This thread has been absolutely fantastic! As a tax professional who regularly helps clients with withholding issues, I'm impressed by the quality of advice everyone has provided. The consensus around starting with 2 allowances is mathematically sound for your situation. One thing I'd add that might ease your concerns about potentially owing taxes: the IRS doesn't penalize you for underpayment as long as you owe less than $1,000 when you file, or if you've paid at least 90% of your current year's tax liability through withholding. Given your income level and the calculations shared here, 2 allowances would still likely result in you paying well over 90% of what you'll actually owe. Also, regarding your medical expenses - while the HSA/FSA advice is excellent, don't completely write off the itemized deduction possibility. With ongoing treatment for lupus and bipolar disorder, plus dental work, you might be surprised how quickly those expenses add up. Keep detailed records even if you use pre-tax accounts, as some expenses might not be FSA/HSA eligible but could still count toward itemized deductions. The most important thing is that you're being proactive about understanding your taxes rather than just accepting the default. That mindset will serve you well throughout your financial life!

This has been such an incredibly helpful discussion! I'm amazed at how much practical advice everyone has shared. Based on everything I've read, I feel confident about moving forward with 2 allowances as my starting point. The math breakdown really opened my eyes - I had no idea I was essentially giving the government a $3,000+ interest-free loan every year! Getting that money back in my paychecks throughout the year will make such a difference for my monthly budget, especially with my ongoing medical expenses. I'm planning to talk to HR this week about: 1. Changing to 2 allowances on my W-4 2. Looking into HSA vs FSA options for my medical expenses 3. Setting up direct deposit to automatically put some of that extra money into a separate savings account I'll also start tracking my monthly withholding against that ~$984 annual tax liability estimate so I can see if I need to make any mid-year adjustments. Thank you all for taking the time to explain everything so thoroughly and for sharing your personal experiences. As someone navigating financial independence for the first time, this community has made what felt overwhelming feel totally manageable. I really appreciate how everyone understood the unique challenges of managing finances with chronic health conditions too. I'll definitely come back and share how the changes work out over the next few months in case it helps someone else in a similar situation!

Don't forget you can also deduct tuition and fees as an adjustment to income (above-the-line deduction) instead of taking a credit. Sometimes that works out better depending on your tax situation.

I went through this exact same confusion last year! Here's what I learned from my research and talking to a tax professional: The 4-year AOTC limit follows the student, not the taxpayer, so those years your parents claimed it definitely count toward your total. Based on your description, you're likely at 3 years used (2016, 2017, 2021) with potentially one more if you claimed it in 2019 or 2020. A few additional tips beyond what others have mentioned: 1. If you can't easily access your parents' old returns, they can call the IRS directly and request information about education credits claimed for your SSN - the IRS can provide this over the phone. 2. When reviewing your own returns, look specifically for Form 8863 Part I. If you see "American Opportunity Credit" checked with your info, that's a used year. 3. Consider timing strategically - if you only have one AOTC year left, save it for when you'll have the highest qualified expenses to maximize the $2,500 credit. 4. Remember that qualified expenses for AOTC include tuition, fees, and required course materials (books, supplies, equipment), but not room and board. Good luck with your education financing! The credit tracking can be frustrating but it's worth getting it right.

CPA here. The issue is that lenders want to see a history of money actually flowing to you personally. Box 1 on your K-1 shows your share of business profits, but that doesn't necessarily mean you took that money home. Standard mortgage underwriting guidelines typically look at a 2-year history of distributions plus your W-2 wages from the S-Corp. The issue is that money left in the business (undistributed earnings) is at risk - you could lose it if the business fails, so lenders don't count it as stable personal income. My advice: Ask your accountant to provide a detailed analysis of both your W-2 income and actual distributions over the past 2 years. Also, look for lenders who specialize in self-employed borrowers or business owners. They often have more flexible underwriting for S-Corp situations.

Has anyone tried getting a loan through a credit union instead of a traditional bank? I've heard they sometimes have more flexible requirements for self-employed people and S-Corp owners. My brother-in-law got approved through his local credit union after being rejected by three banks.

