I'm in a very similar situation and have been lurking on tax forums trying to figure this out! My husband and I both make around $125k each and we have two kids. We've been getting crushed with tax bills for three years straight despite trying to adjust our W4s multiple times. After reading through all these responses, I think I finally understand what we've been doing wrong. We've been claiming BOTH kids on BOTH of our W4s (so $4,000 total instead of just $4,000 once), and we never calculated the additional withholding for Step 4c because those worksheets looked so intimidating. I'm planning to fix our W4s this week - I'll claim both kids on my form only, and we'll use the multiple jobs worksheet to figure out how much extra to withhold. With our income levels, it sounds like we might need to add $700+ per pay period in additional withholding, which is going to hurt our monthly budget but is definitely better than owing $12,000+ every April! Has anyone else made the mistake of claiming their kids on both spouses' W4s? I'm curious how much of a difference fixing just that one error made to your tax situation.

I just went through this exact same situation last year and can definitely relate to the sticker shock at tax time! With both of you making around $120k, you're dealing with what's commonly called the "marriage penalty" where two high-income earners end up in higher tax brackets than the standard W4 withholding accounts for. Here's what I learned after owing a huge amount and having to fix our W4s: **Your Step 2 approach was correct** - both of you checking box C is the right move. **Step 3 is where you went wrong** - you should only claim the $2,000 child credit on ONE W4, not both. This alone probably cost you around $2,000 in under-withholding. **For Step 4c** - yes, you absolutely need to use those tables. The $575 per paycheck calculation sounds right for your income levels. You can split this between both W4s ($287.50 each) or put it all on one person's form - doesn't matter which approach you choose. One thing that really helped me was setting a calendar reminder to check our withholding mid-year using the IRS calculator. That way if we're still trending toward owing, we can adjust before it's too late. The reduced take-home pay from the extra withholding definitely stings at first, but it's so much better than getting hit with a massive tax bill and potential penalties. Good luck getting this sorted out!

I'm going through this exact same nightmare right now! Just downloaded my CSV from Robinhood after my own "brilliant" day trading experiment over the summer and felt that same panic when I saw hundreds of transactions that I have zero organized records for. Reading through everyone's experiences here has been incredibly helpful and reassuring - it's clear this is a much more common situation than I thought. Based on all the feedback, I'm definitely convinced that trying to handle this manually would be a disaster, especially with wash sale calculations. I'm planning to go with TaxAct Deluxe based on the recommendations here. The $25 price point is so much more reasonable than TurboTax Premier, and multiple people have confirmed it handles wash sales accurately and matches the 1099s perfectly. That gives me confidence it's the right approach. The tax-loss harvesting advice is something I really need to act on before December 31st. I'm still holding several positions that are down significantly from my trading spree, so strategically selling some of those losses could help offset my gains and reduce the tax hit. Thanks to everyone for sharing their experiences and making this feel manageable instead of completely hopeless. It's oddly comforting to know so many other people learned this record-keeping lesson the hard way! Definitely going to be much more organized with tracking trades going forward.

I'm in the exact same boat! Also went through a heavy trading phase earlier this year and completely neglected proper record keeping. Reading through everyone's experiences has been incredibly reassuring - it's clear this is a much more common situation than I initially thought. Based on all the advice here, I'm definitely going with one of the tax software solutions that can import the CSV directly rather than attempting manual calculations. The wash sale complexity alone sounds like it would take forever to figure out properly, and I'd probably still mess something up. I'm leaning toward TaxAct Deluxe after seeing multiple people confirm it handles wash sales correctly and matches the 1099s accurately, plus the $25 price point is much more reasonable than TurboTax Premier. The tax-loss harvesting deadline is something I really need to prioritize before December 31st. I'm also holding some positions that are underwater from my trading spree, so being able to use those losses to offset gains could really help with the tax situation. Thanks to everyone for sharing their experiences and making this feel so much more manageable! It's honestly comforting to know I'm not the only one who learned this record-keeping lesson the hard way. Definitely going to be much more organized going forward!

I'm new to this community and just went through this exact same situation last month! I had a 971 code dated August 15th and then an 846 code with August 22nd as my refund date. I was absolutely terrified that something was wrong, especially since I really needed that money for some emergency expenses. Reading through all these responses is bringing back memories of how stressed I was! But I'm happy to report that I got my refund exactly on the 846 date - August 22nd, just as promised. The notice (971) arrived in my mailbox about a week later and it was just informing me that they had corrected a small error on my return that actually worked in my favor. As a newcomer who's been through this, I can say with confidence that the pattern of 971 followed by 846 really does seem to be good news, not bad news. The fact that your 846 is dated after your 971 means they resolved whatever the notice was about and then approved your refund. September 9th should definitely be your day! This community has been such a great resource for understanding these confusing codes. Welcome to anyone else who's new here - the support and shared experiences really make all the difference when you're trying to decode IRS transcripts!

