I'm in a very similar situation and have been lurking on tax forums trying to figure this out! My husband and I both make around $125k each and we have two kids. We've been getting crushed with tax bills for three years straight despite trying to adjust our W4s multiple times. After reading through all these responses, I think I finally understand what we've been doing wrong. We've been claiming BOTH kids on BOTH of our W4s (so $4,000 total instead of just $4,000 once), and we never calculated the additional withholding for Step 4c because those worksheets looked so intimidating. I'm planning to fix our W4s this week - I'll claim both kids on my form only, and we'll use the multiple jobs worksheet to figure out how much extra to withhold. With our income levels, it sounds like we might need to add $700+ per pay period in additional withholding, which is going to hurt our monthly budget but is definitely better than owing $12,000+ every April! Has anyone else made the mistake of claiming their kids on both spouses' W4s? I'm curious how much of a difference fixing just that one error made to your tax situation.

I just went through this exact same situation last year and can definitely relate to the sticker shock at tax time! With both of you making around $120k, you're dealing with what's commonly called the "marriage penalty" where two high-income earners end up in higher tax brackets than the standard W4 withholding accounts for. Here's what I learned after owing a huge amount and having to fix our W4s: **Your Step 2 approach was correct** - both of you checking box C is the right move. **Step 3 is where you went wrong** - you should only claim the $2,000 child credit on ONE W4, not both. This alone probably cost you around $2,000 in under-withholding. **For Step 4c** - yes, you absolutely need to use those tables. The $575 per paycheck calculation sounds right for your income levels. You can split this between both W4s ($287.50 each) or put it all on one person's form - doesn't matter which approach you choose. One thing that really helped me was setting a calendar reminder to check our withholding mid-year using the IRS calculator. That way if we're still trending toward owing, we can adjust before it's too late. The reduced take-home pay from the extra withholding definitely stings at first, but it's so much better than getting hit with a massive tax bill and potential penalties. Good luck getting this sorted out!

I totally understand that overwhelming feeling! I went through something very similar after my own "trading genius" phase earlier this year. The good news is that you have all the data you need in that CSV file - it's just a matter of organizing it properly. Based on my experience, I'd strongly recommend against trying to do this manually in Excel. Wash sale calculations are incredibly complex when you have high trading volume, and it's really easy to make costly mistakes. I tried the manual route initially and quickly realized I was in over my head. What worked for me was using TaxAct Deluxe ($25) to import my Robinhood CSV directly. It automatically handled all the wash sale calculations and matched my trades properly. When my 1099 came from Robinhood later, the numbers matched perfectly with what TaxAct had calculated. A few key things to keep in mind: - Most of your gains from that May/June/July trading will likely be short-term (taxed as regular income) - If you're still holding any positions that are underwater, consider tax-loss harvesting before December 31st to offset your gains - Download a fresh CSV from Robinhood right before you start in case there have been any corrections The anxiety about this is definitely worse than actually doing the work. Once you pick your approach and start working through it, you'll feel so much relief. And you'll definitely be more organized going forward - we all learn this lesson the hard way!

I'm going through this exact same nightmare right now! Just downloaded my CSV from Robinhood after my own "brilliant" day trading experiment over the summer and felt that same panic when I saw hundreds of transactions that I have zero organized records for. Reading through everyone's experiences here has been incredibly helpful and reassuring - it's clear this is a much more common situation than I thought. Based on all the feedback, I'm definitely convinced that trying to handle this manually would be a disaster, especially with wash sale calculations. I'm planning to go with TaxAct Deluxe based on the recommendations here. The $25 price point is so much more reasonable than TurboTax Premier, and multiple people have confirmed it handles wash sales accurately and matches the 1099s perfectly. That gives me confidence it's the right approach. The tax-loss harvesting advice is something I really need to act on before December 31st. I'm still holding several positions that are down significantly from my trading spree, so strategically selling some of those losses could help offset my gains and reduce the tax hit. Thanks to everyone for sharing their experiences and making this feel manageable instead of completely hopeless. It's oddly comforting to know so many other people learned this record-keeping lesson the hard way! Definitely going to be much more organized with tracking trades going forward.

Does using TurboTax make handling crypto taxes easier? I've got some Ethereum I bought last year but I also did a small amount of trading between different coins. Not sure if I should use TurboTax or maybe try a more specialized crypto tax software?

