OP literally said they started the job in May. Reading comprehension ftw. That's obviously why the W2 shows less than the full salary amount.

You're right, I completely missed that part about starting in May. That perfectly explains the difference between the 62k salary and 55k on the W2 - it's just the prorated amount for the partial year worked.

That's actually a really good point I hadn't considered. I'll reach out to our HR department to verify they're using the current W4 calculation method. They're a fairly small company so it's possible they're using outdated processes. That could definitely explain the discrepancy. I'm realizing from all these comments that I probably did get the child tax credit benefit, just in my paychecks rather than as a lump sum at tax time. I think I need to decide whether I want more money throughout the year or a bigger refund, then adjust my W4 accordingly.

I had this exact issue with my company last year! They were using outdated software that wasn't correctly applying the Child Tax Credit on the new W4 form. Took them 3 months to fix it but they eventually had to give me back pay.

What exactly should I be writing down? Just the total amount or do I need to break it down by credit card vs cash tips?

Ideally you should record both your cash and credit card tips separately for each shift. Credit card tips are already tracked by the restaurant's system, but having your own record helps you verify everything's correct. For cash, just the total amount per shift is fine - you don't need to track each individual transaction. Also record the date, which shift you worked (lunch/dinner), and your total sales if possible. This helps establish the reasonableness of your reported tips if there's ever a question. Many servers use tip tracking apps now that make this super simple - just a quick entry at the end of each shift.

This is so true. I'm in New York and the state department of taxation came after me even though I'd settled things with the IRS. They have their own penalty structures too.

Thanks! Do you know if they have a "review" feature that checks for potential mistakes or missed deductions before filing? That's one thing I did like about TurboTax.

Yes, they absolutely have a review feature! It runs through everything before you file and flags potential issues or missed opportunities. It's actually pretty thorough - last year it caught that I hadn't entered a 1099-INT from a small savings account I had forgotten about. They also have a "maximize refund" pledge similar to other tax services, so they're incentivized to help you find all eligible deductions and credits.

Can confirm this limitation. I tried using it when I moved mid-year between states and it was confusing. Ended up using a different service for that year, but went back to FreeTaxUSA the next year when my situation was simpler.

That's really helpful advice about spreading out the withdrawals. Do you think there's any advantage to starting withdrawals now versus waiting closer to the 10-year deadline? I'm wondering if we should just let it grow for a while since our income is pretty high right now.

It really depends on your current income situation and future expectations. If your income is particularly high right now, it might make sense to delay distributions until a later year when you might be in a lower tax bracket. However, if you expect your income to increase in coming years or if the account might grow substantially, earlier withdrawals could make sense. There's also the benefit of tax-loss harvesting opportunities in down markets. I'd recommend running some projections with different withdrawal scenarios to see what makes the most sense for your specific situation.

Is there any situation where growth in an inherited traditional IRA would actually be tax-free? Maybe the advisor was confusing it with something else?

That makes so much more sense! I was worried my entire income would get hit with the higher rate. What about the freelance income though? Is that taxed differently than my regular job income?

Your freelance income is subject to both income tax (at the same progressive rates as your W-2 income) AND self-employment tax, which is an additional 15.3% to cover Social Security and Medicare. This is because when you're self-employed, you're paying both the employer and employee portions of these taxes. You can deduct business expenses from your freelance income though, which helps reduce both taxes. Things like supplies, software subscriptions, and potentially a portion of your home office if it's used exclusively for the freelance work. Just keep good records of everything!

This is correct! I work as a tax preparer and see this mistake ALL THE TIME. The home office deduction is only for self-employed people (Schedule C filers) or certain statutory employees. Regular W-2 employees can't take this deduction anymore after the Tax Cuts and Jobs Act.