Wait the SALT cap applies separately?? So if you file separately each person gets their own $10k cap? That's a huge deal in states like CA or NY! Why isn't this more widely known??

That's good to know! Thankfully we don't have any back taxes or debts, and both have pretty straightforward W-2 income. Really starting to sound like filing jointly is the way to go in our situation. I'm going to run the numbers both ways though just to be sure. Thanks everyone for all the helpful advice! I feel much more confident about our decision now.

You're welcome! Definitely run the numbers both ways - that's really the only way to be sure. Joint filing is usually better for most couples, but the only way to know for your specific situation is to calculate it both ways. Good luck with your taxes! Sounds like you're making an informed decision now.

Does TaxAct force you to enter all those extra details for interest and dividends that the OP was complaining about? I hate when tax software asks for info that isn't actually required on the real forms.

TaxAct does ask for the payer names for interest and dividends, but it doesn't require all the excessive details like addresses and phone numbers. You can just enter the name and amount for each 1099-INT or 1099-DIV. For IRA distributions, you do need to enter each 1099-R separately, but that's actually correct since the distribution codes can be different. It's much less demanding than some of the other software I've tried.

Does your accountant e-file for you? I'm wondering if they have access to better tax software than what's available to regular consumers.

Is there an easy way to figure out the state difference? I'm in New York and now I'm wondering if I've been leaving money on the table for years.

For New York specifically, the differences can be significant because NY has a pretty progressive tax rate structure. The easiest way is to run the calculations both ways using NY's tax tables, which you can find on the NY Department of Taxation website. The key thing to check is whether you and your spouse would fall into different tax brackets individually versus where your combined income lands. Also, NY has some credits that follow federal rules about filing status, so if you'd lose certain credits federally by filing separately, you might lose the corresponding NY credits too. I usually just run a quick calculation both ways in our state's online tax calculator to see the difference. Takes about 15 minutes but has saved us hundreds some years.

The Tax Cuts and Jobs Act significantly reduced the impact of AMT for many taxpayers by increasing the exemption amounts and phase-out thresholds. But it's still something to consider for higher incomes, especially if you have lots of certain types of deductions or exercise stock options. I got caught by this too, but in reverse - filing separately actually triggered AMT for us when jointly didn't. It's definitely worth running the numbers both ways if you're near those thresholds.

Can you explain more about the QBI deduction? I thought that was only for certain types of businesses. Does it apply to all self-employed people regardless of what service they provide?

The QBI deduction applies to most self-employed individuals, sole proprietors, partnerships, and S corporations. There are some limitations if you're in certain "specified service trades or businesses" like health, law, accounting, etc., and if your income is above certain thresholds (around $170,500 for single filers in 2022). For most freelancers making under that threshold, including graphic designers, you'll likely qualify for the full 20% deduction on your business profits. The calculation gets more complex at higher income levels or for certain professions, but tax software usually handles this automatically. It's basically free money that reduces your taxable income (though it doesn't reduce self-employment tax), so definitely don't miss out on it!

I've used QuickBooks Self-Employed for 2 years and it's pretty good for the basics. The mileage tracker works well if you remember to use it. The quarterly tax estimator is helpful but sometimes feels a bit off. The expense categorization is decent but you still need to review everything.

But I already sent the money to the family directly. Is there any way to reclassify it now? And does this educational expense exception work for schools in other countries too? The college is in Malaysia.

Unfortunately, you can't reclassify it after the fact. The money has to be paid directly to the qualified educational institution at the time of payment to qualify for the educational expense exception. For foreign educational institutions, they generally do qualify for this exception as long as they're a legitimate educational organization. The school doesn't have to be in the US for the direct tuition payment exception to apply. But again, the key is that the payment must go straight from you to the school - not through the family first. Keep this in mind for any future assistance you might provide.

Which tax software do you recommend for keeping track of charitable donations throughout the year? I always scramble at tax time trying to find all my receipts.