I just want to echo what everyone else is saying here - you're definitely not in trouble! I had this exact same panic when I overpaid my 941 taxes by about $600 last year for my small photography business. What really helped me was understanding that the IRS computer systems are actually designed to handle these discrepancies automatically. When your W3 shows a lower liability than what you've already paid, their system flags it as an overpayment credit, not as an error or audit risk. From a practical standpoint, I'd strongly recommend going with the credit-to-future-quarters option rather than requesting a refund. I made the mistake of requesting a refund initially and waited 4 months to get my money back. Meanwhile, my friend who applied her overpayment as a credit had it processed in just a few weeks and didn't have to worry about making her next quarterly payment. The 941-X form is pretty straightforward - just include a brief explanation like "Calculation error resulted in overpayment of employment taxes" and you should be good to go. Keep copies of everything and don't stress about it! This happens to small business owners all the time, especially when we're trying to be extra careful with our calculations.

I completely understand your concern, but you can breathe easy! Overpaying your 940 and 941 taxes is actually a pretty common occurrence for small business owners, and the IRS handles these situations routinely without any red flags or penalties. When your W3 summary shows a lower amount than what you've already paid, the IRS will simply recognize this as an overpayment on your account. You have a couple of straightforward options to resolve this: 1. **Apply as credit to future quarters** (recommended): File Form 941-X and choose to apply the overpayment to your next quarter's tax liability. This typically processes in 3-4 weeks and means you won't need to make a full payment next quarter. 2. **Request a refund**: Also done through Form 941-X, but expect 8-12 weeks processing time (sometimes longer). For most small businesses, option 1 is the way to go - it's faster, helps with cash flow planning, and eliminates the uncertainty of waiting for a refund check. The key is to file the 941-X form promptly with a simple explanation like "overpayment due to calculation error." Keep good records of everything, but don't overthink it. The IRS much prefers overpayments to underpayments, and their systems are designed to handle exactly this type of situation. You're being responsible by catching and correcting this yourself!

I'd recommend attaching Form 433-F (Collection Information Statement) along with your 9465 if you're requesting a payment plan for a larger amount or if you can't afford what would normally be the minimum payment. This form shows your income, expenses, assets, and debts. It's extra paperwork but it helps prove to the IRS what you can actually afford to pay each month and increases your chances of getting approved for lower monthly payments if you're truly in a financial hardship situation.

One thing I wish someone had told me when I filled out my Form 9465 is to double-check your Social Security Number and the tax year you're requesting the installment agreement for. I made a simple typo in my SSN and it delayed my application by weeks while they tried to match it to my account. Also, if you're married filing jointly, make sure you're clear about whether both spouses are requesting the installment agreement or just one of you. This was confusing for me since my spouse and I file jointly but only I was responsible for the additional tax owed. The IRS website has a payment estimator tool that can help you figure out what monthly payment amount to propose, but honestly the explanations here about the 72-month rule and adding buffer for interest are really helpful. Good luck with your application!

3 Does anyone know if donating stuff instead of money makes any difference tax-wise? I have a bunch of clothes and furniture I could donate to Goodwill instead of giving cash to charities.

One thing to consider is using a donor-advised fund (DAF) if you're planning to give regularly. You can contribute a larger lump sum to the DAF in a year when you itemize (like if you have higher medical expenses or other deductions), get the immediate tax deduction, then distribute the funds to your chosen charities over multiple years. For example, you could contribute $3,000-4,000 to a DAF in a year when itemizing makes sense, then recommend grants of $1,300 annually to your preferred charities. This gives you more control over the timing of your tax deduction while still supporting the causes you care about consistently. Many brokerage firms like Fidelity, Vanguard, and Schwab offer DAFs with low minimum contributions and fees. Just another strategy to consider as your giving grows over time!

Dont forget about self-employment tax! Even with low income, you'll still owe the 15.3% SE tax on your profits. Proper expense categorization helps reduce your taxable income, so its worth getting right. And make sure you're tracking ANY business miles driven (to buy those yoga mats, to scope out teaching locations, etc) cause those are valuable deductions too!

Great point about self-employment tax! I'd also recommend setting up a dedicated business bank account if you haven't already - it makes tracking expenses SO much easier and looks more professional if you ever get audited. Even for a small yoga business, having clean separation between personal and business finances will save you headaches at tax time. For your yoga mats and blocks at $195 total, definitely treat those as supplies since they'll get worn out from regular use. And don't forget you can also deduct things like liability insurance for your classes, any yoga certification courses you take, and even a portion of your streaming subscriptions if you use them to play music during classes (just keep good records of the business vs personal use percentage). One more tip - if you're teaching at different locations, track your mileage between venues. Those miles add up quickly and can be a significant deduction!

Thanks everyone for the detailed responses! This is incredibly helpful. I've been checking sporadically throughout the day but clearly I need to adjust my strategy to those early morning hours. @Ethan Taylor - your documentation is amazing, that level of detail gives me confidence there's actually a predictable pattern here. I'll start checking consistently between 1-3am ET starting tonight. One follow-up question: once the transcript does update, how quickly do you typically see the actual refund hit your bank account? I'm hoping to time some bill payments around the deposit.

I've been tracking this for years and want to add some nuance to the excellent advice already shared. While the 12am-3am ET window is accurate, I've noticed that identity verification cases often follow a slightly different pattern. After verification, your transcript may show what's called a "processing hold" code (usually 570 or 971) before the actual refund information appears. This can add 1-2 additional processing cycles beyond the standard timeframe. Also, pro tip: if you're checking obsessively like most of us do, try using the mobile IRS2Go app in addition to the website - sometimes one updates before the other due to different caching systems. I've seen my app show updates up to 4 hours before the desktop site reflected the same information. The key is patience after verification - it's almost always longer than the standard processing time, but the refund does eventually come through.