At 42, you're actually in a great position to make some serious progress on retirement savings! I'd suggest a hybrid approach based on your numbers: First priority: Get that full employer match in your 401(k) - that's $2,340 in free money annually (50% of 6% of $78k). Then build your emergency fund to about $20,000-25,000 (3-4 months of expenses assuming your monthly costs are around $5,000-6,000). Once you hit that emergency fund target, I'd aggressively ramp up 401(k) contributions. At your income level, the tax savings are substantial - every $1,000 you contribute saves you about $220-240 in federal taxes (22% bracket), plus state taxes if applicable. Don't forget about catch-up contributions either - once you hit 50, you can contribute an additional $7,500 annually to your 401(k) beyond the standard limit. That will be crucial for making up lost time. The key is finding the right balance where you have adequate liquidity for emergencies but aren't leaving tax-advantaged growth on the table. Your HYSA earning 4.2% is decent, but tax-deferred compound growth in your 401(k) over 20+ years will likely far outpace that, especially with the employer match.

I'm in a really similar situation - 39 years old and just getting serious about retirement planning after years of thinking I'd "figure it out later." Reading through all these responses has been incredibly helpful! One thing I want to add that hasn't been mentioned much is the psychological benefit of having that emergency fund fully funded first. I know the math says to prioritize the 401(k) match, but for me personally, having 6 months of expenses saved gave me the confidence to be more aggressive with retirement contributions afterward. The stress of not having an adequate safety net was actually preventing me from committing more to long-term investments. Once I hit my emergency fund target, I was able to bump my 401(k) contribution up to 15% without constantly worrying about "what if I need that money." Also, at 42, you still have 25+ years until traditional retirement age - that's plenty of time for compound growth to work in your favor, especially if you can gradually increase contributions as your income grows. Don't let the "starting late" mindset discourage you from being aggressive with your savings rate once you get your foundation in place.

Based on what you've described, your camper trailer should definitely qualify for the mortgage interest deduction as a second home! Since you're living in it 8 months out of the year and it has all the basic living facilities (kitchen, bathroom, sleeping area), you meet the IRS requirements. A few key things to keep in mind: Make sure your loan is secured by the camper itself - it sounds like it is since you mentioned a camper loan. You'll want to get documentation of the interest paid from your lender (Form 1098 if they issue one, or at least a year-end statement). Also, don't forget that any personal property taxes you pay on the camper may be deductible too. Since you're using this for work travel, you might also want to explore whether any portion could qualify for business deductions if you're self-employed or an independent contractor. Just make sure to keep detailed records of your work-related travel versus personal use. The documentation will be crucial if the IRS ever has questions about your deductions.

Great question about mobile living tax deductions! From what you've described, your camper trailer should absolutely qualify as a second home for mortgage interest deduction purposes. The IRS requirements are pretty straightforward - it needs sleeping, cooking, and toilet facilities (which you have), and you need to use it as a residence for at least 14 days per year or 10% of rental days. Living in it 8 months definitely exceeds this threshold. A few important points to consider: Make sure your loan is secured by the camper itself, keep all documentation of interest payments (request Form 1098 from your lender or at least a year-end interest statement), and remember that personal property taxes on the camper may also be deductible. Since you're doing seasonal contracting work, you might want to explore whether any portion could qualify for business deductions depending on your employment classification. If you're an independent contractor rather than a W-2 employee, there could be additional opportunities there. Either way, keep detailed records of work-related travel versus personal use - this documentation will be crucial for supporting your deductions. The key is that your camper functions as a legitimate residence, which it clearly does given your living situation. Just make sure to itemize deductions on Schedule A to claim the mortgage interest, and consider consulting with a tax professional who understands mobile living situations if you have complex circumstances.

Thanks everyone for all the detailed responses! This has been incredibly helpful. I had no idea about the distinction between "care" vs "education" costs or that our pre-k program might qualify for the Child and Dependent Care Credit. I'm going to contact our school's finance office tomorrow to ask them to break down our monthly $1,250 payment into care vs educational components. Since both my wife and I work full-time and our daughter is there from 8am-3pm, it sounds like a good portion should qualify as dependent care. I'm also going to look into whether my employer offers a Dependent Care FSA for next year - that could be a huge tax saver if we can set aside $5,000 pre-tax. For this year's taxes, I'll definitely explore using one of those AI tax tools mentioned to make sure I'm not missing anything. Really appreciate everyone sharing their experiences!

