Do you happen to know if I can update my W4 multiple times throughout the year? Like if his income situation changes dramatically?

Absolutely! You can submit a new W4 to your employer anytime your situation changes. I updated mine three times last year as my husband's business income became clearer. Most payroll systems let you update it yourself online now, which makes it really easy. Just keep in mind that changes usually take effect in the next pay period or the one after. This is especially useful when your spouse has variable income - you can adjust as needed throughout the year to stay on track with your withholding.

This is not completely right. Yes, HoH is wrong for a married couple living together, but the W4 filing status doesn't have to match what you use on your tax return. It's just about how much is withheld during the year. Many couples use "Married but withhold at higher rate" on W4 forms but still file jointly on their actual tax returns.

But doesn't head of household require you to be related to the dependent? I thought boyfriend/girlfriend can't claim HOH for their partner's kids?

You don't actually need to be related to the dependent to file as Head of Household. You just need to have a qualifying person living with you (like a dependent child), pay more than half the cost of keeping up the home, and be considered unmarried for tax purposes. As long as the boyfriend can legitimately claim the daughter as a dependent (meets all the IRS tests we've discussed), and he pays more than half of the household expenses, he can file as HOH. This is specifically addressed in IRS Publication 501. The key is that the dependent has to live with him, which seems to be the case here.

This is a really good point! With that income level, the EITC could be substantial. It might be worth running the numbers both ways.

Thank you for bringing this up! I hadn't even thought about the Earned Income Credit. I'll definitely look into how much that could be worth for me at my income level before we decide who claims her. I really appreciate everyone's helpful advice here. It sounds like we have options and just need to figure out which approach saves us the most money overall. It's such a relief to know that him claiming her is even possible if that turns out to be the better choice.

Thank you for breaking down the penalties! That's really helpful. Would you happen to know if the CP2000 notice typically comes with any additional penalties beyond the standard failure-to-pay ones? I'm trying to weigh all the factors.

The CP2000 itself doesn't add extra penalties beyond the standard failure-to-pay penalty and interest. However, once you receive a CP2000, you're on the IRS's radar in a more official way. If they find other issues during this review process, it could potentially trigger a more comprehensive look at your return. Additionally, responding to a CP2000 means accepting their calculation of what you owe, which might not account for any offsetting deductions or credits you could have claimed with an amended return. With a 1040-X, you control the narrative and can present your complete tax situation.

This is a really important point that people miss. When the IRS adjusts your return, they don't know all your circumstances and often assess the maximum possible tax. Did you try to contest their calculation after you got the notice?

Does TurboTax Live let you talk to the same CPA each time or is it random? I tried something similar with H&R Block and got a different person every time which was frustrating since I had to re-explain my situation repeatedly.

It's generally a random CPA each time you initiate a new conversation, which can be frustrating if you have multiple questions spread out over time. However, I found a workaround by saving all my questions for one session and covering everything at once. You can request the same person if you remember their name, but availability isn't guaranteed. If you're looking for consistent advice from the same professional throughout the year, a dedicated CPA would definitely be better. TurboTax Live is more for getting specific questions answered during the tax preparation process rather than ongoing tax planning.

How did you find a good CPA? I've been thinking of switching but not sure how to select someone trustworthy who won't overcharge me.

I found my CPA through referrals from other small business owners in my area. That's usually the best approach because you can hear about real experiences. I asked specifically about their responsiveness throughout the year and whether they're proactive with tax planning, not just filing. A good way to vet potential CPAs is to have an initial consultation (many offer this for free) and ask specific questions about your situation. If they start immediately identifying potential deductions or strategies you haven't thought of, that's a good sign. Also check if they have experience with your specific type of business - a CPA who specializes in real estate might not be ideal for your online business.

Do you have any resources that explain this well? I'm in FL (also no state income tax) working for companies in IL and MA, and they both put their states in Box 6. Not sure if I need to file non-resident returns or not.

The best resource I found was each state's department of revenue website - specifically look for their guidance on "sourcing rules for non-residents" or "telecommuter tax guidelines." For your specific situation in FL working for IL and MA companies, you're likely protected from having to file in those states if you never physically worked there. Massachusetts tried to tax non-resident remote workers during COVID but has since reverted to physical presence rules. Illinois generally follows the physical presence standard too. Keep documentation proving you performed all work in Florida just in case. If the companies incorrectly withhold state taxes, you'll need to file non-resident returns in those states to get refunds.

In TurboTax, after you enter the 1099-NEC information, you should get to a screen about state allocation. Look for an option like "This income was earned in a different state" or something similar. You can override the Box 6 state and allocate the income to your home state. I had to do this last year because my client put their state in Box 6 even though I never worked there. If you can't find the option, try searching "allocate income different state" in TurboTax's help section.