Don't forget to consider other deductions like mortgage interest, student loan interest, retirement contributions, and charitable giving when figuring out your withholding. These can significantly impact your final tax bill. For example, if you're contributing to 401(k)s or IRAs, that reduces your taxable income. Same with HSA contributions if you have a high-deductible health plan. Also, with three kids, you should be getting substantial child tax credits depending on their ages. The child tax credit is $2,000 per qualifying child (currently), so that's a significant reduction in your actual tax liability.

With your combined income of around $168,000 and three dependents, you're definitely right to be concerned about withholding strategy. The income disparity between you and your wife (roughly 3.2:1 ratio) means the standard "Married Filing Jointly" withholding tables will likely underwithhold for your situation. Here's what I'd recommend based on your specific numbers: **For Your W-4:** - Keep "Married Filing Jointly" status - Claim all three dependents in Step 3 ($6,000 total) - Check box 2(c) for "Multiple Jobs or Spouse Works" - Consider adding an additional amount on line 4(c) - I'd estimate around $200-300 per month to be safe **For Your Wife's W-4:** - "Married Filing Jointly" status - Don't claim any dependents (since you're claiming them) - Also check box 2(c) The reason both of you should check 2(c) is that with such a significant income difference, the withholding needs to account for your combined income pushing you into higher tax brackets. However, the most accurate approach would be to run your numbers through the IRS Tax Withholding Estimator after your wife gets her first few paystubs. This will give you the exact additional withholding amount needed. Don't forget that your bonus will have taxes withheld at the supplemental rate (22% federal), but depending on your total tax liability, this might not be enough coverage anymore with your higher combined income.

This is a great question and I'm glad you're being proactive about handling this properly. Based on the discussion here, it sounds like you're actually in good shape since you used a payroll service to issue the W-2. One thing I'd add is that you might want to give your nanny a heads up about this situation now, before tax season gets into full swing. Let them know they may receive both forms but that the Venmo payments were just the delivery method for their W-2 wages, not separate income. You could also provide them with a simple letter stating the total amount paid through Venmo and confirming it represents their employment wages as reported on their W-2. This kind of documentation can be really helpful if they ever need to explain the situation to a tax preparer or the IRS. It's refreshing to see someone taking household employee taxes seriously - a lot of people don't realize they need to handle nannies as actual employees rather than independent contractors.

Thank you for bringing up this important topic! As someone who's dealt with similar household employee situations, I want to emphasize a few key points that might help other families in similar situations. First, you absolutely did the right thing by using a payroll service to handle the W-2 - that's the legally compliant approach for household employees. The method of payment (Venmo vs. direct deposit vs. checks) doesn't change the employment relationship or tax obligations. For 2023 taxes, your nanny likely won't receive a 1099-K unless they received over $20,000 through Venmo with 200+ transactions, so this may not even be an issue for you this year. But it's smart to plan ahead since those thresholds are expected to decrease. One practical tip: consider switching to direct deposit through your payroll service for future payments. It eliminates any potential confusion about 1099-K forms and creates a cleaner paper trail. Most payroll services offer this at minimal cost, and it's actually easier for record-keeping on both sides. Also, make sure you're filing the required Schedule H with your personal tax return and paying the household employment taxes. Since you mentioned you're handling the tax compliance properly through the payroll service, you're probably already on top of this, but it's worth mentioning for other readers who might be in similar situations.

I'm dealing with something very similar right now! My employer filed a W2C back in October, but when I called the IRS last week, they said they only see my original W2 from January. It's so frustrating because my employer keeps insisting they submitted everything correctly. Reading through these responses has been really helpful - I had no idea about the SSA wage transcript or that there could be delays between the SSA and IRS systems. I'm definitely going to try getting documentation from both agencies to compare what they each have on file. Has anyone had success with asking their employer for the SSA submission confirmation number? My HR department has been pretty vague about whether they actually have proof of submission, and I'm wondering if I should be more specific about what documentation I need from them. Also, for those who used the fax method - did you send it to a specific IRS fax number, or just the general correspondence address? I want to make sure I'm sending my documentation to the right place so it doesn't get lost in their system. Thanks everyone for sharing your experiences - it's reassuring to know I'm not the only one dealing with this kind of bureaucratic nightmare!