Great advice from everyone here! One additional thing to consider is timing - if you're planning to claim the Child and Dependent Care Credit, make sure you have all your documentation ready early in tax season. The IRS has been requesting more supporting documents for childcare credits lately. Also, don't forget that if your child turns 13 during the tax year, they only qualify for the dependent care credit for the months they were under 13. Since your daughter just turned 4, you're good for several more years, but it's something to keep in mind for future planning. Another tip: if your pre-k program offers summer care or extended year programs, those expenses can also qualify for the credit as long as they meet the same "care while you work" requirements. We used our school's summer program last year and were able to include those costs too.

I'm dealing with a similar situation right now! My assessment jumped 35% this year even though I haven't touched the property. One thing that really helped me was requesting the actual assessment worksheet from my county - it turned out they had my property listed as having central air conditioning when I only have window units, plus they counted my unfinished basement as finished square footage. The county assessor's office was actually pretty helpful once I got through to them. They walked me through exactly what documentation I needed for my appeal and explained their assessment methodology. It's definitely worth the effort to challenge it - even if you don't get the full reduction you're hoping for, any decrease will save you money for years to come. Also, make sure to apply for that homestead exemption someone mentioned earlier! We forgot to do that our first year too, and it would have saved us hundreds. Better late than never for next year's taxes. Don't let the bureaucracy intimidate you - as homeowners, we have the right to question these assessments, especially when they seem unreasonable like yours does.

That assessment jump is definitely worth fighting! I went through something similar in my county and discovered a few things that might help you: **Check for these common errors immediately:** - Square footage mistakes (they had mine wrong by 200+ sq ft) - Property classification errors (residential vs commercial rates) - Incorrect lot size or property boundaries - Features you don't actually have (pools, garages, finished basements, etc.) **Timeline reality check:** Many counties do allow appeals within 30-60 days of receiving your tax bill, not just by a calendar deadline. Some even have informal review processes where you can meet with an assessor to discuss obvious errors before filing a formal appeal. **Pro tip:** When you call the assessor's office, ask if they did a "mass reappraisal" or "statistical update" in your area for 2025. Sometimes counties use automated systems to update values that can create wild swings like yours, especially for recently sold properties. The fact that you bought in 2024 and the assessment immediately jumped 48% with zero improvements is a huge red flag. Counties sometimes assume new buyers paid market value and adjust assessments accordingly, but that doesn't account for the condition of the property or local market variations. Start gathering those comparable sales from your neighborhood right now - you'll need them regardless of when you can officially appeal. Don't let this stress you out too much; these challenges are more common than you think and often successful!

This is an excellent thread with lots of practical insights! As someone who's dealt with similar S Corp home office situations, I wanted to add a perspective on the timing considerations for making this decision. If your client has been consistently using the Schedule E rental approach for several years, switching to an accountable plan mid-stream requires careful consideration of the tax implications. You'll want to look at the cumulative depreciation taken on Schedule E, as this affects the basis in their home and potential recapture issues down the road. One approach I've successfully used is to run both scenarios (continuing with Schedule E vs. switching to accountable plan) to see the net tax impact over a 3-5 year period, including factoring in potential sale of the residence. Sometimes the depreciation recapture issue makes it worthwhile to stick with the current approach, especially if the rental income has been minimal. For the 2023 correction question, I'd recommend calculating both methods and only amending if there's a significant benefit. The IRS tends to scrutinize frequent changes in methodology, so you want to make sure you're settling on the approach you'll stick with long-term. Also worth noting: if your client is planning to expand their business use of the home or potentially move the business out of their residence in the near future, that could influence which approach makes more sense from a long-term planning perspective.

This has been an incredibly thorough discussion with excellent practical insights from everyone! I'm particularly impressed by the depth of analysis regarding the long-term implications of each approach. One additional consideration I'd like to add for practitioners dealing with these situations: documentation timing and consistency across related returns. When implementing an accountable plan, ensure that the corporate minutes reflecting the adoption of the plan are dated before the first reimbursements occur. I've seen situations where the IRS challenged accountable plan treatment because the formal documentation was created after the fact. Also, if your client has been taking home office deductions on their personal return (Schedule C) for any portion of their business activities, you'll need to carefully coordinate this with either the Schedule E rental or accountable plan approach to avoid double-dipping on deductions. For those considering the accountable plan route, remember that the plan should specify maximum reimbursement amounts and require pre-approval for larger expenses to maintain the business connection requirement. This is especially important for repairs and maintenance expenses, which can vary significantly from month to month. Finally, I'd recommend creating a simple annual review process with clients using either approach to ensure the business use percentage remains accurate as their operations evolve. Many taxpayers set this up initially and then forget to adjust it as their business grows or changes location within the home. The key takeaway from this discussion seems to be that both approaches can work, but proper documentation and consistent long-term application are critical regardless of which path you choose.