Whoa, I had no idea about the sunset provision! That could be a huge deal for my uncle. He's in Massachusetts if that makes a difference for state-level taxes. Would you recommend he talk to a specialized estate planning attorney rather than his regular attorney who handles his other legal matters?

Massachusetts has a state estate tax threshold of only $1 million with tax rates ranging from 0.8% to 16%, so yes, this is definitely something your uncle needs to address regardless of federal exemption amounts. Absolutely recommend a specialized estate planning attorney rather than a general practitioner. Estate planning, particularly with estates approaching the federal exemption and in states with their own estate taxes, requires specific expertise. The right attorney can potentially save your uncle's estate hundreds of thousands or even millions in taxes with proper planning. The fee for specialized advice will be well worth it given the potential tax savings.

This is such an important point. My mother did something similar and it was a nightmare. Are there any types of trusts that offer tax benefits but still maintain some flexibility?

Wait, so if he enrolled in college classes the income limit wouldn't matter? Even at a community college? My daughter works part-time making about $8k but she's taking 3 classes each semester.

That's correct! If your daughter is under 24 and a full-time student (generally defined as taking a full course load for at least 5 months of the year), then the gross income test doesn't apply for determining if she's your qualifying child. She would need to meet the other tests: relationship (your daughter, so check), residency (lived with you for more than half the year), age (under 19 or under 24 if full-time student), and support (you provide more than half her support). The number of classes determines full-time status according to the school's definition, so 3 classes might qualify if her school considers that full-time.

Your friend is probably claiming her daughter as a qualifying child rather than a qualifying relative. If her daughter is a full-time student under 24, the income limit doesn't apply. The rules are different depending on which type of dependent they are.

Good point! I just checked and you're right - my state withholding also changed on my part-time job. I'm in Illinois, and it looks like they increased the state withholding percentage at the same time as the federal. Any specific suggestions for handling state withholding with multiple jobs? Is it similar to federal or do they have different rules?

State withholding generally follows similar principles to federal, but each state has its own specific forms and calculation methods. For Illinois, they use your federal allowances as a starting point for state withholding calculations. I'd recommend checking the Illinois Department of Revenue website for their withholding calculator or Form IL-W-4. Since both jobs are now withholding correctly, you might just need to make sure your additional withholding amount on your full-time job's W-4 is adjusted downward to account for the new withholding happening at your part-time job. The goal is to get your total withholding across both jobs to match your expected tax liability.

That's actually by design! The 2020 W-4 redesign and IRS withholding tables are set up so that if you check the multiple jobs box, your second/lower paying job often has a higher withholding percentage. This is because the system assumes your first job already uses up your standard deduction and lower tax brackets, so additional income is taxed at higher marginal rates.

Wait seriously? You can actually write off pedicures as a business expense for feet pics? That seems too good to be true lol

Absolutely! If the pedicures are specifically for your photoshoots and business purposes, they're a legitimate business expense. Think of it like this - if a hand model gets manicures for photo shoots, that's a business expense. Same principle applies to foot modeling/pics. Just make sure you're being honest about the business purpose and keep good records. I keep a separate calendar where I note when I got pedicures specifically for photo sessions versus personal ones. Same with any special foot care products or accessories I buy exclusively for shoots. The key is that these expenses must be "ordinary and necessary" for your specific business - which in the case of foot content, professional foot care definitely qualifies!

Are the costs for copyright registration and protection software tax deductible? Seems like they would be but just checking.

I don't think I received any special credits last year - I don't have kids and didn't qualify for most of those pandemic-related things. My income did go up slightly (about $1,500 more than last year), but I didn't think that would make such a big difference. One thing I'm wondering about - I did start contributing to my company's 401k this past September. Would that affect my refund in any way? I'm putting in about 4% of my paycheck.

Your 401k contributions actually should have helped your tax situation, not hurt it. Those contributions reduce your taxable income, which typically means less tax overall. Since you started in September, you might not see the full annual benefit, but it definitely wouldn't cause your refund to decrease. Given all the information you've shared, it really does sound like the withholding change is the primary factor. The good news is that you didn't actually lose money - you just received it gradually throughout the year instead of in one lump sum. For next year, definitely submit a new W-4 requesting additional withholding if you prefer the larger refund approach to saving.

This is exactly right. A tax refund is just the government giving back money they took too much of during the year. Ideally, your refund should be close to zero - that means you paid exactly what you owed, no more no less.