I've been following this thread closely since I'm dealing with a very similar situation - missed capital loss carryovers from 2019-2021 that I need to correct before filing my 2024 return. Based on all the advice here, it sounds like the consensus is to file separate 1040X forms for each affected year rather than trying to shortcut it by just adjusting the carryover amount on this year's return. I appreciate everyone sharing their experiences, especially those who mentioned specific resources like Publication 550. One question I haven't seen addressed: if I'm correcting multiple years of carryovers and some of those corrections result in slightly different AGI amounts (due to the $3,000 annual limitation), could that potentially affect other deductions or credits that were calculated based on AGI in those years? I'm thinking things like student loan interest deduction phase-outs or retirement contribution limits. Should I be recalculating those as well when I file the amendments? I want to make sure I'm being thorough and not creating additional issues down the road by only fixing the capital loss portion without considering ripple effects on other parts of those returns.

I've been dealing with a similar capital loss carryover correction situation, and after reading through all these helpful responses, I want to add one important consideration that hasn't been fully addressed yet. If you're correcting multiple years of carryovers like Kevin's situation (2018-2020), make sure you understand the statute of limitations for amendments. Generally, you have 3 years from the original filing date or 2 years from when you paid the tax (whichever is later) to file a 1040X for refund purposes. However, if you're not seeking a refund but just correcting the carryover amount for future use, this timeline is less critical. That said, I'd recommend getting these amendments filed sooner rather than later. The IRS is more likely to accept and process corrections that are filed within a reasonable timeframe of discovering the error, and you'll have better documentation and records while the tax years are still relatively recent. Also, one thing that really helped me was creating a simple spreadsheet tracking my capital loss carryover from year to year before filing any amendments. This helped me visualize exactly what needed to be corrected in each year and served as supporting documentation for my explanation letters to the IRS. The process seems daunting at first, but breaking it down year by year and being methodical about it makes it much more manageable!

I went through this exact situation last year with gold stored in a Canadian vault. After much research and consulting with a tax attorney, here's what I learned: The IRS looks at the "substance over form" - meaning they care more about what you can actually do with the arrangement than how it's labeled. In your case, if you can: - Direct the custodian to sell your gold - Receive proceeds from sales - Get regular statements showing values - Have the custodian hold cash on your behalf Then you likely have a financial account that requires FBAR reporting since your value exceeds $10,000. For FATCA Form 8938, physical gold itself typically doesn't qualify as a "specified foreign financial asset" even when stored abroad. However, if your custodial arrangement has account-like features, it could potentially trigger FATCA reporting depending on your filing thresholds. I ended up filing an FBAR for my Canadian gold storage account to be safe. The penalties for non-filing are so severe (potentially 50% of the account value) that it's not worth the risk. Better to over-report than under-report with these foreign asset rules. I'd strongly suggest getting a consultation with a tax professional who specializes in international tax compliance - the $500-800 you'll spend on proper advice is nothing compared to the potential penalties on $175K in assets.

This is exactly the kind of complex international tax situation where the details of your specific arrangement really matter. Based on what you've described - physical gold worth $175K stored by a Swiss custodian - you're right to be concerned about potential reporting obligations. The key factor is whether your arrangement creates what the IRS considers a "financial account" versus simple storage. If your custodian can execute transactions on your behalf, provides account statements, or can hold cash proceeds from sales, that typically crosses the line into FBAR territory given your value exceeds $10,000. For FATCA Form 8938, direct ownership of physical gold generally doesn't trigger reporting even when stored overseas. However, if your custodial relationship has account-like features, you'd need to evaluate it against the filing thresholds. Given the potentially severe penalties for non-compliance (FBAR penalties can reach 50% of account value for willful violations), I'd strongly recommend getting a consultation with a tax professional who specializes in international compliance. The few hundred dollars for proper advice is minimal compared to your potential penalty exposure on $175K in assets. Don't try to guess on this one - the distinction between reportable and non-reportable arrangements can be subtle but has major consequences. Better to get definitive guidance now than face penalties later.