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Don't forget that if you're close to the threshold between standard and itemized, there's a strategy called "bunching" that might help. Basically, you alternate years - in one year you bunch together as many deductible expenses as possible and itemize, then the next year you take the standard deduction. For example, if you normally donate $3,000/year to charity, you could instead donate $6,000 in 2024, nothing in 2025, $6,000 in 2026, etc. Same total donations over time, but you might save more on taxes by itemizing every other year.
Does this actually work? Seems like it might flag an audit if your deductions fluctuate wildly from year to year. Has anyone actually tried this strategy successfully?
Yes, this absolutely works and is a completely legitimate tax strategy. The IRS doesn't flag you for audit simply because your deduction method changes year to year - millions of taxpayers switch between standard and itemized deductions regularly based on their financial circumstances. Bunching deductions is a recognized tax planning strategy discussed by CPAs and financial advisors. It works particularly well for charitable contributions because you have control over the timing. Many charities are even familiar with this strategy and can help you set up your donations appropriately. Just make sure you keep proper documentation for the years you itemize.
Just double checking - when figuring out if you should itemize, you also need to consider your state taxes, right? Some states automatically give you a standard deduction equal to your federal deduction, but others let you itemize on state even if you take standard on federal. Might be worth checking?
This is an excellent point that gets overlooked! I live in California and we can itemize on our state return even if we take the standard deduction on federal. Saved me about $400 last year by doing standard federally and itemized on state. OP should definitely check their state's rules. It's not always an either/or situation between the two returns.
One thing nobody's mentioned yet - check your pay stub carefully to see if you signed up for any benefits or deductions that might be taking money out. At my summer camp job, they automatically enrolled us in an employee meal plan that took like $50 out of each check unless you specifically opted out. Took me three paychecks to figure that out! Also some places do uniform deductions, parking fees, or even savings plans. Not saying that's what happened to you, but it's worth checking all the line items on your stub.
I haven't seen my actual pay stub, just the direct deposit amount. How do I get a copy of the detailed stub?
Most companies either provide a paper pay stub with your check (if you get a physical check), or they have an online portal where you can view and download your pay information. Ask your manager or HR person how to access your pay stubs - they're required by law to provide this information to you. Some companies use payroll services like ADP, Paycom, or Gusto where you'd need to create an account to see your info. If they haven't told you about this, definitely ask! The stub will break down exactly where every dollar is going.
Make sure to double check your withholding allowances on your W-4 too! When I started my first job, I accidentally put "0" allowances which meant they withheld the maximum. Your best bet is to fill out a new W-4 and give it to your employer. Since your total income will be under the standard deduction, you can probably claim exemption from withholding for the rest of the summer.
Has anyone had issues with the IRS withholding calculator when you have multiple jobs throughout the year? I started a new job in March, and I'm not sure how to account for the W-2 income from my previous employer in the calculator.
When I was in that situation, I entered the income and withholding from my previous job in the "already withheld" section. There should be fields for income already earned and tax already withheld this year. Then for your current job, you enter the expected income for the remainder of the year.
I found that the IRS withholding calculator isn't great at handling irregular income. My spouse's income varies a lot month to month (sales commissions) and we have rental income too. We ended up just estimating our total annual income, adding about 10% as a buffer, and then calculating what our quarterly estimated tax payments should be to cover the difference that regular withholding won't catch.
Have you tried using tax software to do a mid-year projection instead? I use TurboTax and just input our estimated full-year numbers around June to see if we're on track. It seems more accurate than the IRS calculator for complex situations.
This might seem obvious but have you checked the mail carefully? My employer sent my W2 in an envelope that looked like junk mail and I almost threw it away. Some employers also use third-party payroll services like ADP or Paychex, and those might come separately from company correspondence. Also check if they offer electronic W2s through a payroll portal. Sometimes companies don't clearly communicate that they've gone paperless with tax forms.
I've checked all my mail thoroughly and asked about electronic options too. They definitely haven't sent it either way. From what I've gathered talking to ex-coworkers, they're behind on their payroll administration for everyone, not just me. Just trying to figure out my options since they're being so difficult about it.
You can also try contacting your state's Department of Labor about the W-2 issue. Many states have laws about this and can put additional pressure on the employer. I had to do this once and the employer suddenly "found" my W-2 real quick when the state labor department called them.
This is good advice! I work in HR and employers definitely don't want the Department of Labor breathing down their necks. Mention the potential for penalties and they'll usually prioritize getting your W-2 out.
Jake Sinclair
If you're comfortable with basic tax concepts, I'd recommend just using your state's fillable PDF forms. I had the same issue last year and found that once I actually looked at the state forms, they weren't nearly as intimidating as I thought. Most of the numbers come straight from your federal return, and there are usually clear instructions. The state website should have free fillable PDFs you can type directly into, then print or e-file.
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Brielle Johnson
ā¢Most state forms require your federal AGI and some calculations from your federal return, right? Do you just copy those numbers over from your federal return? I've always been confused about that part.
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Jake Sinclair
ā¢Exactly right! You'll need your completed federal return in front of you. Most state forms start with your federal AGI (Adjusted Gross Income), then make state-specific adjustments from there. You literally just copy numbers from specific lines on your federal return. The state instructions will tell you exactly which federal form lines to reference. For example, it might say "Enter amount from Federal Form 1040, Line 11." Some states also have "adjustments" that add or subtract certain items that are taxed differently at the state level. But overall, if you have your federal return completed, you've already done the hard part!
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Honorah King
Hang on - have you checked if your state has income tax at all? Not all states do! Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming don't have state income tax, and New Hampshire only taxes investment income. If you're in one of those states, you don't need to file a state return at all!
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Mae Bennett
ā¢Good point, but unfortunately I'm in a state that definitely requires filing. I wish I was in one of those no-income-tax states! Maybe someday I'll move lol.
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Oliver Brown
ā¢Don't forget that some states with no income tax hammer you in other ways like high property taxes or sales tax. Texas property taxes are brutal! No free lunch when it comes to taxes.
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