Do you know if there are any major changes to the 2023 version? I heard something about some states changing their credit reduction status but wasn't sure if that would affect the actual form layout.

Based on the draft version, the core form layout is practically identical to 2022. The main differences are in Schedule A where they updated which states have FUTA credit reductions. California has been added to the reduction list this year, and I believe Connecticut's reduction percentage has changed. If you don't have employees in those states, the form will be essentially the same as last year for you.

I switched from QuickBooks to Gusto last year and they're much faster with form updates. Their payroll system automatically calculates your FUTA liability throughout the year and they usually have the new forms implemented within days of IRS releases. Little more expensive but worth it for the peace of mind.

Thank you for pointing this out! I had no idea about the 80% limitation. Does this mean I need to file any special forms for my 2024 taxes next year when I use the NOL? And should I be keeping copies of anything specific from my 2023 return as proof?

Yes, when you apply your NOL to your 2024 taxes next year, you'll need to file Form 1045 Schedule B to show how you're applying the carryforward. It's a good idea to keep a complete copy of your entire 2023 tax return, especially Schedule A of Form 1045 where you calculated the original NOL. Also keep any supporting documentation for the business losses that created the NOL - receipts, invoices, mileage logs, etc. The IRS tends to look more closely at returns with NOLs, so being able to substantiate everything is important. I recommend creating a dedicated "NOL documentation" folder with copies of everything, since you might be carrying this forward for several years.

Good point about state taxes! I've also seen some states limit the amount of NOL you can claim in a single year, regardless of the federal 80% rule. My state (Illinois) has its own NOL worksheet that's completely different from the federal one.

Hadn't even considered the retirement account implications. Do you know if this affects 401k contributions as well? My employer matches up to 6% and I wouldn't want to lose that benefit.

Your 401k contribution limits actually aren't affected by filing status - you can still contribute the full amount ($23,000 for 2025, plus catch-up contributions if you're eligible) and get your employer match regardless of whether you file jointly or separately. The issue is specifically with IRAs, particularly Roth IRAs where the income limits are drastically lower for MFS. If you're currently doing backdoor Roth IRA conversions, which many high-income professionals do, you'll face additional complexities with MFS status due to the pro-rata rule calculations being done separately, but it's still doable with proper planning.

Yeah it depends on if they're in a community property state or not. In non-community property states, you generally split based on who paid. In community property, it's usually 50/50 regardless of who paid. Gets complicated fast.

Do you know which states specifically have these additional credits? I'm in Colorado and doing some bathroom renovations that include low-flow fixtures and other water-saving features.

Colorado actually does have some water conservation incentives, though they vary by county and local water district rather than being statewide. Check with your local water provider as many offer rebates for low-flow toilets and fixtures. For state tax incentives, Arizona, California, and Massachusetts tend to have the most generous additional credits for various home improvements beyond federal offerings. Colorado has stronger incentives for energy improvements like solar and insulation than for water conservation at the state tax level, but the local rebates can be substantial.

A new roof typically isn't tax deductible immediately, but it does increase your home's cost basis (the amount you subtract from the sales price to determine capital gains when you sell). So keep those receipts! However, if your new roof has certain energy-efficient features like qualifying metal or asphalt roofs with pigmented coatings or cooling granules designed to reduce heat gain, you might be eligible for an energy efficiency tax credit. Check if your roofing materials came with a Manufacturer's Certification Statement confirming they meet the requirements.

Does anyone know if TaxAct is better or worse than TurboTax with these kinds of issues? I've used TurboTax for years but their prices keep going up, thinking of switching next year.

I've used both TaxAct and TurboTax over the years, and they each have pros and cons. TaxAct is definitely cheaper than TurboTax, which is why I switched. The interface isn't quite as polished, but it gets the job done and has all the same capabilities for most standard tax situations. Both have similar occasional issues with payment processing and confusing messages. I'd say TaxAct's customer service is a bit slower to respond, but you're saving like $40+ depending on which version you need. If you have a straightforward tax situation, TaxAct is a good value. If you need lots of hand-holding or have a complex situation, TurboTax might be worth the extra money.

100% agree. I work in UX design and this is a perfect example of terrible user communication. Using technical terms like "VPS" without explanation and implying it's an IRS payment when it's actually their service fee is just awful design.