I've run into this same issue before and it's incredibly frustrating! From my experience, the difference usually comes down to how each calculator handles specific tax situations that might not be immediately obvious. The IRS Withholding Estimator is designed to give you a quick estimate for withholding purposes, but it doesn't always account for all the nuances that come up during actual tax preparation. For example, it might handle things like retirement account contributions, health savings account deductions, or certain tax credits differently than the more comprehensive algorithms used by TurboTax and HR Block. Since both TurboTax and HR Block are giving you the same result, I'd be inclined to trust that number. These companies have a strong incentive to be accurate since people use their calculations to make important financial decisions. One thing you could try is looking at your actual tax liability from last year's return and seeing which calculator's methodology seems more consistent with how your taxes were actually calculated. That might give you a better sense of which tool is more reliable for your specific tax situation.

As someone new to this community, I'm dealing with this exact same frustrating situation! I've been going back and forth between the IRS calculator and TurboTax for weeks trying to figure out my tax situation. What's been helpful for me is understanding that these tools serve slightly different purposes. The IRS Withholding Estimator is really designed to help you adjust your W-4 for future withholdings, while TurboTax and HR Block are built to mirror the actual tax filing process as closely as possible. I ended up calling a tax professional friend who explained that the commercial software tends to be more conservative and comprehensive because they're trying to avoid giving people unpleasant surprises when they actually file. The IRS tool uses more generalized calculations that work well for withholding estimates but might miss some of the nuances that show up on your actual return. Given that both TurboTax and HR Block are giving you the same higher number, I'd personally plan for that scenario. It's better to be prepared for owing money and be pleasantly surprised by a refund than the other way around. Plus, when you actually file with IRS Free File, you'll get the definitive answer anyway.

Document everything! I went through a similar Workday implementation disaster at my federal agency job. Here's what I wish I'd done from day one: 1. Save every paystub showing the missing federal withholding 2. Get written confirmation from HR/payroll about the system issue (email works) 3. Document every conversation about this problem with dates and names The key thing people aren't mentioning is that you should immediately start making quarterly estimated tax payments to avoid the underpayment penalty. Even if your employer eventually fixes this, you're already 7 months behind. Use Form 1040ES and make payments for Q3 and Q4 at minimum. Also, push your HR department hard on this. Seven months is way too long for a "system issue" - at this point they should be manually calculating and withholding the correct amounts even if Workday can't do it automatically. I'd escalate this to your union rep if you have one, or consider filing a complaint with your state's department of labor. The silver lining is that employer payroll failures like this are exactly the kind of situation where the IRS will often grant penalty relief, especially with good documentation showing it wasn't your fault.

This is a frustrating situation that unfortunately more government agencies are experiencing with Workday implementations. As someone who works in tax compliance, I'd recommend taking immediate action on multiple fronts: First, calculate your federal tax shortfall using your most recent paystub. Take your gross pay, subtract pre-tax deductions, then multiply by your effective tax rate (you can estimate this from last year's return). This will give you a rough idea of what should have been withheld. Second, file Form 4868 when tax season comes if you need more time to gather funds - this gives you an extension to file and can help avoid failure-to-file penalties even if you still owe. Third, consider approaching this collectively with other affected employees. When multiple people are impacted by the same system failure, agencies are more likely to find solutions quickly. You might also want to contact your state's ombudsman office if you're a state employee - they often have more leverage with agencies than individual complaints. The good news is that the IRS has several penalty relief programs specifically for situations like this where the taxpayer made good faith efforts but was prevented from proper compliance due to circumstances beyond their control. Just make sure you're documenting everything and taking proactive steps now rather than waiting until tax time.

This thread has been incredibly informative! As someone who's also navigating high-income tax planning for the first time, I wanted to add one more consideration that might help others in similar situations. If you're using tax software to estimate your liability, make sure it's properly calculating the Additional Medicare Tax based on Medicare wages (Box 5 of your W-2) and not just using your AGI. I made this mistake initially when trying to project my 2024 taxes and was getting confused results. Also, for those mentioning bonus deferrals - check if your employer allows you to defer into a non-qualified deferred compensation plan rather than just delaying payment to the next calendar year. While this doesn't help with the immediate Medicare tax threshold, it can provide more flexibility for long-term tax planning if you expect to be in a lower tax bracket in future years. The collective wisdom in this thread about threshold management, equity compensation timing, and pre-tax benefit optimization is exactly the kind of practical guidance that's hard to find elsewhere. Thanks to everyone for sharing their real-world experiences!

