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Just a heads-up about the Tesla rewards situation - I had something similar happen with credit card rewards that were technically in my name but used by a family member. The IRS generally views rewards as rebates rather than taxable income unless they're earned without spending (like referral bonuses). If these are driving credits/supercharging rewards tied to actual Tesla usage, you might have an argument they're not taxable income but rather rebates on expenses. However, if they're referral bonuses or something similar where Tesla is required to issue a 1099-MISC, that's different. Also, consider that if your brother reimburses you for the tax impact, it's essentially neutral to you financially. You'd report the income but be made whole by your brother.
Has anyone used TurboTax to help figure out AGI reduction strategies? I'm finding their tool pretty limited when it comes to last-minute AGI reduction techniques and wondering if there's better software out there.
I've found TaxAct to be better than TurboTax for these kinds of situations. They have a better "what-if" analyzer that lets you test different scenarios to see how they impact your AGI. But honestly, for complex situations like trying to retroactively reduce AGI with specific targets in mind, software alone isn't enough - you really need a tax pro who understands all the available options.
When you fill out a new W4, you're essentially telling your employer to recalculate your ENTIRE tax situation, not just add the extra withholding amount you specified. It sounds like when you updated your W4 to account for your wife's income, the payroll system is now withholding at the appropriate rate for your combined income. With combined income of $257k, you're in a higher tax bracket than your individual income would suggest. The previous $453 was likely too low for your actual tax liability with both incomes. The new amount might seem high, but it's probably more accurate for your actual tax situation. Check Box 2 on your W4 - if you checked "Married filing jointly" but didn't complete the two-earners worksheet or use the IRS withholding calculator, your withholding might be off.
Is there any way to just add a specific extra amount without recalculating everything? Sometimes I just want to bump up my withholding by a set amount without all this complexity.
Yes, you can use Box 4(c) on the W4 form which is specifically for extra withholding. If you want to add exactly $348 more per pay period without changing your current withholding base calculation, just put $348 in Box 4(c) and leave the rest of the form the same as your previous submission. Make sure you don't fill out Step 2 or check any different filing status boxes if you don't want the system to recalculate your base withholding. The Box 4(c) amount will be added on top of whatever your current calculation method is producing.
Have you checked if your employer is calculating this correctly? My company's payroll system messed up my withholding last year after I submitted a new W4. They accidentally applied the additional withholding amount to EACH paycheck instead of spreading it across the remaining pay periods for the year. For example, if you need to withhold an additional $4,200 for the year and have 10 pay periods left, they should withhold $420 extra per paycheck. But my company's system took the $4,200 from EACH remaining paycheck!
This happened to me too! It was a nightmare to fix because our payroll department kept insisting they were doing it right. Had to get a manager involved.
22 I'm a high school economics teacher and I actually encourage all my students with jobs to file returns even when not required. It teaches them about the tax system early, gets them comfortable with the process, and establishes their working record. For a 17-year-old in WA with less than $10k, the benefit of filing even though it's not required is primarily educational. Let them take ownership of the process (with your guidance). The free tax software options make it super simple - usually just entering the W-2 info and answering a few questions.
17 Would you recommend parents help them file or let them try to figure it out themselves? My son is pretty independent but I'm worried he might make mistakes.
22 I recommend a collaborative approach. Sit with them the first time, explain the concepts, but let them drive the process by entering information and reading through the questions. Most free tax software is very user-friendly and perfect for simple returns. For the first filing experience, I tell parents to treat it like teaching them to drive - be present and ready to provide guidance, but let them have the wheel. Review everything before submission, of course. What's great is that with such a simple return (just one W-2 and no deductions), there's very little room for serious mistakes.
14 Quick question - if a teen files their own return, does that social security number get "used up" for the year so parents can't claim them as dependents? My neighbor told me this and now I'm worried about having my son file.
