make sure to check the "Multiple Jobs or Spouse Works" box in Step 2 on both forms 3. Consider using the IRS withholding calculator at irs.gov to get a more precise estimate For dependents, put 0 unless you have children or other qualifying dependents. Health insurance coverage doesn't make you dependents of each other. The good news is that when you file your actual tax return next year, you can choose the filing status that works best for you (likely married filing jointly), regardless of what you put on your W-4s. The W-4 is just to help get your withholding close to what you'll owe. Don't stress too much - you can always adjust your W-4 later if needed once you see how your first few paychecks look!

has anyone else noticed that the whole tax system is basically designed to be super confusing? like why can't they just tell us what we owe instead of making us figure it out and then punishing us if we get it wrong? it's ridiculous tbh

I went through the exact same situation last year! What really helped me was understanding that a tax refund isn't actually "free money" - it's just getting back your own money that you overpaid throughout the year. Your coworker is essentially giving the government an interest-free loan with every paycheck. Here's what I'd recommend: First, use the IRS Tax Withholding Estimator online to figure out your ideal withholding amount. Second, consider increasing your 401(k) contributions - even bumping from 3% to 6% could significantly reduce your taxable income. Third, make sure you're claiming all eligible deductions like student loan interest if you have it. The goal shouldn't necessarily be getting a big refund - ideally you want to break even or owe just a small amount, which means you kept more of your money in your pocket throughout the year instead of lending it to the IRS for free. Once I adjusted my W-4 and increased my retirement contributions, I went from owing $600 to getting back about $150, which is pretty much the sweet spot.

The community consensus on this issue is that it's almost always one of three things: 1) A math error on your return that the IRS automatically corrected, 2) A verification hold that requires additional documentation, or 3) An income phase-out that affected your eligibility. Compared to the old stimulus payment issues from 2020-2021, today's Child Tax Credit problems are usually resolved much faster. Most members here report resolution within 60 days versus the 6+ months we saw during the pandemic processing backlog.

As someone new to the US tax system, I'd recommend starting with the basics before jumping into complex procedures. First, download your tax transcript from the IRS website (irs.gov/individuals/get-transcript) - this will show exactly what payments the IRS has on record for you. The $1400 you're missing could be related to the Child Tax Credit, not the Recovery Rebate Credit, since those stimulus payments ended in 2021. Check if you have qualifying children and verify your income falls within the phase-out limits. If your transcript shows discrepancies, then you can determine whether you need Form 1040X or if there's a simpler resolution. Don't rush into filing amendments until you understand what the IRS actually processed vs. what you expected!

I'm confused about one thing - does the military exemption just apply to the 2-year ownership rule or does it also extend the capital gains exclusion amount? My friend told me military gets a higher exclusion than $500k but that seems too good to be true??

Just wanted to jump in here as someone who went through this exact scenario! Your buddy is definitely mixing up the old rules - there's no 6-month requirement to buy another house to avoid capital gains tax. Since you owned and lived in your home as your primary residence for over 2 years and you're married filing jointly, you qualify for the full $500,000 capital gains exclusion. Your $125k profit is well under that threshold, so you won't owe any capital gains tax regardless of when (or if) you buy your next home. The military connection actually works in your favor here too. If you hadn't quite hit the 2-year mark due to PCS moves, there are special provisions that could still help you qualify. But since you're already over 2 years, you're in great shape. One thing to keep in mind - while your home sale profit won't be taxed, any interest you earn on that $125k in your high-yield savings account will be taxable as regular income. So just factor that into your planning when you're setting money aside for next year's taxes. You can breathe easy on this one - no surprise tax bill coming your way from the home sale!

Does anyone know if forming the holding company in a different state than where you live would make sense from a tax perspective? I've heard Wyoming and Nevada mentioned a lot for holding companies because they have no state income tax.

I went through a similar situation about 18 months ago with roughly the same income level as you. Here's what I learned that might help: First, don't get too caught up in the complexity right away. With $150K in business income plus rental properties, you're definitely at a level where this could make sense, but the structure needs to match your specific goals. One thing I wish someone had told me earlier: the "tax savings" from holding companies often come more from better expense management and strategic timing rather than just the entity structure itself. For example, being able to reimburse yourself for health insurance, home office expenses, and business travel through the holding company can add up to significant deductions. For your rental properties specifically, having them in separate LLCs under a holding company does create nice liability separation, but make sure you understand the ongoing costs. Each LLC typically needs its own tax return (even if it's a simple one), and depending on your state, there might be annual fees for each entity. My accountant had me run the numbers on three scenarios: staying as sole proprietor, setting up just the business as an S-Corp, and doing the full holding company structure. The holding company only made sense once we factored in my plans to acquire more properties over the next few years. The income flow question you asked is key - with an S-Corp holding company, everything flows through to your personal return, so you're not dealing with corporate-level taxation plus personal taxation. Much cleaner than I initially expected.