Thanks for the suggestion! I checked and there weren't any irregular payments or bonuses - it was just my standard salary payment. And we're on a consistent bi-weekly schedule. The only change was adding the new dependent on my W-4. I'll definitely keep an eye on my next paycheck though!

Wouldn't checking the box in step 2 withhold at the higher single rate? That might be too much withholding for someone with 2 kids and a stay-at-home spouse. Could create too big a refund, which is just giving the government an interest-free loan.

Thanks for this tip! I just looked up my businesses on my state's portal and they're definitely LLCs. I guess I need to do the BOIR filing after all. Do you know if there's any easy way to complete it without hiring someone? I have 3 properties/LLCs so it seems like it could get expensive fast.

The BOIR filing isn't too complicated if you're a single-member LLC. You'll need to create an account on FinCEN's BOI E-Filing System, and then provide basic information about yourself as the beneficial owner (name, address, ID number) and your company (legal name, address, formation info). Since you're both the company applicant (person who formed the LLC) and the beneficial owner (person who owns/controls it), it's pretty straightforward. If you have all your formation documents handy, you can probably complete all three filings in 1-2 hours. Much cheaper than paying someone hundreds of dollars per LLC!

Do you happen to know what the penalties are if you miss the deadline? I have a bunch of single member LLCs and I'm traveling until mid-January.

The penalties can be pretty severe - civil penalties up to $500 per day for violations, and criminal penalties up to $10,000 and/or imprisonment up to 2 years for willful violations. But I wouldn't stress too much about your mid-January return if you're making a good faith effort to comply. Government agencies rarely begin aggressive enforcement immediately after a new filing requirement. That said, you should probably at least create your FinCEN account before you leave and maybe start gathering the information you'll need.

Do I still qualify for child tax credits if my income was around $80k total (including the contractor work)? I thought there were phaseouts.

Yes, you should still qualify. The Child Tax Credit begins to phase out at $200,000 for single filers and $400,000 for married filing jointly. With your total income around $80k, you're well below those thresholds, so you should be eligible for the full amount for each qualifying child. The Earned Income Credit has lower income limits, so you'd need to check those specifically based on your filing status and number of qualifying children. But the Child Tax Credit should definitely be available to you based on the income information you've shared.

What app do you use for mileage? I've been trying to keep track on a notepad but I always forget.

I use MileIQ and it's been a lifesaver. It automatically tracks all your drives and then you just swipe right for business or left for personal. Super easy and creates IRS-ready reports. Some people also like Everlance or Stride. Another tip: set calendar reminders for quarterly tax payments (April 15, June 15, September 15, and January 15). The IRS doesn't send reminders and it's easy to forget, especially that weird June one that's only two months after April!

No, I actually haven't had that conversation with them yet! That's a really good point. To be honest, I've been avoiding bringing it up because money discussions are always awkward in our family. But you're right - they might not even be planning to claim me regardless of whether I qualify. Is there a significant difference in the tax benefits between them claiming me vs. me filing as independent? I'm wondering if there's an obvious financial advantage one way or the other that could guide the conversation.

There can be significant differences! If you file independently and paid for education expenses, you might qualify for education credits like the American Opportunity Credit (up to $2,500) or the Lifetime Learning Credit. These credits are usually more valuable to a student with lower income than to grandparents who might be in a higher tax bracket. On the other hand, if your grandparents claim you, they might get a dependent tax credit (though this is reduced at certain income levels). The key is figuring out which arrangement saves the most money overall between both tax returns. Sometimes families even split the difference - like if you filing independently saves $2,000 in taxes versus them claiming you, maybe they could give you a portion of that difference since they're losing the dependent benefit.

Wait, are you sure about that? I thought there was definitely an income limit for being claimed as a dependent regardless of whether you're a qualifying child or relative. This is so confusing!

You're confusing two different tests. There IS an income test, but only for Qualifying Relatives, not for Qualifying Children. A student under 24 can be claimed as a Qualifying Child regardless of their income amount, as long as they don't provide more than half of their own support and meet the other tests. The IRS is very clear about this in Publication 501. The confusion happens because people mix up the rules for Qualifying Children vs. Qualifying Relatives. As a college student under 24, the original poster would be evaluated under the Qualifying Child tests, where there is NO income limit - only the support test matters.

They're disputing her 2023 return (the one we filed earlier this year). And you're right about the timeline - dad passed in 2021, so she filed MFJ for 2021, then qualifying widow for 2022 and 2023. According to what others are saying, it seems the issue is definitely about my sister not being a full-time student.

Thanks for clarifying! Then yes, it does sound like the issue is about your sister's status as a qualifying child. Since she was over 19 and not a full-time student, she wouldn't meet the qualifying child definition for this purpose, even though she's still a legitimate dependent. The distinction between "qualifying child" and "qualifying relative" dependents trips up a lot of people. For the surviving spouse filing status, you specifically need a qualifying child dependent, not just any dependent.

This is good advice. I work with tax resolution cases, and the IRS will often work with taxpayers who are proactive. Even if the filing status determination is correct, there are options: 1) Payment plans (as mentioned) 2) Penalty abatement (can reduce the bill significantly) 3) In some cases, partial dispute of the assessment Don't just pay the full amount without exploring these options!