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The big red flag I see is that your federal deductions dropped from $18,550 to $12,950 while your income went UP significantly. That doesn't make sense unless you lost some major deductions. Did you have mortgage interest, significant charitable contributions, or other itemized deductions last year that you didn't have this year? Also, your federal taxes seem reasonable with the refund, but something is definitely off with the state taxes. Which states did you move from/to? Some states have MUCH higher income tax rates than others.
Not OP but the standard deduction for single filers was $12,950 for 2022. So it looks like they probably itemized last year ($18,550) but took the standard deduction this year which would make sense if they had a mortgage before but maybe not after moving.
Make sure you check if you paid taxes to both states on the same income. When you move mid-year, you become a part-year resident of both states. Some states are really aggressive about claiming as much of your income as possible. Also, if your $9k bonus was taxed at a flat 22% federal withholding rate (which is standard for bonuses), but your actual tax bracket is higher, that could explain part of the underpayment. You may want to fill out a new W-4 with your employer and possibly add an additional withholding amount per paycheck to avoid this happening again next year.
Another option - check if your daycare is registered with your state's licensing agency for childcare providers. Many states have online databases where you can look up licensed daycares, and sometimes they include the EIN or at least a state tax ID you could use temporarily. Also, if you've paid them through any kind of app or payment system (like brightwheel, Venmo for Business, etc.), sometimes the tax info is available there in the payment details or receipts.
That's a really good suggestion about the state licensing database! I just checked my state's childcare portal and found our daycare, but unfortunately it only shows their state license number, not their federal EIN. I pay them by check so no digital payment records either. I think I'm going to try the "Applied For" option that the first commenter suggested, and then follow up with the daycare on Monday to get the correct number. Thanks everyone for all the suggestions!
If none of the other suggestions work, could you maybe ask other parents who use the same daycare? One of them might have the EIN from doing their taxes already. I ended up getting my son's afterschool program's EIN from another mom in our Facebook parents group last year when I was in the same situation.
This! Parent networks are amazing for this stuff. Also, sometimes daycares have their EIN on their website in the FAQs or enrollment sections. Worth checking if they have a site.
Is anyone else annoyed that we even have to jump through these hoops? The tax prep lobby has successfully blocked the IRS from creating their own simple, free filing system for decades. Most developed countries have government-prepared returns that citizens just need to verify. Instead, we deal with this predatory nonsense from private companies.
Absolutely! And don't forget about the "Return Free Filing" system the IRS wanted to implement years ago that would've sent pre-filled returns to most taxpayers for simple situations. Intuit and H&R Block lobbied HARD against it and killed the program. It's ridiculous that our tax system is designed to profit private companies rather than serve citizens.
That's exactly what frustrates me! The IRS already has most of our information from W-2s and 1099s that get sent to them directly. They could easily prepare basic returns for most Americans. I read that Intuit (TurboTax) spent over $3 million per year lobbying to prevent simpler tax filing. They literally profit from making our taxes complicated and confusing. California has a state program called ReadyReturn that works this way, but federal efforts keep getting blocked. It's pure corporate capture of our tax system.
Has anyone tried the IRS Direct File program this year? I heard they expanded it to more states for 2025 filing season. Wondering if it works better than dealing with OLT or TurboTax.
I used it last season and it was surprisingly good! Very basic interface but it gets the job done with no upsells or hidden fees. The downside is it only works for pretty simple tax situations - W-2 income, standard deduction, some basic credits. If you have self-employment income, investments beyond basic interest, or itemize deductions, you can't use it yet.
Another thing to consider is whether you fall under the Self-Support Exception for the Kiddie Tax. I ran into this exact issue with Form 8615 on TurboTax last year. The key is that if your earned income (from your W-2 job) provides more than half of your support, you're exempt from the kiddie tax rules even if you're under 24 and a student. Support includes your housing, food, clothing, education expenses, medical costs, etc. So calculate: does your cafΓ© job income cover more than 50% of all your living expenses for the year? If yes, then you should be able to avoid Form 8615 entirely. Make sure you answer this question correctly when TurboTax asks!
Does financial aid count as support? I have loans in my name that help pay for school and living expenses. Would those count as "my support" or not? The whole support test thing is super confusing.
Student loans in your name generally count as YOUR support (not your parents'), even though you're not repaying them yet. This is because you're the one legally obligated to repay them. Grants and scholarships are trickier. If they're used for qualified education expenses (tuition, books, required fees), they're not considered anyone's support. But if they're used for living expenses (room and board), they generally count as support that you provide for yourself. It is confusing! That's why it's important to calculate all sources of support carefully and determine who provided the majority of your total support for the year.
Has anyone else noticed that TurboTax sometimes asks for forms you don't actually need? Last year it had me fill out some crypto tax form even though I had zero crypto transactions. After talking with a tax professional, I learned you can sometimes override these prompts.
Yes! TurboTax is super annoying with that. I found that sometimes if you go back and review your answers to previous questions, you might find something you answered wrong that's triggering unnecessary forms. Double-check your answers about dependency status and support.
Ashley Simian
Everyone's giving tax advice but missing one important thing - TALK TO YOUR MOM and work out a fair arrangement! When my son was in your situation, we calculated both scenarios, and I claimed him but gave him half the extra money I got. If filing independently gets you $500 more but your mom gets $2000 more by claiming you, the FAMILY comes out ahead by $1500 if she claims you. Maybe suggest splitting that difference so everyone benefits? Money aside, remember your mom housed you after graduation. That's valuable support that saved you thousands in rent!
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Oliver Cheng
β’This is honestly the best advice here. Tax optimization should be a family discussion, not just individual maximization. My parents and I always did our taxes together to figure out what made sense for everyone.
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Taylor To
Dont forget that if your mom claims you it could affect your eligibility for the recovery rebate credit too if you didn't receive all your stimulus payments. thats a big one that gets overlooked π³
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Ella Cofer
β’Recovery rebate credit doesn't apply for 2022 taxes anymore. That was only for 2020 and 2021 tax years when the stimulus payments were issued. There were no stimulus payments for 2022.
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