One important thing to consider with multi-state internships is the timing of your tax payments. Since you'll have income from both California and New York, you might want to make estimated quarterly tax payments to avoid any underpayment penalties, especially if your withholding isn't quite right. California has pretty aggressive estimated tax requirements, and if you're going to owe more than $500 at filing time, they expect quarterly payments. New York is similar but with a $300 threshold. Given your income levels, this could definitely apply to you. Also, don't forget about Social Security and Medicare taxes - those will be withheld at 7.65% regardless of your filing status or dependency situation. Unlike income taxes, you won't get these back as a refund, so factor that into your budget planning. The good news is that with your internship schedule, you'll likely have a few months at the end of the year with no income, which should help with cash flow for any tax payments you need to make.

Just to add another perspective - don't forget about the potential for additional state-specific deductions that might apply to your situation! Since you're working in both California and New York as a temporary worker, you might qualify for some deductions that regular residents wouldn't get. For example, California allows deductions for certain professional expenses related to temporary work assignments. New York has some provisions for non-residents who are working temporarily in the state. These vary year to year, but it's worth investigating since your tax situation is more complex than a typical single-state internship. Also, one thing that caught my attention - you mentioned your parents will claim you as a dependent. Make sure to coordinate with them on this! If you're providing more than half of your own support with your internship income (which you very well might be with $65k), you might not qualify to be claimed as a dependent anymore. This could actually work in your favor since you'd get the full standard deduction instead of the limited dependent deduction. It might be worth running the numbers both ways - being claimed as a dependent vs. filing independently - to see which results in less total tax burden for your family overall.

I just went through this exact situation this past tax season and wanted to share my experience. Like you, I received several W-2Gs throughout the year but was net negative overall from my casino visits. The most important thing I learned is that the win/loss statement is NOT what determines your tax liability - it's purely supporting documentation. You must report every dollar from your W-2Gs as income, period. The IRS already has copies of those forms, so there's no way around it. Here's what really helped me: I calculated whether itemizing my deductions (including gambling losses) would be more beneficial than taking the standard deduction. In my case, I had mortgage interest and charitable donations that, combined with my gambling losses, pushed me well over the standard deduction threshold. This allowed me to offset my gambling winnings with my losses. However, if you don't have enough other itemized deductions, you could end up in the unfortunate situation of paying taxes on winnings while being unable to deduct your losses. This is why keeping detailed session logs throughout the year is crucial - not just for substantiating your losses, but for making informed decisions about your gambling activity from a tax perspective. My advice: Start keeping meticulous records now for next year, and definitely consult with a tax professional who understands gambling taxes. The rules are more complex than most people realize.

I went through this exact same confusion when I started gambling more frequently and getting W-2Gs. The biggest misconception I had was thinking the win/loss statement somehow "netted out" my taxes - it doesn't work that way at all. Here's the reality: Every W-2G you received must be reported as income on your tax return, even if you're down overall for the year. The IRS already has copies of those forms, so they know about every jackpot you hit. Your win/loss statement showing you're down $3,800 doesn't change the fact that you still have taxable income from those W-2Gs. The good news is you can potentially deduct your gambling losses, but only if you itemize deductions on Schedule A, and only up to the amount of your gambling winnings. So if your W-2Gs total $2,000 and you lost $3,800 overall, you can deduct up to $2,000 in losses - but only if itemizing makes sense for your overall tax situation. This is where it gets tricky for casual gamblers. If your total itemized deductions (including gambling losses, mortgage interest, charitable donations, etc.) don't exceed the standard deduction, you're better off taking the standard deduction. But that means you pay tax on your gambling winnings with no offset for losses. My advice: Add up all your potential itemized deductions first to see if it's worth it, and definitely start keeping detailed session logs going forward. The win/loss statement helps, but the IRS wants to see your own contemporaneous records of each gambling session.

The IRS Authentication Protocol for in-person verification requires biographic verification (your ID) and residential verification (proof of address). The standard procedure allows for documentation discrepancies if you can provide supplementary evidence. A utility bill, bank statement, or lease agreement with your current address should suffice as secondary verification. The verification threshold is typically met with two concordant documents, even if your primary ID shows a different address.

I went through this exact situation in January 2024! My driver's license showed my old college address but I filed my return with my current work address. The verification agent was completely understanding - they see this all the time, especially with young professionals who move frequently. I brought my lease agreement, two utility bills, and a bank statement all showing my current address. The agent barely blinked at the mismatch and said "happens every day." The whole appointment took maybe 20 minutes. One tip: organize your documents beforehand in a folder - it shows you're prepared and makes the process smoother. Don't stress about this, you'll be fine!

I went through something very similar when I switched jobs mid-year and my new employer somehow set up my withholding incorrectly. The good news is that with 2 kids under 10, you have some solid tax credits working in your favor. The Child Tax Credit alone could give you up to $4,000 ($2,000 per child), and depending on your income level, a significant portion of that can be refundable even if you paid zero in withholding. The Earned Income Tax Credit could also apply if your income falls within certain ranges - with 2 qualifying children, this can be worth thousands more. Your health issues might also qualify you to file as Head of Household, which has better tax brackets and a higher standard deduction. I'd definitely recommend running your numbers through some tax software to get a realistic picture, but don't panic - families with dependents often come out better than they expect, even with withholding issues.

The EITC income limits for 2023 (filing in 2024) with 2 qualifying children are pretty generous - you can earn up to about $50,594 if filing single or $56,844 if married filing jointly and still get some credit. The maximum EITC with 2 kids is $6,164, which phases out as your income increases. Combined with the Child Tax Credit, you could potentially see a substantial refund even with zero withholding. Just make sure your kids meet the qualifying child requirements (age, relationship, residency tests) and that they have valid Social Security Numbers. Also, definitely fix your W-4 going forward to avoid potential underpayment penalties next year. Your situation with health issues and being the primary caregiver for 2 young kids sounds like it would qualify you for Head of Household status, which would give you even better tax treatment.

I was in your exact position last year! Went with forming my own business (LLC taxed as S-Corp) rather than taking the 1099 contractor role and the tax savings have been significant. Two HUGE things to know: 1) Health insurance - as an S-Corp owner, you can have your business pay for your health insurance (it's deductible for the business) but you have to report it as income on your W-2. Still better than paying with post-tax dollars! 2) Home office deduction is a PAIN to calculate but worth it. If you go S-Corp route you need to have an "accountable plan" to reimburse yourself for the home office. Making estimated quarterly tax payments is annoying but once you get systems in place its not too bad. Good luck!

Great question! I faced a similar decision two years ago and went with the small business route. Here's what I learned that might help: The $20k income difference you're projecting might actually be smaller when you factor in taxes. As a 1099 contractor at $85k, you'd pay self-employment tax on the full amount. With your own business, you have more flexibility with business expenses that can reduce your taxable income. One major consideration: client diversification. That $85k contract sounds great until it ends. I started my freelance business at $68k first year but by year two I was at $95k with multiple clients. The security of diverse income streams has been worth more than the initial pay cut. Don't forget about business credit building - having your own business lets you establish business credit separate from personal, which can be valuable for future growth and equipment purchases. My recommendation: if you're confident in your marketing skills and have some initial clients lined up, the business route gives you more long-term upside and tax flexibility. The 1099 role could be a good stepping stone to build skills and save up before launching your own thing.