8 That's completely incorrect information from your neighbor. Your son filing his own tax return has absolutely no impact on your ability to claim him as a dependent on your return. As long as your son meets the tests for being your qualifying child (age, relationship, residency, and support), you can claim him regardless of whether he files his own return. The only limitation would be if he provides more than half of his own support for the year, which is unlikely with $8,700 in earnings if he's living at home with you covering major expenses.
I dealt with this last year. You need to make an adjustment to the basis on Form 8949 to account for the depreciation. The way I did it was: 1. Report the sale on 8949 with the full exclusion 2. On 4797, report ONLY the depreciation recapture amount 3. Make sure the adjusted basis on 8949 is reduced by the depreciation you've taken In TaxSlayer, there's actually a worksheet when you're entering the home sale information where you can indicate that part of the property was used for business. This triggers the software to handle both forms correctly. Make sure you're using the "Sale of Home" interview screens rather than just the general capital gains entry.
Where exactly is this worksheet in TaxSlayer? I've been all through the Sale of Home screens and can't find any option to indicate partial business use that would trigger both forms.
The worksheet isn't immediately obvious. In the Sale of Home section, after you enter the basic information about the sale, look for a link called "Additional Information" or "Special Situations" (the exact wording varies by version). Click that and you'll find a question asking if any part of the home was used for business or rental purposes. When you answer "Yes" to that question, you'll get additional fields to enter the percentage of business use and the dates of business use. This is what tells TaxSlayer to split the reporting between Form 8949 and Form 4797. The software will then calculate the appropriate amounts for each form. Make sure you have the dates correct for when it was converted from personal to rental use, as this affects the basis calculations significantly.
Has anyone actually tried calling the IRS Practitioner Priority Line about this? I got conflicting advice from my colleagues and decided to go straight to the source. It took almost 2 hours to get through, but the agent confirmed Form 8949 should handle the exclusion portion and Form 4797 Part III should report ONLY the unrecaptured section 1250 gain. The tricky part with software is making sure you're not double-reporting the sale. The IRS agent suggested entering the sale on 8949 first, then going back and entering just the depreciation piece on 4797.
The Practitioner Priority Line is great when you can actually get through! It's amazing how different tax software handles this situation differently. Some create a phantom entry on Schedule D that offsets the 4797 entry, others require manual adjustments. Did the IRS agent mention any specific form line references to make sure everything ties together correctly?
Emily Thompson
the real issue is that the tax system is designed to be confusing af so they can get more money from regular ppl. ur friends are probably cheating the system but the system is already cheating us so š¤·āāļø your friends might not get caught cuz the irs is super underfunded and mostly goes after poor people not rich tax cheats. they might be playing the odds but personally id rather do it right and not worry about it tbh
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Sophie Hernandez
ā¢That's absolutely wrong information. The IRS has been massively increasing their enforcement staff and technology. They're specifically targeting incorrect filing status claims because they're easy to detect with automated systems. The "they only audit poor people" thing is outdated - they're now using AI to flag suspicious returns across all income levels.
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Emily Thompson
ā¢maybe ur right but all i know is my cousin has been filing hoh for years with no dependents and hasnt been caught. but yeah i guess the risk isnt worth it for most people. just saying the system is already rigged against regular people. i did hear they got a bunch more funding recently so maybe they will start catching more people. still think its stupid that we have such a complicated system in the first place.
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Daniela Rossi
Here's what's probably happening: Your friends are likely filing correctly but adjusting their W-4 withholding to have more taken out during the year. If you want a bigger refund (though it's financially not smart), you can just have extra withholding by filling out your W-4 to take more out of each paycheck. The goal of taxes shouldn't be a big refund - it should be to break even! A big refund just means you gave the government an interest-free loan all year.
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Grace Patel
ā¢Thanks for this insight! That makes more sense than them all incorrectly filing as HoH. I'll ask them about their W-4 withholding. I've always just chosen the standard withholding, but maybe they're having additional amounts taken out. That would explain the bigger refunds without them actually doing anything wrong!
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