Just wanted to add something about tracking plasma donations that might help - I use a simple notes app on my phone to record each donation right after I'm done. I include the date, amount, and location. At the end of the year, I export it all to a spreadsheet. Super easy and you never forget to log a donation since you do it immediately. Also regarding the IRA withdrawal - if you're really unsure about your tax bracket, consider doing a partial withdrawal first to see how it affects your taxes, then do the rest if needed. Some people don't realize that a large withdrawal can bump you into a higher bracket temporarily, so breaking it into smaller amounts across tax years might save you money overall.

Great advice in this thread! I wanted to add one more consideration for the IRA withdrawal - if you're planning to take out a larger amount, you might want to consider having them withhold at the highest rate you think you might hit, then adjust your regular paycheck withholdings for the rest of the year to compensate. For example, if you think you'll be in the 22% bracket but the withdrawal might push some income into 24%, have them withhold 24% from the IRA but then reduce your paycheck withholdings slightly for the remaining months. This way you're not giving the government an interest-free loan for the whole year, but you're still covered tax-wise. Also, don't forget that if you're doing estimated quarterly payments for other income (like if you have significant plasma donation income), the IRA withdrawal might affect those calculations too. The IRS wants to see steady payments throughout the year, not just a big settlement at tax time.

One more thing to consider - if you're taking out construction loans, you need to be tracking loan proceeds carefully. Not all construction loan interest is immediately deductible. Interest paid on funds sitting unused might need to be capitalized into the basis of the property rather than deducted immediately.

This is a complex situation that highlights why proper business structure matters from the start. Based on what everyone has shared, it sounds like you have a few key issues to address: 1. **Partnership Formation**: Even without formal paperwork, you and your mother-in-law have created a partnership in the eyes of the IRS. You're pooling resources and sharing profits/losses on a business venture. 2. **Construction Interest Treatment**: The interest on your construction loan should likely be capitalized into the property's basis rather than immediately deducted, since you're building to sell. This means it reduces your taxable profit when you sell rather than giving you a current deduction. 3. **Required Filings**: You should be filing Form 1065 (Partnership Return) and issuing K-1s to both partners. Missing this could result in significant penalties. My recommendation: Get a written partnership agreement ASAP that documents your arrangement from the beginning, consult with a tax professional about proper treatment of the construction interest, and file the correct partnership returns. The potential penalties and audit risks of doing this incorrectly far outweigh the cost of getting proper guidance upfront. Don't try to force this into Schedule A - that's for personal itemized deductions, not business expenses from investment properties.

One thing to consider if you give your nephew money directly or to his 529 plan - it could potentially impact his financial aid package if he's receiving any need-based aid. Money in a student's name is assessed at a higher rate (20%) than parent assets (around 5.6%) when calculating the Expected Family Contribution. Might want to coordinate with his parents about this.

Great advice from everyone here! Just to add another perspective - since you're in California and your nephew will be in Pennsylvania, make sure you understand which state's 529 plan might work best. While California doesn't offer state tax deductions for 529 contributions, some other states allow non-residents to get deductions if they contribute to that state's plan. Pennsylvania actually does offer a state tax deduction for PA 529 contributions, but only for Pennsylvania residents. However, if your nephew's parents are PA residents, they could potentially benefit from any contributions they make. One strategy might be to give the money to your nephew's parents, who could then contribute to the PA 529 plan and potentially get the state tax benefit themselves. This would require coordination with them and might complicate the gift tax situation slightly, but could maximize the overall tax efficiency for the family. Also echoing the financial aid concern mentioned earlier - definitely coordinate with his parents about timing and structure to minimize any negative impact on his aid package!

Your W-2 should absolutely show 2023 at the bottom! I was confused about this same thing when I started filing my own taxes. The year on your W-2 always corresponds to the tax year being reported, not when you actually receive the document. Since you're filing your 2023 tax return (which happens in 2024), your W-2 needs to show 2023 because it's documenting the income you earned and taxes withheld during the 2023 calendar year. Your employer was required to get this form to you by January 31, 2024, but it's still reporting 2023 data. If your W-2 shows 2024 instead, that's definitely an error - you can't have a complete W-2 for 2024 since the year isn't over yet! You'd need to contact your employer for a corrected form before filing. A quick verification tip: check that the wage amounts in Box 1 match roughly what you remember earning throughout 2023. If the numbers seem right for last year's work, then you're all set to proceed with your tax software. Don't feel silly about double-checking this - it's actually really smart to verify everything before you start the filing process!

Your W-2 should definitely show 2023 at the bottom! This is one of those things that seems confusing at first but makes total sense once you understand the logic. The year on your W-2 represents the tax year being reported - so since you're filing your 2023 taxes, you need a W-2 that shows 2023, even though you received it in 2024. Think of it this way: your W-2 is essentially a summary report of what happened between you and your employer during the entire 2023 calendar year. Your employer had until January 31, 2024 to get it to you, but it's still documenting 2023 earnings and withholdings. If your W-2 shows 2024 at the bottom, that would actually be impossible since 2024 isn't complete yet - there's no way to have a full year's worth of earnings data for a year that's still in progress! A good way to double-check you have the right form is to compare the wages in Box 1 with what you remember earning throughout 2023. If those numbers align with your expectations from last year, you're good to go with your tax software. This is actually a really smart question to ask before starting your return!

Has anyone dealt with Form 8854 (Expatriation Statement) in this kind of situation? I think that's required when surrendering a green card if you've had it for a certain period.

This is definitely a complex situation that requires careful consideration of multiple factors. Based on what you've described, your wife likely still qualifies as a U.S. tax resident under the substantial presence test since she's in the U.S. for about 9 months (270+ days) per year. Here are the key points to consider: 1. **Substantial Presence Test**: With 270+ days in the U.S., your wife likely meets this test and would be considered a U.S. tax resident for tax purposes, regardless of surrendering her green card. 2. **Filing Status**: If she's considered a tax resident, you can continue filing jointly as before, and her worldwide income (including the foreign rental income) would need to be reported on your U.S. tax return. 3. **Foreign Tax Credits**: If she's paying taxes on the rental income in her home country, you may be able to claim foreign tax credits on Form 1116 to avoid double taxation. 4. **Additional Considerations**: - Check if there's a tax treaty between the U.S. and her home country that might provide beneficial treatment for rental income - If she has foreign bank accounts totaling over $10,000, don't forget about FBAR requirements - Depending on when and how long she held the green card, Form 8854 might be required Given the complexity of international tax situations like this, I'd strongly recommend consulting with a tax professional who specializes in expatriate taxation, at least for this first year under the new circumstances.