I completely understand the confusion - I went through the same thing last year when my company switched to the new W4 system! The key thing to remember is that the new system is actually more precise, even though it feels more complicated. For your sister's situation with 3 kids under 5 making $52k, here's what I'd recommend starting with: 1. Put $6,000 on Line 3 (Child Tax Credit for 3 kids) 2. Leave Line 4(b) empty initially to be safe 3. Monitor her next few paychecks to see the change This conservative approach will still increase her take-home pay significantly without risking owing taxes. The $6,000 on Line 3 alone should reduce her withholding by about $230 per month. Once she sees how that affects her paychecks, she can always submit a new W4 later with additional adjustments on Line 4(b) if she wants to capture more of that projected $13k refund in her regular pay. It's better to adjust gradually than to risk a surprise tax bill! The beauty of the new system is you can update your W4 anytime during the year as your situation becomes clearer.

The new W4 system definitely takes some getting used to! I went through this same confusion when helping my daughter adjust hers last year. One thing that really helped us understand the system better was using the IRS's own withholding calculator at irs.gov/W4App. It's free and walks you through your specific situation step by step. For your sister's case, it will factor in her income, filing status, number of dependents, and estimated credits like EIC. The calculator will then tell you exactly what to put on each line of the W4 - no guesswork needed. It even shows you how your changes will affect each paycheck and your projected refund. Since your sister is getting such a large projected refund ($13k), the calculator might suggest putting amounts on both Line 3 (for child tax credits) AND Line 4(b) (for other adjustments). The key is that it does the math for you based on current tax law. I'd recommend running through the calculator together - it takes about 10-15 minutes and gives you confidence that you're making the right adjustments. You can always be conservative with the first adjustment and run the calculator again in a few months if needed.

Has anyone tried calling their payroll service directly? When I had this issue, my payroll provider (HomePay) actually gave me specific instructions for my tax software. They deal with this all the time and knew exactly which screens to navigate to. They even stayed on the phone with me while I entered everything to make sure it was done right.

I had this exact same problem with TurboTax last year! The key is finding the "Payments" section rather than trying to enter it in the Schedule H section. In TurboTax, after you complete Schedule H, go to the "Federal Taxes" tab and look for "Payments" or "Estimates and Other Payments." There should be an option for "Other payments made" or "Federal tax payments." Enter your social security and Medicare tax payments there with the dates you made them through your payroll service. The software will then credit these as payments toward your total tax liability. Make sure you have documentation from your payroll service showing the payment dates and amounts - you might need to attach a statement explaining these were household employment taxes paid through a payroll service. This worked perfectly for me and the software finally stopped saying I owed money I'd already paid!

One thing nobody's mentioned - if you think you might want to do a Roth conversion ladder in the future, you might want some of your money to be employee contributions. Employer contributions are always traditional (pre-tax), but employee contributions can be either traditional or Roth. Just something to think about for long-term planning.

This is such a common question for single-member LLCs! I went through this exact same decision process last year. Here's what I learned after consulting with both my CPA and a retirement plan specialist: The key insight is that as a single-member LLC, you're actually subject to self-employment tax (15.3%) on your net business income. Employee deferrals reduce your income tax but NOT the self-employment tax. Employer contributions reduce BOTH income tax AND self-employment tax. So if you're planning to contribute around $15k total this year, doing it all as employer contributions would likely save you more money overall - potentially an extra $2,295 in self-employment tax savings (15.3% of $15k). However, there's one timing consideration: employer contributions must be based on your actual net self-employment earnings for the year, and you can't contribute more than 25% of that amount. Employee deferrals give you more flexibility to contribute throughout the year regardless of how your business performs. My recommendation: if your business income is relatively predictable and you're confident you'll have enough net earnings to support the employer contribution percentage, go that route for maximum tax savings.

Have you considered just getting a small personal loan or using a credit card to cover the gap until your client pays? The penalties from the IRS might end up being more expensive than a short-term loan interest.

I can definitely understand the panic you're feeling right now! The good news is this is actually a pretty common situation and there are several ways to handle it. Your first step should be to try canceling the payment as soon as possible. If you used IRS Direct Pay, log back into the system with your confirmation number and look for the "Cancel Payment" option. You typically have until 11:59 PM ET two business days before the scheduled payment date to cancel online. If you used EFTPS (Electronic Federal Tax Payment System), you can cancel through that portal as well, usually up to 8 PM ET the business day before the scheduled payment. If you can't cancel online or it's too late, definitely call the IRS at 1-888-353-4537 (automated payment line) or 800-829-1040 (general line). Don't wait - it's much better to be proactive about this. Once you've dealt with the immediate payment issue, you have several options for actually paying what you owe: - Wait for your client payment and reschedule - Pay what you can now and set up an installment agreement for the rest - Use a credit card (there's a processing fee, but it might be less than IRS penalties) The IRS won't "flag" your account for proactively managing this situation. They deal with payment timing issues all the time, and they're generally reasonable when you communicate with them upfront rather than letting payments bounce.

@Ethan Clark I totally get your hesitation about questioning the refund - I felt the same way when this happened to me! But honestly, getting answers is worth it and won't cause problems. Since you mentioned gig work, here's what likely happened: many states now automatically cross-check your reported income against all the 1099-K and 1099-NEC forms they receive from platforms like Uber, DoorDash, etc. If there's even a small discrepancy, they'll adjust your refund without sending a notice first. A few quick things to check: • Log into your state's online tax portal - most now show detailed refund calculations • Look for any mail from your state tax department (adjustment notices sometimes come separately) • Check if they applied part of your refund to estimated taxes for next year • See if any business expenses were disallowed The fact that you didn't get a refund last year actually supports this theory - gig income reporting has gotten much stricter. But don't stress about calling them! You're entitled to understand exactly what adjustments were made. I'd recommend calling their taxpayer services line during off-peak hours (usually mid-week mornings work best). Getting clarity now will definitely help you file more accurately next year and avoid surprises. You've got this!

Hey @Ethan Clark! I totally understand your confusion and honestly, your cautious approach is smart, but don't let it stop you from getting the answers you need. As someone who's dealt with gig work taxes for years, I can tell you that state tax departments have definitely gotten more aggressive about automatic adjustments, especially for 1099 income. Here's what I'd do in your shoes: • First, check if your state has an online account portal - most do now and they often show a detailed breakdown of how they calculated your actual refund vs. what you claimed • Look through any mail you might have missed - sometimes adjustment notices get sent separately or even electronically • Don't be afraid to call! I know it sounds scary, but taxpayer services representatives deal with these questions all day and won't flag your account just for asking The most common culprits for gig workers are: - Income reporting mismatches (when your reported income doesn't exactly match what platforms sent to the state) - Business expense adjustments (states are scrutinizing these more closely) - Automatic application of refunds to estimated taxes for the following year Trust me, getting clarity now will save you headaches next year. You have every right to understand how your taxes were calculated, and asking questions is actually the responsible thing to do. The worst thing that can happen is they explain exactly what they did - which is what you want anyway!