This is super helpful! I just checked my draft 2024 return and found Schedule C was there even though I'm purely W2. When I dug deeper, turns out I had checked a box about "online selling" because I sold some old furniture on Facebook Marketplace. TurboTax was treating that as self-employment and letting me allocate home office space to that "business." Would this tiny amount of selling stuff online actually qualify for home office?

For casual selling of personal items like furniture on Facebook Marketplace, that's typically not considered self-employment and wouldn't qualify for home office deduction. The IRS generally views that as selling personal items at a loss (since you're selling used items for less than you paid). For a home office deduction to be valid for self-employment, you need regular and exclusive use of the space for business purposes, and the activity needs to have a profit motive with regular, ongoing activity. Occasional selling of personal items doesn't meet those criteria. You should uncheck that box if you're not actually running a business with intent to make profit.

Same thing happened to me! The home office change affected my total itemized deductions which made them less than the standard deduction, so TurboTax switched me to standard. But then that made some of my state deductions invalid. It was a whole domino effect. Ended up owing about $2450 more than my original calculation.

Is this actually true? That would be a huge help for me. I just realized I'm under-withheld for 2023 and was thinking about submitting a new W-4 to increase withholding for the last two months.

Yes, absolutely true! It's one of the less known advantages for W2 employees. The IRS regulations consider withholding to have been paid proportionally throughout the year regardless of when it was actually withheld. So you can absolutely submit a new W-4 now to increase your withholding for the remaining months of 2023, and the IRS will treat it as if you had been paying at that higher rate all year long. This can help you avoid underpayment penalties even if you were under-withheld for most of the year.

Form 1040-ES is for making estimated tax payments, not just for self-employed people. You need it if you expect to owe $1,000 or more when you file your tax return AND your withholding/credits won't cover at least 90% of current year tax (or 100%/110% of prior year). Most W2 employees don't need it because their employer withholds enough from their paychecks. But if you have significant income not subject to withholding (investments, rental income, side gigs), you might need to make estimated payments using 1040-ES.

Good point! I'm in New York and got surprised last year when my state return didn't match the federal deductions. Do you know if there's a good resource that compares state vs federal depreciation rules?

I don't know of one comprehensive resource that covers all states, unfortunately. Each state has its own tax department website that usually outlines the differences between federal and state treatment of depreciation and Section 179. For New York specifically, they've partially decoupled from federal bonus depreciation rules but do follow the federal Section 179 limits with some modifications. Your best bet is to check the NY Department of Taxation and Finance website or consult with a tax professional who specializes in your state. I've found that state-specific tax forums can also be helpful for these kinds of questions.

What's the easiest way to track mileage? Do you use an app or just write it down?

I use MileIQ app and it's been a lifesaver. It automatically tracks all my drives and I just swipe right for business trips and left for personal. At the end of the year, I can export a detailed report for tax purposes. Before that, I tried keeping a paper log but always forgot to update it. The IRS can be really strict about mileage documentation during audits, so having an app that automatically creates timestamped records with starting and ending locations has given me peace of mind. Some other popular options are Everlance and Hurdlr - they all have free versions you can try.

Thanks for this additional info! I definitely will file long before that 3-year deadline hits, but good to know there's an absolute cutoff. Does the same apply for state taxes or does that vary by state?

The 3-year refund claim deadline is for federal taxes. State tax deadlines vary by state - some follow the federal 3-year rule, while others have shorter or occasionally longer timeframes. For example, California and New York generally follow the federal 3-year rule, but some states like Montana only give you 2 years to claim a refund. I'd recommend checking your specific state's tax agency website for their rules since it's not standardized across all states.

True, but with the current disaster at the IRS with processing times, you might not get that refund anytime soon anyway. My brother filed in April and just got his refund last week!

Oh I hadn't thought about being flagged as a first-time filer! That actually makes a lot of sense. 31 days isn't terrible I guess, just longer than that 21 day estimate. What's the best way to adjust withholding? I'd rather have the money throughout the year for sure, but I'm nervous about accidentally owing taxes next year if I mess with my W-4.

The easiest way to adjust your withholding is to fill out a new W-4 form with your employer. The form was redesigned in 2020 to be more straightforward. If you want to be conservative about it, you can start by claiming just a little less withholding and see how it affects your paychecks. The IRS has a Tax Withholding Estimator tool on their website that can help calculate the right amount based on your specific situation. It's better to slightly overwithhold than underwithhold, so you still get a small refund rather than owing money at tax time. Just update your W-4 with your employer's HR department once you figure out the right numbers.

What tax software did you use? I'm wondering if some get processed faster than others.