I've been following this discussion with great interest since I'm dealing with the exact same overwithholding problem! After years of getting huge refunds (last year was $3,600), I finally realized I need to stop giving the IRS an interest-free loan. Based on all the excellent advice shared here, I'm planning to make two key changes: uncheck the "multiple jobs" box on my primary W4 since my freelance work is much smaller than my main job, and use Step 4(b) to add deductions using the calculation method several people mentioned (refund ÷ pay periods × 10). One question I have - for those who've made these changes, how long did it take for your employer to process the new W4 and reflect the changes in your paycheck? I'm eager to start seeing that extra money in my paychecks rather than waiting around for the government to return my own money next year! It's been so helpful reading everyone's real-world experiences and success stories. Sometimes you need to hear from actual people who've been through the same situation to feel confident about making these kinds of adjustments.

I've been dealing with this exact same frustration! After getting a $3,200 refund last year, I finally realized I was essentially giving the government a free loan while I could have been earning interest on that money myself. The breakthrough came when I understood that the "multiple jobs" checkbox is really meant for people with several jobs of similar income levels. Since my side work is only about 15% of my main job income, checking that box was causing massive overwithholding on my primary W4. Here's what I did based on similar advice: I unchecked "multiple jobs" on my main job W4 and used Step 4(b) to add about $1,200 in additional deductions (calculated by taking my $3,200 refund, dividing by 26 pay periods, then multiplying by 10). My very first paycheck after the change had an extra $123 that used to go straight to overwithholding! That's over $3,000 per year I now have access to instead of waiting for the IRS to return my own money. I was initially nervous about owing at tax time, but I figure even if I owe a few hundred dollars (as long as it's under $1,000 to avoid penalties), I'm still way better off having my money work for me throughout the year. Plus I can always fine-tune the adjustment if needed after seeing how this year plays out.

Fyi - I tried doing this with TurboTax last year and their software didn't properly support Form 8919. Ended up having to switch to TaxAct at the last minute. Glad to hear FreeTax USA supports it better!

I went through this exact situation two years ago and can confirm FreeTax USA does support Form 8919. Here's what worked for me: Log into FreeTax USA, go to the "Income" section, then look for "Other Income" or "Miscellaneous Income." There should be an option for "Uncollected Social Security and Medicare Tax" or you can search for "8919" directly in their help search. One important tip - make sure you have your employer's EIN handy when filling out the form. You'll also need to calculate the Social Security and Medicare taxes that should have been withheld (7.65% of your wages). The form will walk you through this calculation. For Form SS-8, as others mentioned, that's filed separately. You can download it directly from IRS.gov and mail it in. Don't wait on the SS-8 determination to file your taxes though - you can still file with Form 8919 using Code G while the determination is pending. Document everything now while it's fresh in your memory - work schedule requirements, equipment provided, training received, etc. This will be crucial for your SS-8 submission.

I just called FreeTaxUSA support about this exact issue. They told me there's a way to handle multiple localities even though the interface makes it seem impossible. After you enter your W-2 with the first locality, save it and go back to your W-2 list. Then click on "Edit" for that W-2, and you should see an option at the bottom for "Add another local tax withholding." It's super easy to miss, but it's there!

Great to see this got resolved! For anyone else dealing with similar multi-city tax situations, I'd also recommend double-checking your final tax calculations before submitting. Even when you enter multiple localities correctly in FreeTaxUSA, sometimes the software doesn't automatically apply available credits for taxes paid to multiple jurisdictions. I learned this the hard way last year - I was entitled to a credit for paying duplicate local taxes but had to manually add it in the "Other Credits" section. Your city tax departments (if you can reach them) or a local tax preparer can help verify if you qualify for any credits to avoid overpaying. The multiple locality feature in FreeTaxUSA works well once you find it, but it's definitely one of those hidden features that should be more prominent in the interface!

One thing that might help clarify the confusion here is understanding exactly where to look for your RSU income on your W-2. Many people miss this because it's not always obvious. Check Box 14 on your W-2 first - that's where many employers report RSU income separately with labels like "RSU", "STOCK", or "EQUITY COMP". If it's not there, the RSU income might be included in your regular wages in Box 1, which makes it harder to identify. The $56,150.60 from your RSU vesting should appear somewhere on your W-2 as ordinary income. This is crucial because when you report the sale of those 83 shares on your tax return, you need to make sure you're not paying tax on that income again. For the 83 shares that were sold to cover taxes, you'll report a small capital loss (about $204 as someone mentioned earlier). For your 137 remaining shares, your cost basis is $255.23 per share, and you won't owe any additional tax until you sell them. If you're still having trouble reconciling everything, consider using tax software that specifically handles equity compensation, or work with a tax professional who understands stock-based compensation. These situations are tricky enough that it's often worth getting expert help to make sure everything is reported correctly.

Based on everyone's helpful responses, it sounds like you've got the right understanding now! Just to add one more perspective from someone who went through this exact situation: The confusion with RSU taxation is super common because most people (including me initially) assume that if shares are sold, that's when you get taxed. But with RSUs, the taxation happens at vesting regardless of whether you keep or sell the shares. Think of it this way: on your vesting date, it's as if your employer handed you $56,150.60 in cash (which gets taxed as regular income), and then you immediately used that cash to buy 220 shares at $255.23 each. The fact that 83 shares were automatically sold to pay taxes doesn't change that fundamental transaction. One practical tip: when you do eventually sell those 137 shares you're holding, make sure to note on your tax return (or tell your tax preparer) that these are RSU shares where the compensation income was already reported in a prior year. This helps avoid any confusion if you ever get audited. Also, keep that release confirmation document you mentioned - it's great documentation showing the vesting details and will be helpful for your records. Good luck with the rest of your tax prep!

This is such a common frustration! I went through the exact same thing with my year-end bonus last month. The key thing to remember is that the high withholding you're seeing (that 40%) is just your employer being overly cautious - it's not the actual tax rate you'll pay on the bonus. Most employers use the "aggregate method" which treats your bonus like it's your regular weekly/monthly pay. So if you got a $10,000 bonus, they withhold as if you make that much every pay period all year long, which temporarily bumps you into a much higher tax bracket for withholding purposes. When you file your taxes, that bonus just gets added to your regular income and taxed at your normal marginal rates. So if you're truly in the 24% bracket, that's what you'll actually pay on the bonus income. The extra withholding becomes a nice refund! I know it stings to see so much taken out upfront, but think of it as forced savings that you'll get back with interest (well, without interest, but you get the idea). At least you won't owe anything come April!

I had the exact same shock when I got my bonus last year! Seeing nearly 40% disappear was heart-breaking, especially after working so hard to earn it. What helped me understand this better was learning that there are actually two different withholding methods employers can use for bonuses. The flat 22% rate you found in your research is one option, but most employers use the "aggregate method" instead. This method combines your bonus with your regular paycheck and calculates withholding as if that combined amount was your normal pay every period. So if you normally make $5,000 per month and get a $10,000 bonus, the payroll system calculates taxes as if you make $15,000 every month ($180,000 annually). That temporarily pushes you into higher withholding brackets, which is why you're seeing that 40% rate. The good news is that when you file your taxes, your bonus gets taxed exactly the same as your regular income - no special "bonus tax rate." It all goes into the same bucket and gets taxed according to your actual tax brackets. So you'll likely get a nice refund of that over-withholding! I know it doesn't make the initial sting any less painful, but at least you know you're not actually losing that money permanently.