Quick tip: If you're using TurboTax or H&R Block software, when you enter your 1098 information, they'll specifically ask about property taxes paid. Enter what's in Box 10 BUT ALSO have your actual property tax statements handy. The software will help reconcile any differences. I found out that my mortgage company only paid a portion of my property taxes from escrow, and I paid the rest directly to the county. If I had only claimed what was on my 1098, I would have missed out on about $2,300 in additional deductions for the portion I paid directly.

This is such a helpful thread! I had the exact same confusion with my 1098 form last year. One thing I'd add is that if you have multiple properties or a complex escrow situation, it's worth requesting a detailed breakdown from your mortgage servicer. I called my lender and asked for an escrow analysis statement that showed exactly when each property tax payment was made and for which tax period. This helped me figure out that some of my 2023 tax year payments were actually made in early 2024, so they wouldn't appear on my 2023 1098 form. The bottom line is: always use your official county property tax statements as the source of truth, and treat the 1098 as helpful supplementary information. The asterisk is just their way of saying "we're giving you this info to help, but don't hold us responsible if there are discrepancies.

If you're in California, don't forget to file your state taxes too! They go to a completely different address: Franchise Tax Board PO Box 942840 Sacramento, CA 94240-0001 I made that mistake once thinking they were somehow connected.

The confusion about mailing addresses is totally understandable - the IRS has been consolidating processing centers and the information online isn't always updated consistently. For California residents filing prior year returns without payment, the current address should be: Department of the Treasury Internal Revenue Service Ogden, UT 84201-0002 However, this can vary depending on the specific tax year you're filing for. For returns older than 2019, you might need to use the Austin, TX center instead. My advice: Before you mail anything, try calling the IRS at 1-800-829-1040 to confirm the correct address for your specific situation and tax year. Yes, the wait times are brutal, but it's worth the peace of mind to know you're sending it to the right place. Make sure to send it certified mail with return receipt so you have proof of delivery. Also, definitely include a cover letter clearly stating which tax year you're filing for and write the tax year prominently on your Form 1040. This helps prevent processing delays.

Random question but related - does anyone know if unemployment benefits count toward the income that's measured against the standard deduction? I got laid off for a few months last year and wondering how that affects all this.

Just want to add one more important point that might help you plan for next year - if you're going to be in a similar income situation, you might want to consider adjusting your withholdings so you don't have as much federal income tax taken out of each paycheck. Since you'll only owe federal income tax on about $50 of your income, you're probably having way more federal tax withheld than necessary. You could use Form W-4 to reduce your withholdings and get more money in each paycheck instead of waiting for a big refund. Just remember that SS and Medicare taxes (7.65% total) will always be taken out regardless. This way you'd have more cash flow throughout the year instead of essentially giving the government an interest-free loan. Just make sure to set aside a small amount for that ~$50 in federal tax you'll actually owe!

Has anyone managed to get this right using the Free File Fillable Forms? I'm having the same negative AGI issue and I can't figure out which form is causing the problem. Is it Schedule 1 or Form 2555 that I need to fix?

I had this exact same issue last year! The negative AGI is definitely not normal and indicates an error in how you're entering the foreign earned income exclusion. What's happening is that Free Fillable Forms is applying the full $121,500 exclusion amount against your $95,000 income, creating a negative $26,500 AGI. You should only exclude what you actually earned abroad ($95,000 in your case). On Form 2555, make sure you're entering your actual foreign earned income amount, not the maximum allowable exclusion. The form will automatically limit it to the annual maximum, but it can't exclude more than you actually earned. Once you fix this on Form 2555, it should carry over correctly to Schedule 1 and your 1040, eliminating the negative AGI. This is a really common mistake with the FEIE - I think a lot of people assume you should always claim the maximum, but that's not how it works.

OP, I'm in a similar situation (W2 income married to sole prop business) and we found that filing jointly saved us about $4,800 compared to filing separately. The biggest factors were: - Higher income thresholds for child tax credit - Being able to offset business losses against W2 income - Lower overall tax brackets - Full retirement account options My wife's business actually had a rough year and showed a small loss, which directly reduced our taxable W2 income. That wouldn't have helped if we filed separately.

Congratulations on your new baby girl! As a tax professional, I can tell you that filing jointly is almost certainly your best option given your situation. Here's why: With $145k combined income and a new baby, you'll benefit significantly from the Child Tax Credit ($2,000), which has much higher income phase-out limits for joint filers ($400k vs $200k for separate). Your wife's photography business income will also work better on a joint return because: - Any business losses can offset your W2 income directly - She may qualify for the 20% Qualified Business Income deduction, which phases out at higher income levels for separate filers - Self-employment tax stays the same regardless of filing status The main scenarios where separate filing helps are: - Large medical expenses (3% AGI threshold is easier to meet with lower individual income) - Student loan income-based repayments - One spouse has significant miscellaneous deductions Given your income levels and new child, I'd estimate joint filing will save you $2,000-4,000 compared to separate filing. The standard advice is always to calculate both ways, but joint filing has significant advantages for most married couples with children. Make sure your wife is tracking all business expenses and considering quarterly estimated payments for 2025!