Wait, employers can match 529 contributions? I had no idea that was even a thing! Is that common? My HR department never mentioned anything like this when going over benefits. Do you work at a large company or something?

It's definitely not as common as 401k matching, but it's becoming more popular as an employee benefit, especially at larger companies and in industries competing for talent with families. About 11% of employers offer some form of 529 contribution or matching now. Ask your HR department specifically about education benefits - sometimes they don't promote it well or it might be buried in your benefits handbook. Even smaller companies sometimes offer this benefit. Mine started it last year as part of a "family-friendly" initiative. The company contribution is considered taxable income for federal purposes, but the tax credit/deduction on your personal contribution still applies.

Great question about Ugift! In most states, only the account owner (you) can claim the tax benefits for 529 contributions, regardless of who actually contributes the money. That means gifts from family members to your child's 529 through Ugift typically won't qualify for anyone's state tax deduction or credit. However, a few states (like Colorado and Virginia) have special provisions allowing non-account owners to claim deductions for their contributions. Your family members would need to check their own state's rules if they're hoping for tax benefits.

Would it make sense to just track the big purchases and add those to the IRS estimate? Or do you have to choose between using ONLY their estimate or ONLY your actual receipts?

You can actually do both - sort of. You can use the IRS tables for your regular spending AND add in the sales tax from major purchases like vehicles, boats, aircraft, home building materials, etc. The IRS allows these big-ticket items to be added on top of their estimate. But for regular daily spending, you have to choose one approach - either the IRS estimate or your actual receipts. You can't cherry-pick which regular expenses to include. If you're going to use actual receipts for regular spending, you need all of them, not just the ones that favor you.

It depends entirely on your situation. For single filers, the standard deduction is $13,850 for 2023 taxes, so you need more than that in TOTAL itemized deductions (not just sales tax) to make it worthwhile. But if you have a mortgage, high state income taxes, charitable contributions, AND sales tax, it adds up quickly.

Is there a specific form or documentation the IRS sends to confirm they received your extension? I'm planning to file one for the first time and want to make sure I have all the proper documentation.

The IRS doesn't typically send a confirmation specifically for Form 4868 extensions. When you e-file the extension, you'll get a confirmation from whatever system you use (IRS Free File, tax software, etc.) showing it was accepted. This acceptance confirmation is your proof. If you make a payment with your extension, you'll get a separate payment confirmation. Save both of these confirmations - the extension acceptance and the payment receipt. I recommend saving them as PDFs and also printing physical copies. If you mail your extension, definitely send it certified mail with return receipt requested so you have proof of when it was delivered.

Technically, if you're getting a refund, you don't NEED to file an extension. The penalties for late filing only apply if you owe money. However, I still recommend filing the extension for two reasons: 1. If your calculations are wrong and you end up owing even a small amount, you'll be subject to late filing penalties if you didn't file an extension. 2. Some states require you to file a state extension even if you're getting a federal refund, so filing the federal extension covers your bases.

Thanks for the explanation! That makes a lot of sense. I think I'll file the extension just to be safe, even though I'm pretty sure I'm getting a refund. Better not to risk it in case my calculations are off.

Thank you for this detailed explanation! So even though the payment wasn't for actual work performed, but more like a "holding fee" for the delayed start date, it still counts as nonemployee compensation? And I just report it as regular income on my Schedule C?

Yes, exactly. The IRS considers this type of payment to be nonemployee compensation because it's directly related to your business relationship with the company, even if you didn't perform specific services during that time. You'll report it on Schedule C as self-employment income, which means you'll also need to pay self-employment tax (Social Security and Medicare) on it. The entire $6,500 is reportable as gross income, and you may be able to deduct any legitimate business expenses that were related to this income.

This happened to me too! My company's accounting department kept saying they'd send a 1099-MISC but sent the NEC. When I called them they explained they just use "1099-MISC" as a generic term for all 1099 forms out of habit.

An IP PIN will only protect future tax returns, not previous ones that have already been filed. For the situation with your cousin's 2022 return, she needs to report the identity theft attempt immediately using Form 14039 (Identity Theft Affidavit). For protecting previous returns from fraudulent amendments, she should consider getting a Tax Account Transcript regularly to monitor for any unusual activity. The IP PIN is still worth getting to protect all future filings.

How do you get IP PINs for minors? Do they need their own IRS accounts? My kids are 8 and 10.

You request IP PINs for your dependents as part of your own IP PIN application. There's a section where you can add dependents - you'll need their Social Security numbers and dates of birth. They don't need their own IRS accounts since they're minors. I did this for my three kids last year, and it was actually pretty simple. Just make sure to keep track of all the PINs when they arrive, as each person (including each child) gets their own unique 6-digit number.