Have you checked if your income composition changed? For example, if more of your income this year was from capital gains, dividends, or self-employment, it could be taxed differently than regular employment income. Line 16 tax comes straight from the tax tables based on your taxable income (Line 15), but Line 23 includes things like: - Self-employment tax - Unreported social security/Medicare tax - Additional tax on IRAs or retirement plans - Household employment taxes - Repayment of credits I'd bet something triggered one of these additional taxes this year that wasn't there last year.

I had a very similar situation last year where my taxable income was lower but I ended up owing taxes instead of getting a refund. The culprit turned out to be a combination of factors that weren't immediately obvious. First, definitely double-check that Box 12 parser issue you mentioned. I've seen parsers misread codes like "D" (401k contributions) as "DD" (employer-sponsored health coverage), which can dramatically affect your taxable income calculation. Second, when you changed jobs mid-year, did your new employer know about your previous year-to-date earnings? Often they don't, so they calculate withholding as if your new job salary is your only income for the entire year. This frequently results in under-withholding. Also check if you had any life changes that affected your tax situation: got married/divorced, had a child, moved states, or changed health insurance. Even small changes in pre-tax deductions like health insurance premiums or 401k contributions between employers can shift your taxable income enough to change your tax bracket. For Line 23, look specifically at whether you did any gig work, sold investments, or withdrew money from retirement accounts this year that you didn't do last year.

I went through something very similar last year with about $280 in unreported interest income. After reading all these responses, I ended up taking a hybrid approach - I documented everything thoroughly (copied my original return, the missing 1099-INT, and ran the calculation showing zero change in tax liability) and kept it all in a file. I didn't amend initially, but when I got the inevitable IRS letter about 8 months later noting the discrepancy, I was able to respond immediately with all the documentation showing that while I had indeed omitted the income, it resulted in no additional tax due. The IRS accepted my response and closed the matter with no penalties. The key thing I learned is that having your ducks in a row makes all the difference. Whether you choose to amend proactively or wait for them to contact you, make sure you can clearly demonstrate that you weren't trying to evade taxes and that the omission had no material impact on your tax liability.

This whole thread has been incredibly enlightening! I'm dealing with a similar situation but with about $180 in unreported 1099-INT income from 2023. After reading everyone's experiences, I feel much more confident about my options. What really stands out to me is how the IRS seems to handle these situations more reasonably than I expected - especially when there's no additional tax liability. The advice about documenting everything and being prepared to respond if they do send a notice makes total sense. I think I'm going to follow Sophia's hybrid approach - keep all my documentation ready showing that the omitted income doesn't change my tax liability, and if I get a CP2000 notice, I'll be prepared to respond quickly with all the supporting calculations. It seems like being proactive about documentation is the key, whether you amend immediately or wait to see if they contact you. Thanks everyone for sharing your real-world experiences with this issue. It's so much more helpful than just reading generic tax advice that doesn't account for the practical realities of how the IRS actually handles these smaller discrepancies.

Are you guys using the standard online tax calculators to figure this out? I've used the IRS withholding calculator and it still seems like my checks are way off from what it predicts.

I work in payroll and see this confusion all the time! Your paycheck withholdings are based on an annualized calculation - meaning your payroll system assumes you'll earn that same amount every pay period for the whole year. So when you have a big overtime week, it withholds taxes as if you'll make that inflated amount all year long. Here's a simple example: if your regular biweekly pay is $3,300 ($41.25 x 80 hours), your system calculates annual withholding based on $85,800/year. But if you work overtime and earn $5,000 in one check, it suddenly thinks you're making $130,000/year and withholds accordingly. The key thing to remember is that this is just withholding - not your actual tax liability. When you file your return, you'll likely get a refund for the overwithholding. To minimize this, you could adjust your W-4 to account for the extra withholding on overtime checks, but be careful not to underwithhold if your overtime isn't consistent. Bottom line: every overtime hour you work still puts more money in your pocket eventually, even if it doesn't feel like it on that particular paycheck.

Real estate agent here - I've helped dozens of clients through similar situations and can confirm this won't create any tax issues for you. Transfers between spouses are never taxable events, and consolidating funds for a home purchase is completely routine. That said, I'd strongly recommend calling both your bank and your husband's bank a few days before to let them know about the large transfer. Some banks automatically flag unusual activity patterns, and the last thing you want is a frozen account right before closing. Also consider asking your lender or title company about their preferred payment method. Many actually prefer wire transfers for large amounts since there's no risk of holds or processing delays like with cashier's checks. The wire fees are usually comparable to cashier's check fees, and you avoid the hassle of consolidating funds entirely. Just make sure you have all your documentation ready - bank statements showing the source of funds, transfer records, etc. Your lender will want to see a clear paper trail for underwriting purposes anyway.

Just went through this exact scenario six months ago! My wife and I consolidated our funds the same way for our closing - she transferred about $50k to my account so we could get one cashier's check instead of two. Zero tax implications whatsoever. The IRS doesn't care about money moving between spouses, and it's definitely not considered taxable income. We kept simple records (bank statements showing the transfer in and the cashier's check out) and our accountant confirmed we didn't need to report anything special on our tax return. The only "issue" we had was that my bank placed a 24-hour hold on the deposited funds even though it was a check from another major bank. A quick call to the branch manager got it released the same day once I explained it was for a home closing. Your plan is totally fine - just give your bank a heads up and maybe confirm there won't be any holds that could delay your timeline. Congratulations on the home purchase!

Has anyone dealt with reversing an RMD that got sent after someone died? My grandmother passed in October and her November RMD went through before we could stop it. Is there any way to put that money back into the IRA?

I'm dealing with a very similar situation right now with my father's estate. One thing I learned from our estate attorney is that you should also request documentation from the IRA custodian showing the exact date and time the RMD was processed, not just when it was deposited into the bank account. Sometimes there can be a delay between when the distribution is officially processed by the IRA custodian and when it hits the bank account. Also, if you haven't already, make sure to get certified copies of the death certificate to the IRA custodian as soon as possible. This officially notifies them of the death and should stop any future automatic distributions. Most custodians will also provide you with the necessary forms to establish inherited IRA accounts for you and your brother, which you'll need to handle future required distributions under the new beneficiary rules. The sooner you get this paperwork started, the easier it will be to sort out any post-death distributions that may have occurred.