I'm completely new to this community and just discovered this thread while desperately trying to figure out what my transcript codes mean! I have the exact same situation - 971 code from last week followed by an 846 code with a refund date of September 15th. I've been absolutely panicking thinking something was wrong with my return. Reading through everyone's experiences here has been such a huge relief! It's incredible how helpful and supportive this community is. As a newcomer, I really appreciate how people are sharing their actual experiences rather than just guessing. The consensus that 971→846 is actually a GOOD pattern and not something to worry about is exactly what I needed to hear. Thank you to everyone who took the time to explain their situations - it makes such a difference for those of us who are new to decoding these mysterious IRS codes. This community is definitely going to be my go-to resource for tax questions going forward!

Great discussion so far! I've been using 529 plans as part of my wealth transfer strategy for about 5 years now, and I wanted to share a few practical lessons learned. One thing I wish I'd known earlier: the gift tax implications get tricky when you're funding multiple beneficiaries. You can do the 5-year front-loading election for each beneficiary separately, but you need to be strategic about timing if you're also making other gifts to family members in the same years. Also, regarding the "education dynasty trust" concept @Zoe mentioned - we actually structured ours a bit differently. Instead of relying on succession planning through wills, we set up a family LLC that owns the 529 plans. The LLC operating agreement includes provisions about how the 529s should be managed across generations. It's not bulletproof, but it creates more structure than just hoping future generations follow your wishes. One unexpected benefit: having the 529s has actually encouraged my adult kids to go back to school for additional certifications and degrees, knowing the funds are there. So even beyond wealth transfer, it's created educational opportunities we hadn't originally planned for.

I've been exploring 529 plans for wealth transfer too, and one aspect that hasn't been fully covered is the impact on financial aid eligibility - it's more nuanced than most people realize. Parent-owned 529 plans are assessed at only 5.64% in the FAFSA formula, which is pretty favorable compared to other assets. But here's where it gets interesting for multi-generational planning: if grandparents own the 529, it doesn't count as a student or parent asset at all on the FAFSA. However, any distributions from grandparent-owned 529s count as untaxed income to the student, which can reduce aid eligibility by up to 50% of the distribution amount. The strategy some families use is having grandparents fund the 529 but transferring ownership to parents before the student's junior year of high school (since FAFSA looks at prior-prior year income). This way you get the best of both worlds - the grandparent funding doesn't impact early FAFSA calculations, but you avoid the distribution penalty in the crucial aid years. Also worth noting: if you're using 529s for K-12 expenses (up to $10,000 annually), this doesn't generate a 1099-Q, so it won't show up as income on financial aid applications. Could be useful for families with younger kids who want to preserve aid eligibility for college later.

I've been through this exact situation! Got a CP2000 for missing 1099 income that I swear I never received. Here's what worked for me: First, don't stress too much - CP2000s are actually pretty straightforward once you understand what they're asking for. The IRS just wants to reconcile their records with yours. I started by calling the company that allegedly sent the 1099. Turns out they had my old address on file, so the form got mailed to an apartment I hadn't lived in for over a year. They were able to email me a copy immediately, and I could see exactly what income they reported. Since I did actually earn that money (just never got the tax form), I had to agree with the IRS assessment. But here's the key - you can set up a payment plan if you can't afford to pay the full amount at once. I called the IRS (took forever to get through, wish I'd known about that Claimyr service back then!) and set up monthly payments with no issues. The whole thing was resolved in about 6 weeks from start to finish. Way less scary than I thought it would be. Just make sure you respond before the deadline - that's super important!

I've been reading through all these responses and they're super helpful! I'm definitely feeling more confident about handling this CP2000 myself instead of jumping straight into paying for audit defense services. Based on everyone's advice, here's my action plan: 1. Contact the company that issued the 1099 to get a copy (I'm pretty sure they have my old address too) 2. Gather any bank records showing deposits from that work 3. Respond to the IRS within the 30-day window The tools mentioned here like taxr.ai for document analysis and Claimyr for actually reaching the IRS sound way more cost-effective than Tax Protection Plus, especially for what seems to be a relatively straightforward income matching issue. Thanks to everyone who shared their experiences - you've all saved me from potentially overpaying for services I probably don't need! I'll update this thread once I get through the process in case it helps other people in similar situations.