Quick question about timing for the Dependent Care FSA - do you have to use it within the calendar year or can you roll it over? I'm trying to decide if I should max it out during open enrollment but worried about losing the money if we don't use it all.

Great question about the FSA timing! To add to what LongPeri mentioned, most Dependent Care FSA plans do follow the "use it or lose it" rule, but there are a few important nuances to consider: 1. **Grace Period**: Some employers offer a 2.5 month grace period (through March 15th of the following year) to use remaining funds. Check with your HR department about this. 2. **Runout Period**: Even without a grace period, you typically have 90 days after the plan year ends to submit claims for expenses incurred during the plan year. So if you paid for December daycare in January, you can still get reimbursed. 3. **Conservative Approach**: Since you're spending $2,200/month ($26,400/year), you're well above the $5,000 FSA limit, so you shouldn't have trouble using the full amount. But if you're worried, you could start with a lower contribution this year and increase it next year once you're comfortable with the process. The tax savings from the pre-tax contribution usually make it worth maxing out, especially at your spending level. Just keep good records and submit reimbursements promptly!

I've been dealing with a similar situation for about 3 years now, and what finally saved me was setting up automatic ACH payments directly through my city's online portal. Most people don't realize that many cities now offer this option - you can schedule recurring payments that automatically deduct from your checking account. I calculate my annual liability at the beginning of the year (1.5% of expected income), divide by 12, and have that amount automatically withdrawn monthly. It's like having your own withholding system. The monthly approach works better for me than quarterly because smaller amounts are less noticeable in my budget. One tip that really helped: I set the monthly amount slightly higher than needed (maybe $5-10 extra per month) so I end up with a small refund rather than owing more. That extra cushion gives me peace of mind, especially if I get unexpected income during the year. Check your city's website under "Online Services" or "Tax Payments" - the automatic payment setup is usually buried in there but it's a game changer once you find it.

I've been lurking on this thread because I'm dealing with almost the exact same situation - living in one city with local tax requirements but working somewhere else. What really struck me from reading all these responses is how many different approaches there are to solve this problem. For anyone still reading through all these options and feeling overwhelmed (like I was), here's what I'm taking away as the key decision points: 1. Do you want to handle it yourself or use a service? The manual approaches (quarterly payments, automatic bank transfers, separate savings account) are definitely doable but require discipline. Services like taxr.ai seem helpful if you're willing to pay for automation and convenience. 2. Monthly vs quarterly payments - I hadn't considered monthly payments before reading Miguel's response, but breaking it down into 12 smaller chunks instead of 4 larger ones makes a lot of psychological sense for budgeting. 3. Where to get help when needed - The Claimyr service sounds useful for actually reaching someone at your city tax office without the endless hold times. I think I'm going to start with Sofia Morales' approach (separate savings account + monthly transfers) since it's simple and free, then explore the automatic ACH setup Miguel mentioned if my city offers it. If I run into roadblocks getting information from my city, I'll try that call service. Thanks everyone for sharing your experiences - this thread has been incredibly helpful for understanding all the options available!

I'm confused about how to determine "providing more than half of support" for my college kid. She has a scholarship covering tuition, works part time for spending money (made about $8200 last year), but I pay for her apartment, car insurance, health insurance, and send money for groceries. How do I figure out if I hit the "more than half" threshold to claim the Credit for Other Dependents?

Just wanted to share my experience as someone who went through this exact situation last year! My daughter turned 18 in October and was a college freshman. Like you, we paid for everything - tuition, dorm, meal plan, books, etc. She made about $4,200 from a summer job. Here's what I learned: Yes, you can absolutely still claim her as a dependent! Since she's a full-time student under 24 and you provide more than half her support, she qualifies under the "qualifying child" rules. The key thing is that dorm time counts as living with you for the residency test. You're right about the Credit for Other Dependents - that's exactly what replaces the Child Tax Credit once they turn 18. It's worth $500 instead of the $2,000 you used to get, but don't stop there! Since you paid her college expenses, you should also look into the American Opportunity Tax Credit, which can be worth up to $2,500 per student for the first four years of college. That's actually MORE valuable than what you were getting with the Child Tax Credit. Make sure you get her 1098-T form from the college and keep receipts for books and required supplies. You can claim both credits for the same child - they serve different purposes and don't conflict with each other.

