Did anyone address the OPs question about changing withholdings to "deduct mortgage interest month by month"? My understanding is you can adjust your W-4 to have less tax withheld based on ANTICIPATED deductions, but you're taking a risk if you end up not itemizing.

Great question! I went through this exact same confusion when I bought my first home last year. Here's what I learned after making some mistakes: The key thing everyone's touching on is that you need to compare your TOTAL itemized deductions against the standard deduction ($27,700 for married filing jointly in 2023). With your $425k mortgage, you'll probably pay around $20,000-25,000 in interest the first year (depending on your rate), plus property taxes, but that might still not exceed the standard deduction. Regarding withholding adjustments - yes, you can reduce your withholdings through your W-4 if you anticipate itemizing, but I'd be conservative. Maybe adjust for only 75% of what you think you'll save, because if you end up taking the standard deduction instead, you could owe money at tax time. My advice: Run the numbers with a tax calculator first, then make any withholding adjustments gradually. Better to get a refund than owe penalties!

I'm going through the exact same thing right now! Started a part-time tutoring job in October and just noticed they haven't withheld any federal taxes from my paychecks either, even though I've made about $1,900 so far. Reading through all these responses has been so enlightening - I had no idea that each employer's payroll system only looks at what you earn at that specific job when calculating withholding. So my tutoring income alone is below the threshold where federal taxes would be withheld, but combined with my main job, I'll definitely owe something at tax time. I'm planning to use the IRS Tax Withholding Estimator this week to figure out how much extra I should have withheld. The suggestion about just requesting additional withholding from my main job rather than trying to coordinate W-4 changes at both places sounds like the way to go. Thanks everyone for sharing your experiences - it's such a relief to know this is normal and fixable! Much better to deal with it now than get hit with a surprise bill in April.

This is such a common situation and you're smart to catch it now! I went through something very similar with my weekend catering job earlier this year. Made about $2,300 total but zero federal withholding the entire time, which had me pretty worried. The key thing I learned is that your employer's payroll system is doing exactly what it's supposed to do - it's calculating withholding based only on your earnings at that specific job. Since $2,100 annually is well below the standard deduction threshold, their system correctly determines that you wouldn't owe federal income tax on just that income alone. The issue, of course, is that this is your second job, so your combined income from both positions will likely put you in a situation where you'll owe taxes at filing time. I'd definitely recommend using the IRS Tax Withholding Estimator (it's free on their website) to get a clear picture of your total tax situation. It takes into account all your income sources and will tell you exactly how much additional withholding you might need. From there, you can either update your W-4 at the part-time job or - what I found easier - just request additional withholding from your main job to cover the shortfall. Don't stress too much about it though! Even if you end up owing some money at tax time, as long as it's not a huge amount, you likely won't face penalties. But getting it sorted now will definitely save you from any unpleasant surprises come April.

As someone who's been through this exact situation, I can definitely confirm that signing a Form 2848 (Power of Attorney) is completely standard practice! I was just as nervous as you are when my accountant first asked me to sign one. The form basically allows your accountant to communicate with the IRS on your behalf - things like responding to notices, getting copies of transcripts, or handling any questions that might come up about your return. It's actually really convenient because otherwise you'd have to be involved in every single interaction with the IRS. What I'd recommend is asking your accountant to show you exactly what they're checking off on the form. You can limit it to specific tax years (like just 2024) and specific forms (like just your 1040). Don't feel pressured to give them blanket authorization for "all years" if that makes you uncomfortable - especially since this is your first year working together. You were absolutely right to be suspicious of that other accountant asking for banking passwords! That's never normal. A legitimate accountant might ask for bank statements or other documents, but they should never need your actual login credentials. Good luck with your taxes! Sounds like you're asking all the right questions to protect yourself.

This thread has been incredibly helpful! I was in almost the exact same situation a few months ago - first time using a professional accountant after years of TurboTax, and I got really nervous when they asked me to sign Form 2848. What really helped me was doing some research on the IRS website about what the form actually does. It turns out it's not just normal - it's actually recommended by the IRS when working with tax professionals. The form creates a clear legal framework for your accountant to represent you, which protects both of you. One thing I learned that might be helpful: you can actually request a copy of your signed Form 2848 from the IRS at any time to see exactly what authorizations are on file. This gave me extra peace of mind knowing I could always verify what my accountant was authorized to do. Your instinct to be cautious is spot on, especially after that sketchy experience with the banking passwords. But based on everything I've learned, signing a properly completed Form 2848 with a reputable accountant is actually the professional way to handle the relationship. Good luck with your taxes!

Has anyone had experience with changing the account owner on a 529 plan? I'm thinking about making my son the owner of his 529 to simplify this whole process for future years.

Just went through this exact situation last year with my daughter! The key thing to remember is that even though you own the 529 account and receive the 1099-Q, your son can absolutely claim the education credits on his own return as long as he's not your dependent. Here's what we learned: The 1099-Q itself doesn't need to be "reported" as income if all the distributions went toward qualified education expenses. Your son would claim the American Opportunity Tax Credit or Lifetime Learning Credit based on the actual tuition and fees paid, regardless of the funding source. One important note - make sure to run the numbers both ways before deciding. Sometimes parents in higher income brackets actually benefit more from claiming the dependent exemption than the student gains from the education credits, especially if the student has little other income. But if you're phased out of the education credits due to income limits, then having your son claim himself usually makes more sense. Also keep good records showing the 529 distributions matched up with qualified expenses, just in case the IRS has questions later. The account ownership doesn't matter for tax purposes - what matters is who the beneficiary is and whose education expenses were paid.

Have you looked into whether your 401k plan allows for loans instead of hardship withdrawals? Many plans let you borrow up to 50% of your balance (max $50,000) for a primary residence purchase. The huge advantage is there's NO tax penalty since it's not a withdrawal - you're borrowing from yourself. You do pay interest, but you're paying it to your own 401k account. Usually you have to repay within 5 years, but some plans extend this to 15-30 years for home purchases. My wife and I did this for our down payment and it worked great. Just be aware that if you leave your job, you'll typically need to repay the full loan quickly or it converts to a distribution with all the penalties.

I went through this exact situation two years ago and want to share what I learned. You're absolutely right to be concerned about that penalty - it's brutal. The math on maxing out traditional 401(k) contributions to "offset" the withdrawal penalty doesn't work the way you're thinking, unfortunately. Here's why: When you contribute to traditional 401(k), you get a tax deduction that reduces your current year's taxable income. But when you do the hardship withdrawal, you're paying taxes PLUS the 10% penalty on that withdrawn amount. These are separate transactions that don't cancel each other out. What you'd essentially be doing is: putting money in tax-deferred → immediately taking it back out and paying taxes + penalty on it. You'd lose money on this strategy. Instead, seriously look into these alternatives: 1) 401(k) LOAN if your plan allows it (no penalty, you pay interest to yourself) 2) Check if you have any old IRAs - first-time homebuyer exception lets you withdraw $10K penalty-free 3) Look into state/local first-time buyer programs before touching retirement funds The 401(k) loan route saved me about $7,000 in penalties when I bought my house. Just make sure you understand the repayment terms and what happens if you change jobs.