16 Does this $0 AGI trick also apply if you didn't file taxes at all the previous year? I wasn't required to file in 2023 but now need to file for 2024.

3 Yes, that's exactly right! If you weren't required to file in 2023 and didn't file, you would use $0 as your prior-year AGI when filing your 2024 return electronically. The $0 AGI entry works in several scenarios: when you filed previous year returns on paper, when you didn't file the previous year at all, or when you recently filed the previous year's return and it hasn't fully processed in the IRS system yet.

9 I switched from Tax Act to FreeTaxUSA this year and found it much more user-friendly, especially with handling prior year AGI issues. They have a specific section that explains what to do if you filed previous years' returns recently.

AVOID THE CHAINS! I worked at one of the big ones for two tax seasons. The training is minimal and they push quantity over quality. Most of the preparers there could handle basic W-2 returns but would be completely lost with brokerage statements or anything remotely complex. For your situation with multiple accounts and a new dependent, you definitely want either an independent EA or CPA. The price difference isn't huge but the expertise gap is massive. The chains often use software that's basically the same as consumer tax software, just with a person inputting the data instead of you.

Thanks for the inside info! That's exactly what I was worried about. I'll start looking for independent pros instead of going to one of the big chains. Been seeing their commercials everywhere so was tempted by the convenience, but sounds like it's worth finding someone with more expertise.

Thanks for bringing this up! They did give me a small severance package (about $3,200). I hadn't even thought about how that would be taxed. I haven't applied for unemployment yet, but I probably will soon. Do they automatically withhold taxes from unemployment or do I need to request that?

Yes, your severance package will be included on your W-2 along with your regular wages. The company will typically withhold taxes from it just like they do from regular paychecks. For unemployment benefits, they don't automatically withhold taxes in most states unless you specifically request it. You can fill out a form (usually Form W-4V) to request voluntary withholding of 10% for federal taxes. If you don't have taxes withheld from unemployment, you might need to make quarterly estimated tax payments to avoid a penalty when filing next year, or you could end up with a larger tax bill than expected. Many people are surprised by this come tax time, so it's good you're thinking about it now!

You're right, there are income thresholds. For 2025, a single person under 65 needs to file if they earn $13,850 or more. But you were smart to file anyway - if you had any taxes withheld from your paychecks, filing is the only way to get that money back!

Moving to a different state doesn't change how you report health insurance on your federal taxes. The requirement for qualifying health coverage is federal, not state-specific. The only potential complication would be if you moved to or from a state that has its own individual mandate (like California, Massachusetts, New Jersey, Rhode Island, or DC). Those states might require additional reporting on your state tax return, but it doesn't affect your federal return. As long as you maintained continuous coverage during your move, you're all set for federal tax purposes.

You don't need to worry! When you file jointly, you're just verifying that everyone in your household had coverage. Your wife doesn't need to report you dropping off her plan. The 1095 forms you each receive will show the coverage periods for each person, and as long as you both had continuous coverage (even if through different plans at different times), you're good to go!

You make a good point about the psychological aspect. I hadn't considered that angle before. But regarding business expenses - couldn't those be handled separately from personal taxation? Like keep business deductions but simplify personal taxes? And for charitable giving, I wonder if people would still donate without the tax incentive...

That's a really interesting question about separating business and personal tax structures. It could work in theory, but then you'd still need a complex system for business taxation. Most economists think there should be symmetry between personal and business tax structures to prevent gaming the system. As for charitable giving, studies have shown that tax incentives do influence donation behavior significantly. While people would still give to causes they care about, the research suggests overall giving would decrease by 25-40% if the deduction was eliminated. This would hit smaller local charities the hardest since they rely more on middle-class donors who are more tax-sensitive.

A well-designed flat tax would still have a basic exemption amount. So maybe the first $25,000 or $30,000 isn't taxed at all, then everything above that is taxed at a single rate like 15% or 20%. That would protect low-income earners while simplifying the rest of the system.