I went through this exact nightmare two years ago and what finally worked was being extremely persistent with documentation. The key breakthrough for me was requesting what's called a "CADE 2 transcript" from the IRS - this shows their real-time system data rather than the standard transcripts that might be outdated. When I compared the CADE 2 transcript with my SSA earnings record, it became crystal clear that the IRS system hadn't been updated with my W2C information even though SSA had it. I printed both documents, highlighted the discrepancies in bright yellow, and hand-delivered them to my local IRS Taxpayer Assistance Center rather than mailing or faxing. The local office was able to input a "manual correction" immediately while I waited, and they gave me a printout showing the adjustment had been made to my account. My refund was released within 10 days after that. The moral of the story: sometimes you need to physically show up with paperwork in hand. The local offices have more direct access to make immediate corrections than the phone representatives do. Call ahead to make an appointment and bring every single piece of documentation you have - original W2, W2C, pay stubs, employer letters, SSA transcript, everything. It's worth the trip to get it resolved once and for all.

anyone else notice the verification process is way more intense this year? took me like 30 min to do all the steps 🤔

Congrats on getting through the verification! 🎉 From what I've seen, the 9 weeks is definitely the max timeframe - most people get their refunds much sooner, usually within 3-4 weeks after verification. Definitely get that IP PIN they suggested - it's free protection and will save you headaches next year. The fact that you got the "Verification is Complete" message is a great sign! Your return should start moving through the system now. Keep an eye on your transcripts and WMR tool, but try not to check obsessively (easier said than done, I know!). You're in the home stretch! 💪

I'm so sorry for your loss, Yara. This is such a difficult situation to navigate while you're already dealing with grief, and I can only imagine how overwhelming all the tax implications must feel on top of everything else. The advice everyone has given you here is spot-on - you absolutely must use the stepped-up basis (the fair market value on the date of your husband's death) rather than his original purchase price. I know it seems unfair that you can't claim the larger loss using what he actually paid, but Section 1014 of the tax code is very clear on this requirement for inherited assets. From a practical standpoint, I'd suggest taking these steps right away: **Contact your brokerage immediately** - Make sure they have these assets properly coded as inherited. If they've issued a 1099-B showing the original cost basis instead of the stepped-up basis, you'll need them to issue a corrected form. Most brokerages have specific procedures for this once you provide the death certificate and proof of inheritance. **Gather your date-of-death valuations** - You'll want the official NAV from that specific date. I'd recommend getting this from both your brokerage and cross-checking it with the fund company's website. Having multiple sources strengthens your documentation. **Consider professional help** - Given that you've received conflicting advice and this is your first time dealing with inherited investments, it might be worth consulting with a tax professional who specializes in estate matters. The complexity of inherited assets often has nuances that aren't immediately obvious. The silver lining is that even with the stepped-up basis, you still have a legitimate capital loss that can offset other gains and provide up to $3,000 in deductions against ordinary income this year, with any remaining losses carrying forward indefinitely. You're handling this exactly right by getting clarity before filing. That proactive approach will help ensure everything is done correctly and give you peace of mind during an already difficult time.

I'm so sorry for your loss, Yara. Losing a spouse is incredibly difficult, and having to navigate complex tax issues while grieving just adds to an already overwhelming situation. Everyone here has given you excellent advice about the stepped-up basis rule. You're absolutely required to use the fair market value on the date of your husband's death as your new cost basis, not what he originally paid. I know this feels counterintuitive since his original cost was higher, but IRC Section 1014 is very clear on this point for all inherited assets. One thing I wanted to add that might help with your peace of mind - even though you can't use the higher original basis, the stepped-up basis rule actually benefits most people who inherit assets. In your case it's working against you because the investments declined, but this same rule saves many families from huge capital gains taxes on appreciated assets. It's designed to prevent double taxation and provide a fresh start for inherited property. A few practical suggestions as you move forward: - Contact your brokerage immediately to ensure proper coding as inherited assets - Request official date-of-death valuations and keep detailed records - If you're still feeling uncertain given the conflicting advice you've received, a consultation with a tax professional specializing in inherited assets could provide valuable peace of mind The capital losses you're able to claim will still provide tax benefits through offsetting other gains and the $3,000 annual deduction against ordinary income, with unused amounts carrying forward indefinitely. You're asking all the right questions and handling this responsibly. That proactive approach will serve you well in getting through this difficult process.