I'm dealing with a similar situation right now! My 20-year-old son is a dependent and made about $12,000 from his retail job last year. I was initially confused about whether to include his income since he files his own return, but after reading through this thread and doing some research, I confirmed that yes - his income absolutely needs to be included in our household MAGI for Form 8962. One thing I learned that might help others: if your dependent has multiple income sources (like my son had both W-2 wages and some 1099 freelance income), you need to include ALL of it in the household MAGI calculation. Don't forget about things like interest income, unemployment compensation, or other taxable income your dependent might have received. I ended up using tax software to help with the Form 8962 calculations since doing it by hand seemed overwhelming. The software automatically prompted me to enter my dependent's income information, which made the process much smoother. Just make sure whatever method you use, you're including the full household income - it can really impact your final Premium Tax Credit amount!

I just went through this exact situation with my 18-year-old dependent who earned $9,200 last year! The confusion is totally understandable because it seems counterintuitive that you'd include income from someone who files their own return. Here's what I learned: for Form 8962, you absolutely must include your daughter's $8,400 in your household MAGI calculation. The IRS treats your "tax household" as everyone you claim as dependents, regardless of whether they file separately. So your household MAGI will be your income + spouse's income (if married filing jointly) + your daughter's $8,400. A few practical tips that helped me: - Make sure you have a copy of her W-2 when you're doing your Form 8962 - Double-check that you're using the current year's Federal Poverty Level guidelines (they're in the Form 8962 instructions) - If you received advance premium tax credits, be prepared for the possibility that including her income might mean you owe some back - but there are repayment caps that limit how much The good news is that $8,400 probably won't drastically change your credit amount unless you're right on the edge of an income bracket. The Premium Tax Credit phases out gradually based on percentages of the Federal Poverty Level, so it's not an all-or-nothing situation. Don't stress too much about getting it perfect - just make sure you include all household income and follow the form instructions step by step. You've got this!

This is such a comprehensive thread - thank you all for sharing your experiences! I'm currently preparing for my VITA certification and feeling much more confident after reading through everyone's tips. One question I haven't seen addressed yet: Are there any specific areas where the 2025 tax law changes have impacted the certification test content? I know there were some updates to the Child Tax Credit and EITC provisions, and I want to make sure I'm focusing my study time on the most current information. Also, for those who used the tabbing strategy mentioned earlier - do you have recommendations for which specific sections of the publications to tab? I'm thinking of color-coding different topics but want to make sure I'm not overdoing it and making my reference materials harder to navigate during the actual tests. Really appreciate this community sharing so much practical advice. It's making the whole certification process feel much more manageable!

This thread has been incredibly helpful! I'm currently enrolled in a tax prep course and need to complete my VITA certifications by next month. Reading through everyone's experiences has really eased my anxiety about the process. I wanted to add one tip that helped me during my practice sessions - when working through the dependency scenarios, I found it useful to draw out family trees on scratch paper. It sounds silly, but visualizing the relationships really helped me work through those complex tiebreaker rules, especially when multiple people could potentially claim the same dependent. Also, for anyone still deciding whether to attempt the Basic exam for extra credit - I'd say go for it if you have the time. The additional study required really solidified my understanding of the fundamental tax concepts, which I think will make me a better volunteer when I start at the VITA site next year. Thanks again to everyone who shared their strategies and experiences. It's amazing how supportive this community is!

This thread has been incredibly helpful! I'm also running an S-Corp and had the exact same confusion about W2 reporting for 401k contributions. I was actually getting ready to switch payroll companies because I thought mine was making an error by not showing employer matches on the W2s. After reading through all these explanations, I finally understand the logic: employee deferrals reduce current taxable income (so they must be reported in Box 12), while employer matches are just a business expense that doesn't impact the employee's current year tax situation at all. The employer contributions will be taxed much later when withdrawn in retirement, but for current W2 purposes, they're irrelevant. What really clicked for me was the CPA's explanation about "current-year tax benefit vs. future tax implications." That distinction makes perfect sense once you think about it that way. For other S-Corp owners dealing with this same confusion: your payroll company is almost definitely doing this correctly if they're only showing employee deferrals in Box 12 and no employer match amounts anywhere else on the W2. Don't second-guess them like I almost did!

This discussion perfectly captures the confusion so many S-Corp owners experience with 401(k) reporting! I went through this exact same panic when I first reviewed my company's W2s a few years ago. What helped me finally understand this was realizing that the W2 is specifically designed to report items that affect the employee's current year personal income tax calculation. Employee deferrals reduce current taxable wages (hence Box 12 with Code D), but employer matches are essentially "future money" that won't be taxed until retirement withdrawals begin. For anyone still feeling uncertain about this: I'd recommend double-checking with your 401(k) plan administrator that they're properly tracking and reporting all contributions through Form 5500. That's where the employer matches get officially reported to the IRS - just not on individual W2 forms. It's also worth noting that this same principle applies regardless of your 401(k) provider (Fidelity, Vanguard, etc.) or payroll company. The reporting rules are consistent across all traditional 401(k) plans for S-Corps.

Could also be worth asking if she's part of a larger firm with specific policies or if she's independent. Different firms have different document retention policies. I've worked with H&R Block before and they never asked for copies of my SSN card, just needed to see it once to verify.

I'm a CPA and I can confirm that requesting copies of SSN cards is NOT standard practice in our industry. We need your SSN to prepare your return, but we don't need physical copies of the cards themselves. The IRS Due Diligence requirements for tax preparers focus on verifying identity through government-issued photo ID (like driver's license) and ensuring the SSN matches the taxpayer, but keeping copies of SSN cards isn't part of these requirements. Her explanation about "security issues" doesn't make sense from a professional standpoint. If someone tries to fraudulently use your SSN, having a copy of your card won't help prevent or resolve that situation. What WOULD help is proper data security practices on her end - encrypted storage, secure client portals, and following IRS Publication 4557 guidelines for data protection. I'd recommend asking her to provide written documentation of her firm's document retention policy and why specifically she needs copies rather than just verification. A legitimate tax professional should be able to explain their practices clearly and provide documentation of their security protocols.

Something else to consider: if your state offers income tax benefits for 529 contributions, make sure you understand how those work! My wife and I messed this up last year. We live in New York which gives a state tax deduction for up to $5,000 per year ($10,000 for married couples) for contributions to NY's 529 plan. We had my in-laws contribute directly to our son's 529, but then found out WE couldn't claim the state tax deduction because we weren't the ones who made the contribution! Would have been smarter to have them give us the money and then WE contribute it to get the tax benefit.

Congratulations on becoming a dad! The 529 planning can definitely feel overwhelming at first, but you're smart to start early. One thing that might help simplify the decision-making process is to think about it in stages rather than trying to figure everything out at once. For the immediate term, you and your wife can each contribute up to $18,000 annually without any paperwork hassles. That's $36,000 per year just from you two. Then each set of grandparents can also contribute their own amounts using the same limits. If someone wants to contribute more than $18,000 in a single year, that's when the 5-year election comes into play, but honestly, unless your family is planning to contribute huge amounts right away, you might not even need to worry about that complexity initially. My suggestion would be to start with a basic contribution plan that stays within the annual limits, get the account set up and running, and then tackle the more complex gifting strategies later as your daughter gets older and your family's financial situation evolves. The most important thing is getting started - you can always adjust the strategy as you learn more!