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5 Something important that hasn't been mentioned yet - if you're considering an Offer in Compromise, be aware that there's a 5-year compliance requirement after acceptance. This means you have to file all required tax returns and pay all required taxes for 5 years after your offer is accepted. If you don't, the IRS can revoke the agreement and reinstate the original debt. Also, the OIC process will extend the collection statute of limitations, which is normally 10 years. Make sure you understand all the implications before proceeding.
1 Does the 5-year compliance thing mean I can't have ANY issues with taxes for 5 years? What if I file on time but can't pay everything that year? Would they bring back all my old debt too??
5 The compliance requirement means you need to file all required returns on time and pay any new tax obligations when they're due. If you can't pay a new tax bill in full, you need to work with the IRS immediately on a payment arrangement. If you violate the terms, then yes, the IRS can potentially revoke your OIC and reinstate the original tax debt, minus whatever payments you've made. They don't do this for minor issues, but it's a serious consideration - you're essentially promising to be a model taxpayer for those 5 years.
12 Has anyone tried those "tax relief" companies that advertise on TV? They claim they can settle tax debt for pennies on the dollar, but I've heard mixed things.
19 I used one of those companies and it was a complete waste of money. Paid them $4,000 up front and all they did was put me on an installment plan I could have set up myself for free on the IRS website. They promised they'd get me an OIC but after taking my money they said I "didn't qualify" - something they should have known from the beginning.
12 Wow thanks for the warning! Sounds like these companies are just preying on desperate people. I'll steer clear and either try to handle it myself or find a reputable local tax professional instead.
I ran into this exact same issue with our company's Silverado 3500 lease last year. The key is to understand that you don't actually depreciate leased vehicles - you simply deduct the business percentage of the lease payments as ordinary business expenses. The reason TaxAct is asking about depreciation for the heavier truck is likely because the software is detecting it as a potential Section 179 vehicle based on weight, but isn't properly recognizing that leased vehicles don't qualify for Section 179 deduction or depreciation. For heavy vehicles used for business (over 6,000 lbs GVWR), you may have to calculate what's called an "inclusion amount" which slightly reduces your deduction - it's the IRS's way of adjusting for the benefit of leasing an expensive vehicle. But this is normally a very small amount compared to your lease payments.
Thank you so much for this explanation! So basically I should just bypass the depreciation question in TaxAct somehow? Would selecting "straight line" be the safest if I have to choose something, or should I go back and re-enter it differently to avoid that question entirely? The truck is 100% business use if that matters for the inclusion amount you mentioned.
If TaxAct won't let you proceed without selecting a depreciation method, I'd recommend going back and re-entering the vehicle information but categorize it as a leased vehicle expense rather than an asset to be depreciated. Most tax software has a specific section for business vehicle expenses where you can indicate it's leased rather than owned. If you absolutely have to choose a depreciation method as a workaround, straight-line would be the most conservative choice, but it's not technically correct since you don't depreciate leased assets. The 100% business use is great - it means you can deduct 100% of the lease payments (minus any inclusion amount). The inclusion amount is based on the fair market value of the vehicle and lease term - for a 3-year lease on a heavy vehicle, it's often minimal.
The GMC Sierra 2500 HD actually gets a special tax advantage because it's over 6,000 lbs GVWR. It qualifies as a "heavy SUV" for tax purposes even though it's a truck. But here's the confusing part everyone else missed - for LEASED vehicles, the rules are different than purchased. You don't take depreciation on leased vehicles! Instead, you deduct the lease payments as a business expense (assuming 100% business use). The reason TaxAct is asking about depreciation is because it's probably confused by the weight classification. I'd recommend skipping that screen or calling TaxAct support about how to properly enter a leased heavy vehicle without depreciation options. Btw - one thing to watch for: if the truck has a fair market value over a certain threshold (around $51,000), you may need to calculate an "inclusion amount" that reduces your deduction slightly.
Make sure you also consider the Head of Household filing status in Step 1(c) of your W4! This affects your standard deduction and tax brackets, which impacts your overall withholding throughout the year. With your 15-year-old son, you definitely qualify for Head of Household since he lives with you more than half the year and you provide more than half his support. This filing status gives you a higher standard deduction than filing as Single.
So would I put "Head of Household" on the W4 and then just "1" for my son on Step 3? Does the Head of Household selection automatically adjust things for me?