Just wanted to add my experience for anyone else in this situation - I've been paying my 16-year-old daughter to help with my freelance writing business for about two years now. She does research, basic editing, and manages my social media accounts. One thing I learned the hard way is to be really specific about what constitutes "work" versus just normal family responsibilities. The IRS expects the work to be legitimate business tasks that you would otherwise pay someone else to do. My daughter tracks her time using a simple phone app, and I require her to write a brief description of what she accomplished each day. Also, don't forget about state requirements - some states have additional rules about employing minors, even your own children. In my state, I had to get a work permit for her once she turned 16, even though it's my own business. The tax savings have been significant though. Not only do I get to deduct her wages as a business expense, but it's also helped teach her about work ethic and managing money. She's been saving most of her earnings for college, which works out great for the whole family. Keep those records organized and make sure the work is genuinely necessary for your business - that's the key to making this strategy work long-term.

Great question! I went through this exact situation with my consulting business last year. Here are the key points that helped me get it right: Since you're a sole proprietor, you're in luck - no FICA taxes (Social Security/Medicare) need to be withheld for your daughter since she's under 18. You also don't need to issue a 1099 or W-2. The most important things to focus on: 1. **Documentation is everything** - Keep detailed records of hours worked, tasks completed, and pay rates. I use a simple timesheet that my kid fills out and I review weekly. 2. **Pay reasonable wages** - Make sure what you're paying aligns with what you'd pay someone else for similar work. Don't pay $30/hour for basic filing if that work typically pays $12/hour. 3. **Treat it like a real job** - Regular payments from your business account to her account, not just cash here and there. The IRS likes to see consistent, business-like transactions. 4. **Record as wages on Schedule C** - This goes under "wages" (line 26), not contract labor. For the college savings question - pay your daughter first, then she can decide to put money in savings. Don't bypass her and go straight to the 529, as that could look like you're making the contribution rather than paying legitimate wages. The tax benefits are real, but the documentation needs to be rock-solid. Keep photos of her actually working if possible - it really helps if you're ever audited!

Hey Kaitlyn! I went through almost this exact situation about 18 months ago - invested around $4,500, watched it drop to about $2,800, and had mounting credit card debt at brutal interest rates. Here's what I learned: You're absolutely right that you won't owe any capital gains taxes since you're selling at a loss. In fact, you'll be able to deduct that $1,400 loss against your regular income on your tax return, which could reduce your tax bill by several hundred dollars depending on your tax bracket. The real question is whether to sell or hold, and honestly, the math is pretty clear. If your credit cards are charging 20%+ interest (which most do), that's a guaranteed cost that's extremely hard to beat with investment returns. Even if the market bounced back 15% next year, you'd still be losing money overall due to the credit card interest eating away at your finances every month. I ended up liquidating my positions to pay off my cards, and it was one of the best financial decisions I've made. The peace of mind from being debt-free was incredible, and I was able to start rebuilding my investment portfolio from a much stronger financial foundation. Plus, that tax deduction from the losses helped reduce my tax bill by about $320. My advice: cash out, crush that credit card debt, and start fresh. The market will always be there when you're ready to invest again, but this time you'll be doing it without the anchor of high-interest debt dragging you down.

Just wanted to add one more perspective as someone who works in financial planning. The decision you're facing is actually a really common one, and you're asking all the right questions. From a pure tax standpoint, you're in great shape. That $1,400 loss will directly reduce your taxable income, potentially saving you $300-500+ depending on your tax bracket. Robinhood will handle all the reporting with their 1099-B form, and you'll just transfer those numbers to Schedule D on your tax return. But here's something I tell all my clients in similar situations: think of paying off high-interest debt as a guaranteed investment return. If your credit cards are charging 20% APR, paying them off is like earning a guaranteed 20% return on your money - and that's after-tax money! Even the best investors struggle to consistently beat 20% returns. The emotional/psychological component is huge too. I've seen clients hold onto losing investments out of pride or hope, all while paying crushing interest on credit cards. Meanwhile, the stress of debt often leads to poor financial decisions down the road. My recommendation would be to liquidate, eliminate the debt, build a small emergency fund with any remaining money, and then start investing again from a position of strength. You'll sleep better, have more disposable income each month, and can make investment decisions based on opportunity rather than desperation.