Y'all are making this way more complicated than it needs to be. Just look at your W-2 at the end of the year. Box 12 with code W shows your HSA contributions. Whatever your employer reports there is what the IRS will see. Most payroll systems automatically handle this based on pay date, not pay period. If you want to be 100% sure, just ask your payroll department to show you how the January paycheck will be coded on your W-2. That will tell you which year it counts toward.

Don't forget that if you can't max out through payroll for whatever reason, you can still make direct HSA contributions (outside of payroll) until the tax filing deadline. You'll miss out on the FICA tax savings that payroll deductions give you, but you'll still get the income tax deduction.

This is definitely not normal! A few things to check immediately: First, look at your actual W-4 form that you submitted - sometimes the online systems can have confusing layouts that make it easy to accidentally select the wrong options. Second, verify with payroll that your hourly rate was entered correctly in their system (as others mentioned, data entry errors can cause massive withholding miscalculations). Also, some payroll systems have a "backup withholding" feature that kicks in if they think your W-4 is invalid or incomplete - this can result in them withholding at the highest possible rate (which could be close to 100% for smaller paychecks). Ask your payroll department specifically if backup withholding was applied to your check. The good news is that any over-withholding will come back to you as a refund when you file your taxes, but obviously you need your actual paycheck now! Don't let them brush this off - demand a detailed explanation of exactly what withholding codes were applied and why.

This sounds incredibly frustrating! Having your entire paycheck withheld is definitely not normal, even with 0 exemptions. I've seen a few cases like this, and it's usually one of several issues: 1. **Data entry error**: Your hourly rate might be entered incorrectly in the system (like $267 instead of $26.70 per hour), making the system think you're in a much higher tax bracket. 2. **W-4 processing error**: Sometimes the online forms glitch or get misinterpreted by payroll software. Even a small mistake like checking "married filing separately" instead of "single" can dramatically increase withholding. 3. **Backup withholding**: If the system flagged your W-4 as incomplete or invalid for any reason, it might default to maximum withholding rates. I'd definitely call payroll ASAP and ask for a detailed breakdown of your withholding. Specifically ask: what tax filing status they have on file, what your hourly rate shows in their system, and whether any backup withholding was applied. Don't let them give you vague answers - you deserve to know exactly where every dollar went. The silver lining is that any over-withholding will come back to you as a tax refund, but obviously you need your actual paycheck now! Keep us posted on what you find out.

11 Just a word of caution from someone who went through an audit on exactly this issue. The IRS agent was primarily focused on the "material participation" test and whether I had documentation to prove how much time I spent on various services. Even though I was providing what I thought were substantial services, I couldn't prove exactly how many hours I spent on each task. The IRS ultimately reclassified my income from Schedule C to Schedule E because I lacked adequate time logs. Now I use a time-tracking app to document EVERYTHING I do related to the rental - from answering guest messages (screenshots with timestamps) to shopping for supplies (with receipts) to doing property maintenance (with dated photos). If you're serious about claiming this as self-employment income, start documenting your time meticulously RIGHT NOW. It made all the difference when I was audited again the following year.

This is such a helpful discussion! I'm in a similar situation with my mountain cabin rental and have been going back and forth on this exact issue. One thing I haven't seen mentioned yet is the impact of local regulations on this classification. In my area, short-term rentals are required to have 24/7 on-site management response, daily safety inspections, and we must provide certain amenities by law. These regulatory requirements essentially force us to provide what could be considered "substantial services." I'm wondering if anyone has had success using local STR regulations as supporting documentation for self-employment classification? It seems like if the government is requiring you to provide hotel-like services, that could strengthen the argument that you're running an active business rather than just renting property. Also, for those tracking time - I've found that breaking down services into categories helps: guest communication, property maintenance, cleaning/turnover, guest services (recommendations, problem-solving), and regulatory compliance. The IRS seems to view guest-focused services differently than property maintenance when evaluating the substantial services test.

This is an incredibly eye-opening post that everyone dealing with tax issues needs to read. The breakdown of how these companies operate - especially the "investigation phase" that's literally just ordering transcripts you can get for free - is shocking but not surprising. I'm particularly disturbed by the targeting of vulnerable populations you mentioned. It's predatory to specifically go after elderly people, veterans, and those already struggling financially. These are exactly the people who can least afford to waste thousands on services they could handle themselves. One thing I'd add for anyone reading this: if you're scared of dealing with the IRS directly, remember that ignoring the problem or paying these inflated fees to middlemen only makes things worse. The IRS actually has taxpayer advocates and offers free resources through VITA programs for lower-income taxpayers. Has anyone here successfully handled their own tax resolution after initially considering one of these companies? It would be helpful to hear some success stories to encourage others to take the DIY approach rather than getting scammed.

This is exactly the kind of insider information that needs to be shared more widely. As someone who received one of those scary IRS notices last year, I can confirm how vulnerable and desperate you feel in that moment. The relief companies prey on that fear perfectly. What really strikes me is how the entire business model is built on keeping people in the dark about what they can do themselves. The fact that ordering your own tax transcripts takes 5 minutes and is completely free, yet they charge hundreds for this "investigation phase" is particularly egregious. I'm curious about one thing - do these companies ever actually deliver good results for anyone, or is it basically a scam across the board? I imagine there must be some success stories they point to, even if they're rare exceptions rather than the norm. Also, for those reading this who are currently dealing with tax issues - don't let fear paralyze you into making expensive mistakes. The IRS has payment plan options, hardship programs, and yes, even real humans who will work with you. The sooner you address it directly, the less you'll end up paying in penalties and interest, and the more money you'll keep in your own pocket instead of lining these companies' coffers.

Sorry if this is a dumb question, but I'm confused about the ITIN application. Can I just apply for an ITIN for my spouse now, before tax season, or do I have to wait and submit it with my tax return?

Just wanted to add a few practical tips from someone who went through this exact process last year with my husband working in Canada: 1. **Document organization is key** - Start gathering all your spouse's foreign tax documents, pay stubs, and bank statements now. You'll need certified translations if any documents aren't in English, which can take time. 2. **Consider the timing carefully** - ITIN processing typically takes 7-11 weeks, so if you're filing jointly and need that ITIN, plan to file your return by early February at the latest to avoid extension issues. 3. **Double-check exchange rates** - Use the IRS's published annual average exchange rates for currency conversion, not daily rates. You can find these on the IRS website under "Yearly Average Currency Exchange Rates." 4. **Keep detailed records** - The IRS may ask for additional documentation later, especially for foreign income reporting. I kept copies of everything including bank statements showing the original currency amounts. One thing that surprised me was that even though we qualified for the Foreign Earned Income Exclusion, we still had to report the income first, then claim the exclusion. The forms can be confusing but it's totally doable with patience! Good luck with your filing - the first year is always the most complicated but it gets easier once you understand the process.