Yes, you would check "Head of Household" in Step 1(c) and then put "1" for your son in Step 3. The Head of Household selection automatically adjusts your withholding calculations to account for the higher standard deduction and more favorable tax brackets that come with that filing status. This combination (HOH status + claiming your qualifying child) should help ensure your withholding is more accurate. If you want a slightly larger refund, you can add a small additional amount in Step 4(c) - maybe $25-50 per paycheck depending on your comfort level.
Does anyone know if the child tax credit is still $2,000 per child for 2024? I heard it might have changed but I can't find clear information.
Looking at my 2022 Form 8812, I notice there are two parts - one for the "regular" Child Tax Credit and another for the Credit for Other Dependents. Did you check both sections? Sometimes people miss that they might qualify for the $500 Credit for Other Dependents for family members who don't qualify for the full CTC. Also, did you account for any advance CTC payments you might have received in 2021? Those would have reduced your 2022 credit if you didn't pay them back.
I did check both parts, and all of our kids were qualifying children under 17, so we didn't have any "other dependents" to claim. And we didn't receive any advance payments in 2021 that would affect the 2022 return - we actually opted out of those. What's confusing me is that with 4 kids, we should have gotten the full $8,000 ($2,000 Ć 4), but when I look at the actual credit amount on our Form 1040, it's significantly less. I'm wondering if maybe our tax software or preparer made a calculation error on Form 8812.
In that case, I would recommend looking specifically at the calculations on Form 8812, particularly around the refundable portion. For 2022, the refundable portion was limited to 15% of your earned income above $2,500. So if somehow your "earned income" was calculated incorrectly (which is different from AGI), that could limit the refundable portion. Another thing to check is if you had any other non-refundable credits that used up your tax liability, potentially limiting how much of the non-refundable portion of the CTC you could use.
Has anyone used TurboTax to amend a return for this specific issue? I think I might be in the same boat with my 2022 taxes and wondering if their amendment process is straightforward.
I used TurboTax to amend my 2022 return specifically for Form 8812 issues. It was pretty simple - they walk you through which forms need to be changed and calculate everything for you. Just make sure you have a copy of your original return handy because you'll need to enter some of the original information first before making changes.
Sophia Carter
Have you considered asking Job A if they can match the salary of Job B? With your skills as an orthodontist in this market, you might have more leverage than you think. $20k is exactly the kind of gap that's often negotiable, especially if you frame it as "I prefer your retirement benefits but have a competing offer with higher base pay." I was in a similar situation last year (different field but similar choice between retirement plans), and when I asked, my preferred employer ended up splitting the difference and offering me $10k more. Made my decision a lot easier.
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Amaya Watson
ā¢That's a great suggestion I hadn't even thought of. I've been so focused on analyzing the retirement options that I forgot I could just try negotiating! Do you have any specific tips on how to approach that conversation? I don't want to come across as just trying to get more money.
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Sophia Carter
ā¢Frame the conversation as wanting to join their team but needing to make a financially responsible decision. Be specific about what you like about their practice and the 401k plan, then mention you have another offer with a higher base but that you'd prefer to join them if the compensation gap wasn't so wide. If they can't budge on salary, see if there are other benefits they might be flexible on - maybe productivity bonuses, continuing education allowance, or more vacation time. Sometimes practices have more flexibility with these benefits than with base salary.
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Chloe Zhang
Everyone's focusing on the retirement accounts, but don't overlook the everyday tax implications of that extra $20k in salary from Job B. At your income level, that's likely an extra $6-8k in your pocket each year after taxes. With your high savings rate, you could invest that difference in a taxable account. Yeah, you lose some tax advantages, but that's still significant money over two years. Plus, having more in taxable accounts gives you more flexibility for early retirement, since you won't face penalties for accessing that money before 59½. Given your goal to retire in your late 40s or early 50s, having accessible funds is important.
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Brandon Parker
ā¢This is a good point about early retirement accessibility. But remember that Roth contribution portions (not earnings) can be withdrawn penalty-free anytime, which helps with the early retirement ladder strategy. And 401k funds can be accessed penalty-free before 59½ using Rule 72t SEPP distributions. The tax-advantaged growth over decades usually outweighs the flexibility of taxable accounts, especially at OP's high savings rate.
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