Is it too late to do anything about it for this year's taxes? Or am I just stuck with the lower refund?

For this year's taxes, you're unfortunately stuck with the current situation. The withholding already happened in 2024, and you can't retroactively change it. However, you can absolutely prevent this from happening again. Fill out a new W-4 for both jobs right away, making sure to check the multiple jobs box or complete the multiple jobs worksheet. This will ensure the proper amount is withheld going forward and you won't have another surprise next tax season.

FreeTaxUSA is way better at explaining these things. It has a detailed summary page that breaks down exactly how each form affects your overall tax situation. And it's way cheaper than TurboTax for basically the same service.

Wait so you can just leave the money in there and let it grow even after you've already paid for the medical expenses? Wouldn't the IRS get suspicious if you suddenly reimburse yourself for expenses from like 5 years ago?

Yes, that's one of the best features of HSAs! There's no deadline for reimbursing yourself. You could pay for qualified medical expenses out-of-pocket today, keep careful records, and then reimburse yourself from your HSA 10 years from now if you wanted. The IRS doesn't get suspicious as long as you have proper documentation. Just make sure you keep your receipts and records showing the expense was HSA-eligible and occurred after your HSA was established. Some people intentionally do this as a strategy to let their HSA investments grow tax-free for longer. Just remember that you can't claim those same medical expenses as itemized deductions if you plan to reimburse yourself with HSA funds later.

Thanks for mentioning that! I had no idea mileage to medical appointments could count as an HSA eligible expense. Do you know if I need any special documentation for claiming mileage? And what about parking fees at medical facilities?

Thanks for this suggestion! Child services wasn't involved in our case, but I hadn't thought about the school records angle. My son's elementary school does have me listed as the father and emergency contact. Would regular school reports with both our names and the home address work? Or do I need something more official from the administration?

Regular school reports with both your names and the home address can definitely work as part of your documentation package. But if possible, I'd recommend getting something more official from the school administration - like an enrollment verification letter that specifically states you're the parent/guardian and confirms the address. Most school offices can provide a letter like this if you explain it's for tax purposes. Ask them to include the full school year dates to show the child lived with you for more than half the year. School attendance records can also be helpful because they show consistent attendance from your address.

This is great advice! I worked at H&R Block for years and Form 8836 affidavits saved many clients with complicated documentation situations. Just make sure whoever fills it out knows they might get contacted by the IRS to verify the information. Also, make copies of EVERYTHING before sending it in!

Whoa I had no idea about the "recapture" thing! What exactly does that mean? Would we have to pay back all the tax savings from the depreciation when we sell the house?

You don't exactly "pay back" the tax savings, but the amount you depreciated gets taxed when you sell. For example, if you depreciated $20,000 of your home office over the years, that $20,000 would be subject to depreciation recapture tax (typically at 25%) when you sell, even if the rest of your home sale qualifies for the capital gains exclusion. So you'd pay around $5,000 in recapture tax on that $20,000 of depreciation. The benefit is that you got tax deductions spread over many years, which usually outweighs this future tax. This is why proper record-keeping is crucial - you need to track all the depreciation you claim to calculate this correctly when you eventually sell.

In TurboTax, you enter it through the business income section under Schedule C. When you get to the expenses part, there's a specific section for "Business use of home." It'll ask for the total square footage of your home and the square footage used exclusively for business. Then it will walk you through either the simplified method (standard $5 per sq ft up to 300 sq ft) or the regular method where you enter actual expenses including depreciation.

That makes sense and lines up with my suspicions. Do you know if there's any way to find out how much of my donation would actually reach charities vs being kept as fees? They weren't super transparent about this in their materials.

You can try checking their Form 990 (the tax form non-profits file) if they've published it - that would show financial information for the 501(c)(3) side of things. You can search for these on sites like Guidestar or Charity Navigator. Look for information about their overhead ratio or program expenses versus administrative costs. For the for-profit entity, they likely aren't required to disclose their fee structure publicly unless it's in their terms and conditions or marketing materials. I'd recommend directly asking them what percentage of donations they keep as fees before passing money to the charity. If they're evasive about answering, that's a huge red flag. Legitimate charitable intermediaries are typically very transparent about their fee structures.

I've used fiscal sponsors before for community projects! But yeah, in those cases, the check is written directly TO the 501(c)(3) fiscal sponsor, even though they're helping administer funds for non-501(c)(3) projects. Totally different from what OP is describing where money first goes to a for-profit.