This has been an absolutely fantastic thread - I've learned more about the Additional Medicare Tax in these comments than from hours of searching IRS publications! Just to summarize the key takeaways for anyone else in a similar situation: 1. The 0.9% Additional Medicare Tax is based on Medicare wages (Box 5 of W-2), not AGI or taxable income 2. Thresholds are $200k single/$250k married filing jointly/$125k married filing separately 3. The tax only applies to amounts OVER the threshold, not the full income 4. For married couples, filing jointly uses the combined income threshold 5. Employer withholding starts at $200k regardless of filing status, so you might get refunds if under joint threshold 6. Bonus deferral strategies can help manage threshold timing 7. Most pre-tax deductions (401k, health insurance) don't reduce Medicare wages, but a few like transportation benefits do 8. Equity compensation (RSUs, stock options) counts toward Medicare wages and can be harder to time 9. Setting aside money for potential additional tax is smart planning even if you think you'll stay under For those mentioning the various tax tools and services - it's great to see real user experiences rather than just theoretical advice. The complexity of these calculations really makes professional guidance or specialized tools worthwhile when you're close to these thresholds. Thanks to everyone who shared their experiences and strategies!

Yes, FreeTaxUSA absolutely saves your progress! I've been using it for the past two years and it's been really reliable about auto-saving everything as you work through each section. Just make sure you create an account and log in before you start entering information - that's the key step. Once you're logged in, it saves automatically after each page or section you complete. You can safely close your browser or log out whenever you need to, and when you come back everything will be exactly where you left it. I actually do the same thing you're planning every year - I start early and then add documents as they arrive throughout tax season. Last year I probably logged in and out at least 5-6 times over a couple weeks as I got various forms in the mail, and never had any issues with lost data. When you log back in, you'll see your return on the dashboard with a progress indicator showing how much you've completed. It makes it really easy to see what sections are done and what still needs your attention. Much better experience than trying to do everything in one marathon session! You're making a smart move switching from TurboTax - the functionality is essentially the same but you'll save a ton of money.

Yes, FreeTaxUSA definitely saves your progress! I've been using it for three years now and it's one of the most reliable features. As long as you create an account and stay logged in while entering your information, it automatically saves everything as you complete each section. I do exactly what you're planning every tax season - start early and then add documents as they come in. Last year I worked on my return over about two weeks, logging in and out probably 8-10 times as various 1099s and other forms arrived in the mail. Never lost a single piece of data. When you log back in, your return will show up on your main dashboard with a completion status (like "In Progress - 45% Complete") so you can easily see where you left off. The interface is really intuitive about showing which sections are finished and which ones still need attention. One small tip: make sure you're actually signed into your account before you start entering information. The system will let you work as a "guest" but then won't save anything. As long as you see your name in the top right corner of the screen, you're good to go! Don't stress about having to rush - take your time and add the missing documents when they arrive. You made a great choice switching from TurboTax!

Unfortunately, there aren't many ways to spread out the gain from selling a single asset like your classic car over multiple years. The sale is treated as occurring in the tax year when the transaction closes, so the entire gain gets recognized at once. However, there are a few strategies you might consider: 1. **Installment sale method** - If the buyer is willing, you could structure the sale to receive payments over multiple years (like $50K this year, $45K next year). This would spread the gain recognition across tax years, but it does come with risks if the buyer defaults. 2. **Like-kind exchange (Section 1031)** - This generally doesn't apply to personal-use vehicles, but if you could argue the car was held for investment purposes (which might be difficult given it was a hobby project), you could potentially defer gains by exchanging into another qualifying asset. 3. **Charitable strategies** - If you're charitably inclined, you could donate a portion of the car's value to charity and sell the remainder, though this gets quite complex. For California specifically, yes, you're looking at some of the highest combined capital gains rates in the country. The timing strategy of waiting until January could be very beneficial if either of your incomes will be significantly lower next year. Also consider whether you have any capital losses to harvest from other investments before year-end to offset some of the gain. Given the complexity with state taxes, Medicare impacts, and the significant dollar amounts involved, a consultation with a tax professional who handles high-value personal property sales would definitely be money well spent before you commit to the sale.

Welcome to the community, Fatima! Great questions that really add to this discussion. For the installment sale method, yes, you'd need formal documentation even for something as "simple" as two payments. The IRS requires written agreements specifying payment terms, interest rates (using applicable federal rates), and what happens if payments are missed. You'd also need to calculate the gross profit percentage and recognize gain proportionally with each payment received. It's definitely not a casual arrangement - both parties need to understand the legal and tax obligations. Regarding the charitable donation strategy - you're absolutely right that donating to a qualified automotive museum or educational charity could provide a significant tax deduction based on fair market value. However, there are some important limitations: for non-cash donations over $5,000, you need a qualified appraisal, and deductions over $500,000 require additional IRS approval. Plus, if your adjusted gross income isn't high enough, you might not be able to use the full deduction in one year (though you can carry forward unused portions for up to five years). The key consideration is whether Ava and her husband need the cash now versus the potential tax savings over time. Given they mentioned wanting to pay down their mortgage, the immediate cash might be more valuable than the deduction benefits. One thing I'd add for anyone in this situation - document EVERYTHING about your restoration process going forward. Take photos, keep receipts, maintain a restoration log. Future you will thank present you for the organization when tax time comes!