Deductions on W2 Single

[ahmlet91]

Hi,

I'm looking at some serious costs that I'll be spending this year and should be looking at owing quite a bit and I was wondering what I can deduct. I am 32, currently going for my back to school for my bachelors degree (spending out of pocket for that), getting married, considering buying an EV, and traveling quite a bit for business that I am not compensated back for (paid up to the IRS limit per year). Comped W2, and after running through the withholding estimator tool, showing an estimated $25,000 owed. Any help here would be appreciated.

[xmasbaby0]

"getting married..."    If you get married by the end of 2023 your filing choices will be to file married filing jointly or married filing separately.   More details about that later.

"Back to school for bachelors degree..."

QUALIFIED EDUCATION EXPENSES

https

https://ttlc.intuit.com/questions/1899852-what-are-considered-qualified-education-expenses

https://ttlc.intuit.com/questions/2976047-what-are-examples-of-education-expenses

https://ttlc.intuit.com/questions/1901172-what-education-tax-credits-are-available      

https://www.irs.gov/help/ita/am-i-eligible-to-claim-an-education-credit

https://ttlc.intuit.com/questions/3262983-who-is-eligible-to-take-the-american-opportunity-tax-credi...

".. traveling quite a bit for business "

-W-2 employees cannot deduct job-related expenses on a federal return.  Job-related expenses were eliminated as a federal deduction for W-2 employees by the tax laws that changed for 2018 and beyond.  Your state tax laws might be different in AL, AR, CA, HI, MN, NY or PA.

https://ttlc.intuit.com/questions/4482873-which-federal-tax-deductions-have-been-suspended-by-tax-re...

"considering buying an EV,"

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-credits-deductions/electric-car-tax-...

If you were legally married at the end of 2023 your filing choices are married filing jointly or married filing separately.

Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $27,700 (+$1500 for each spouse 65 or older)  You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit. 

If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return. Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states:  AZ, CA, ID, LA, NV, NM, TX, WA, WI)

 If  you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice.

https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately

https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states

https://ttlc.intuit.com/questions/1894449-is-it-better-for-a-married-couple-to-file-jointly-or-separ...

[NCperson · Accepted solution]

@ahmlet91 - in summary

1) you would file Married - Filing Joint if you are married no later than 12/31/23.  The only other choice is FIling Separate, which is a bad deal, esp. since you have educational expenses which would not be eligible for a tax credit if you filing Separate.

2) you would be eligible for either the AOTC tax credit (likely - which is worth up to $2500 as long as your qualified educational expenses exceed $4000) or LLC tax cried (which is worth up to $2000 on up to $10,000 of qualified educational expenses)

3) as a W-2 employee, NONE of your business expenses are tax deductible.

4) if you buy a new EV, that is worth up to a $7500 tax credit, but that is limited to your tax liability. 

5) how much do you expect your income to be (include your spouse's income as well if you post) ? any chance you calculated to something incorrectly?  Use this website to estimate your taxes? Hard to beleive you could owe $25,000 in April and if so, you could be looking at interest penalties as well. 

https://www.dinkytown.net/java/1040-tax-calculator.html