Great breakdown, Jamal! This is super helpful timing since I'm about to start my 2024 taxes. I've been sitting on some Bitcoin and Dogecoin I bought last spring and had no idea how to handle that cryptocurrency question. One thing I'd add for anyone reading - make sure you keep good records of your purchase dates and amounts even if you're just buying and holding. I learned this the hard way when I couldn't find my Coinbase statements from early 2024. Even though I didn't have reportable transactions this year, having that documentation will be crucial if/when I do decide to sell in the future for calculating capital gains. Also, does anyone know if the rules are the same for crypto you receive as gifts? My brother sent me some Bitcoin for my birthday but I didn't do anything with it.

One thing nobody mentioned yet - if you have kids, be super careful about who claims them when filing separately. My ex and I filed separately last year while still married and we messed this up. Only one of you can claim each dependent, and there are rules about who gets to claim them. Also, filing separately means you lose some big tax benefits like education credits, child care credits, and earned income credit. Make sure you run the numbers both ways before deciding!

Great question! I went through this exact situation two years ago when my spouse and I decided to file separately. Here are the key things I learned: For mortgage interest, you can split it based on actual ownership and payment responsibility. If you're both on the mortgage and deed, you can divide it proportionally to what each person actually paid - so yes, a 70/30 split is totally allowed if that reflects your actual contributions. Just make sure you keep good records showing who paid what in case the IRS asks. State income taxes work similarly - each spouse deducts what they individually paid. If you made estimated payments from separate accounts, each person claims their own payments. If payments came from joint accounts, you'll need to figure out what portion was for each person's tax liability. One important thing to remember: if one spouse itemizes deductions (which you'd need to do to claim mortgage interest), the other spouse MUST also itemize, even if the standard deduction would be better for them. This "all or nothing" rule for married filing separately can sometimes make it less beneficial overall. I'd recommend running the numbers both ways (joint vs separate) using tax software to see which actually saves you more money after considering all the limitations that come with filing separately.

This is such a valuable discussion! I've been researching similar structures for my own business ventures and this thread has answered questions I didn't even know I should be asking. One thing I'd add from my research is the importance of considering your state's charging order protection laws. Some states provide stronger protection for LLC assets than others when it comes to personal creditors trying to reach business assets. This can be particularly relevant when you have multiple LLCs with common ownership. Also, for anyone considering this structure, don't forget about the potential impact on your business insurance. You'll likely need separate policies for each LLC, and you should make sure your liability coverage properly reflects the interconnected nature of your businesses. Some insurers offer umbrella policies that can cover related entities, which might be more cost-effective than completely separate coverage. The documentation requirements everyone has mentioned are absolutely critical. I've been keeping a "structure compliance checklist" that includes things like: separate board resolutions (even as a single member), documented fair market value analyses, proper invoicing between entities, and annual reviews of rental rates. It sounds like overkill, but if you ever face an audit or liability claim, having that paper trail could be the difference between success and disaster. Thanks to everyone who shared their real-world experiences - this is exactly the kind of practical insight that's hard to find elsewhere!

This thread has been incredibly insightful! As someone who's been considering a similar multi-LLC structure for my upcoming business ventures, I wanted to add a perspective on the IRS audit risk that several people have touched on. From what I've researched, the key factor that seems to trigger IRS scrutiny isn't the existence of related-party transactions themselves, but rather transactions that don't reflect economic reality. The IRS is primarily looking for situations where taxpayers are manipulating income or deductions through artificial arrangements. What gives me confidence about this structure is that it creates genuine economic separation and serves legitimate business purposes beyond tax planning. The liability protection alone justifies the complexity, and the fact that both entities are conducting real business activities with real expenses makes the arrangement substantive. I'm particularly interested in the Series LLC option that @Yuki Tanaka mentioned. For someone just starting out like myself, the reduced administrative burden could make this more feasible while still achieving similar liability protection goals. Has anyone here actually implemented a Series LLC for this type of arrangement? I'd love to hear about real-world experiences with that structure. The documentation requirements everyone has outlined are extensive but seem very manageable if you build good habits from day one. Better to be overprepared than face issues down the road. Thanks to everyone who shared their practical experiences - this discussion has been more valuable than any article I've read on the topic!