Great question! You're absolutely right to be concerned about underwithholding with multiple jobs. I went through something similar last year and learned the hard way that each employer withholds taxes assuming they're your only income source. For your specific situation, I'd definitely recommend: 1. **For your W-2 jobs**: Update your W-4 forms and check the "multiple jobs" box in Step 2. This will increase your withholding rate to account for your higher total income. 2. **For your contract position**: Set aside 25-30% of that income immediately. You'll owe both regular income tax AND self-employment tax (15.3%) on this income since no taxes are being withheld. 3. **Consider quarterly payments**: Since you're earning $1,920/month from your contract work (assuming 20 hours × $24), you'll likely need to make quarterly estimated payments to avoid underpayment penalties. The IRS withholding estimator tool is really helpful for calculating exactly how much extra to withhold or pay quarterly. Also, keep detailed records of all your income and any business expenses related to your contract work - those expenses can reduce your taxable income. Better to overpay slightly and get a small refund than to owe thousands plus penalties!

You're definitely smart to think ahead about this! I was in a very similar situation a couple years ago with multiple W-2 jobs plus freelance work, and I ended up owing about $2,800 at tax time because I didn't plan properly. Here's what I wish I had done from the start: **For your W-2 jobs:** Fill out new W-4 forms with both employers and check the "multiple jobs" box in Step 2. This tells them to withhold at a higher rate. You can also request additional withholding on line 4(c) if needed. **For your contract work:** This is where you need to be most careful. Set aside 30% of every contract payment immediately - don't touch that money! Contract work means you're paying both the employer and employee portions of Social Security and Medicare taxes (15.3% total) PLUS regular income tax. **Track everything:** Keep detailed records of all income and any business expenses related to your contract position. Things like mileage, supplies, home office space, etc. can reduce your taxable contract income. The IRS withholding estimator is your best friend here - plug in your expected income from all three sources and it'll tell you exactly how much you should be setting aside or having withheld. Since you're making good money from multiple sources, you'll likely need to make quarterly estimated payments to avoid underpayment penalties. Better to be safe than sorry!

One thing nobody's mentioned is how this affects your ability to claim the Child Tax Credit if you have kids. If you use the FEIE, you can't claim the refundable portion of the CTC on the excluded income. So if you have children, you might actually be better off with the FTC in some cases. For example, I live in France with 2 kids and about €70,000 in income, plus some US dividends. When I ran the numbers, the additional Child Tax Credit I could claim using FTC outweighed the tax savings from the partial FEIE strategy. Has anyone else with children done detailed calculations on this? Would be interested to see if this holds true across different income levels and number of dependents.

This is such a valuable discussion! I'm a US citizen living in Australia and have been struggling with this exact decision. Reading through everyone's experiences, I'm realizing I need to factor in more variables than I initially thought. @Emily Nguyen-Smith and @James Johnson - your point about the Child Tax Credit is huge. I have one child and was leaning toward the partial FEIE strategy, but now I'm wondering if I should stick with FTC to preserve my ability to claim the full CTC. One question for the group: has anyone dealt with superannuation (retirement contributions) in Australia and how that interacts with these strategies? My employer contributes about AUD $8,000 annually to my super, and I'm not sure how that affects the foreign earned income calculation for FEIE purposes. Also wondering about the interaction with the Additional Child Tax Credit - if I use partial FEIE and keep some earned income for Roth IRA eligibility, does that preserved earned income count toward the ACTC calculation even though the rest is excluded? This thread has been incredibly helpful - it's clear there's no one-size-fits-all answer and the optimal strategy really depends on your specific situation including state taxes, number of dependents, and foreign tax rates.

Be super careful with any ERC filing right now! The IRS announced last month they're auditing these claims like crazy because of all the fraud. My brother's construction company used one of those "ERC specialists" that advertise everywhere, paid them 25% of the expected refund, and now he's under audit and might have to pay everything back WITH penalties. Make sure whoever helps you is looking at real eligibility, not just trying to get you to file. The rules are complicated - it's not just "did you stay open during the pandemic.

As someone who just went through this process for my small retail store, I'd strongly recommend getting a second opinion before committing to any of those fee structures you mentioned. The 30% contingency fee is definitely excessive, and the $8,000 upfront seems way too high for a 14-employee restaurant. What worked for me was first using a service to verify eligibility before paying anyone big fees. I spent about $200 to get a detailed analysis of whether we actually qualified, which saved me from potentially wasting thousands on a claim that might not hold up. Once I knew we legitimately qualified, I worked with a local CPA who charged a flat $2,800 fee to prepare and file everything. The key is making sure you have solid documentation showing how government orders specifically impacted your restaurant operations. Indoor dining restrictions would likely qualify you under the "partial suspension" test, but you need to document exactly which orders affected you and when. Don't rush into anything - the IRS is being very strict about ERC claims right now, so getting it right the first time is crucial.

Banks also look for unusual deposit patterns compared to your history. If you suddenly start making cash deposits when you normally don't, that might trigger questions regardless of the amount. My friend runs a legit dog grooming biz and started taking cash instead of venmo, and the bank actually asked her about the change in deposit patterns!

Great question! Just to add to what others have said - the key is being natural and consistent with your deposits. Since you mentioned this is from photography work, I'd suggest keeping good records of your jobs and payments. If you're getting paid $2k for a wedding shoot, just deposit that $2k when you get it. Don't try to split it up or hold onto cash to avoid any thresholds. The IRS cares way more about whether you're reporting the income on your taxes than about the specific deposit amounts. As long as you're documenting your photography income and paying taxes on it, you're doing everything right. Banks are looking for people who are obviously trying to game the system, not legitimate small business owners just depositing their earnings. One practical tip: consider opening a separate business account for your photography income if you haven't already. It makes tracking everything much easier and looks more professional if there are ever any questions.

This thread has been incredibly helpful! I'm in a similar situation where my grandmother wants to help with my graduate program costs. Based on what everyone's shared, it sounds like the key takeaway is that direct payments to educational institutions for qualified tuition and required fees are completely exempt from gift tax limits, while any money given directly to the student counts toward the annual $20k exclusion. One thing I'm curious about - does anyone know if this exemption applies to graduate school tuition as well, or is it specifically for undergraduate education? My program is quite expensive and my grandmother is concerned about potential tax implications if she helps with multiple semesters. From what I'm reading here, it sounds like the exemption should apply regardless of the level of education, but I want to make sure before she commits to helping. Also, the advice about keeping detailed records and understanding exactly which fees qualify is really valuable. I'll definitely check with my school's financial office to clarify which charges on my bill would be considered "required for enrollment" versus optional services.

Thank you all for this incredibly thorough discussion! As someone new to navigating these tax implications, I really appreciate how clearly everyone has explained the distinction between direct tuition payments (unlimited exemption) and regular gifts (subject to annual limits). I've been following along because my aunt recently offered to help with my education expenses, and I was completely unaware of the strategic advantage of having her pay the school directly versus giving me the money to pay myself. The fact that she could potentially cover my entire tuition bill without any gift tax consequences is amazing! A few quick questions based on what I've learned here: Does the timing of these payments matter at all for tax purposes? For example, if my aunt pays for both fall and spring semester tuition in the same calendar year, is that still fully exempt? And does it matter if the payment is made before the semester starts versus during the semester? Also, I noticed someone mentioned keeping documentation - would a simple receipt or confirmation from the school's payment portal be sufficient, or should there be more formal documentation that explicitly states the payment was for qualified tuition and fees? This community has been so helpful in breaking down these complex tax rules into understandable guidance!