This is actually a common misconception. Married Filing Separately almost always results in a higher tax bill than Married Filing Jointly. MFS has higher tax rates, lower thresholds for higher brackets, disqualifies you from many credits and deductions (like student loan interest, EIC, education credits), and prevents you from taking the standard deduction if your spouse itemizes. The only time MFS makes sense is in very specific situations like income-based student loan repayment, one spouse having huge medical expenses, or liability protection concerns.

The IRS Withholding Estimator is actually pretty good for this exact situation. My spouse and I used it after getting hit with a surprise tax bill our first year married. You enter all your income sources and it tells you exactly what to put on your W-4s. Definitely saved us from another surprise the following year.

Thanks for confirming! I found it confusing at first but once I put in all our info, the recommendations were spot on. We went from owing $3,200 our first year married to getting a small refund the next year after using the estimator to adjust our withholding. Definitely worth the time to fill it out properly.

My job location didn't change, and I don't have health issues that required a move. As for "unforeseen circumstances" - is a new relationship considered unforeseen? It wasn't planned when I bought the house, but I doubt the IRS cares about that.

Unfortunately, a new relationship isn't considered an unforeseen circumstance by IRS standards. Their definition typically includes things like death, divorce that occurs DURING ownership, natural disasters, multiple births from the same pregnancy, or becoming eligible for unemployment. Since none of these apply, focusing on properly calculating your cost basis is your best strategy now. Make sure you include all purchasing costs, capital improvements, and selling costs to minimize the taxable gain. Document everything meticulously - the burden of proof is on you if you're audited.

This is good advice. I live in Colorado and discovered our state treatment of capital gains is different than federal. Saved me about $2,400 on my state return even though I still had to pay the federal capital gains.

No formal purchase requisition, just noted in my accounting software as planned expenses and allocated the funds. Based on what everyone's saying, sounds like I definitely recorded these too early and should move them to 2025. Good catch on the distinction though!

Yeah, that's what I thought. Without formal documentation creating an actual obligation, it's just a planned expense, not an incurred one. For future reference, if you want to legitimately recognize expenses in a particular tax year, you need to create that obligation before year-end. A simple purchase order or signed contract dated before December 31st would have made those valid 2024 expenses even if you didn't pay until 2025. This is a common strategy for businesses wanting to accelerate deductions.

For cash basis, this is all moot - you record when you pay, period. That's the beauty of cash accounting for small businesses. But OP specifically mentioned they're using accrual, which has all these timing rules we're discussing.

That's weird, my 401k is through Vanguard and they literally just had me check a box saying I qualified under the CARES Act. No documentation required at all. I wonder if different companies have different policies?

Yes, each 401k administrator sets their own verification policies. Fidelity was being extra cautious with my company's plan, but Vanguard and others often just require the checkbox as you mentioned. It varies widely by both the administrator and sometimes even by the specific employer's plan. The actual IRS guidelines only require self-certification, but plan administrators can add their own layer of verification if they choose to. Always best to check directly with your specific plan before proceeding.

Wait seriously? I thought the CARES Act provisions were extended! This completely changes things for me. So there's no special COVID-related withdrawal option for 401ks anymore?

That's mostly correct, but there's a small caveat. While the general CARES Act withdrawal deadline was December 30, 2020, some COVID-related relief provisions were extended through other legislation. However, the specific 401k withdrawal provisions with penalty waivers and extended repayment options did indeed expire.

I've checked everything - emails, Coinbase Workforce (their HR portal), spam folders, everything. Nothing there at all. The severance was definitely above the threshold for reporting too - around $18,000 total. I'm going to try contacting their HR department directly, but they haven't been responsive to previous emails.

That's definitely above the reporting threshold, so they should have sent documentation. Sometimes large companies have completely separate departments handling severance payments versus regular payroll, which can cause confusion. I'd suggest sending a formal letter via certified mail requesting the tax documents. Document all your attempts to contact them. When you file, you'll need to report this income regardless. Use your final pay stub or severance agreement to calculate the correct amount, and keep those documents as evidence of your good faith effort to report accurately.

Form 4852 saved me last year! My employer went bankrupt and never sent final W-2s. Just make sure you have some documentation of the payment amounts - bank statements showing deposits work too.