One important detail that hasn't been mentioned yet - since you're starting a new job in November 2024, make sure to account for any withholding that already happened earlier this year from your previous employer. The W4 calculator assumes you're working the full year at that salary level. If you had a different job earlier in 2024 with different withholding amounts, you'll need to manually adjust the calculator inputs to reflect your actual year-to-date withholding and income. Otherwise, you might end up over-withholding for the remaining paychecks. Also, for your $15k side gig income - if this is 1099 work, remember you'll also owe self-employment tax (Social Security and Medicare) on that income, which is about 15.3%. The withholding calculator accounts for income tax on that $15k, but not the additional self-employment tax. You might need to withhold even more than the calculator suggests, or make quarterly estimated payments to cover that SE tax portion.

Adding to the excellent points about self-employment tax - there's another consideration for your W4 withholding that might help explain the difference between 2024 and 2025 calculations. The IRS withholding calculator for 2025 is likely factoring in the scheduled expiration of several TCJA provisions, including changes to the child tax credit, earned income tax credit, and other credits that could affect your overall tax liability. This might be why you're seeing a lower additional withholding recommendation for 2025 ($180 vs $250). However, since you mentioned owing $1,200 last year, I'd strongly recommend being conservative with your withholding. Consider using the higher 2024 amount ($250) even when you switch to 2025 calculations next year, at least until we have more clarity on what tax legislation Congress will actually pass. For your immediate situation starting in November, you'll definitely want to increase that per-paycheck withholding significantly since you'll only have a few paychecks left in 2024. You might also want to consider making a fourth-quarter estimated payment in January 2025 to cover any shortfall from your side gig income, especially the self-employment tax portion that others mentioned.

Don't forget to call the IRS after sending important faxes to confirm they received them! I learned this the hard way when I faxed my offer in compromise docs and assumed they got them, only to find out 2 months later they had no record of receiving anything. Now I always follow up with a call about a week after sending anything critical.

Great advice from everyone here! I'd also add that if you're sending time-sensitive documents like amended returns or payment agreements, consider sending them through multiple channels (fax AND certified mail) for extra security. I've had situations where the IRS received one but not the other, and having both methods gave me backup proof of timely filing. Also, always keep your fax confirmation receipts - I scan mine and save them digitally with my tax files. The IRS can be slow to update their systems, so even if they received your fax, it might not show up in their records for several weeks when you call to check. One more tip: if you're faxing forms that require signatures, make sure your signatures are dark and clear on the scanned document. Light or blurry signatures can cause processing delays.

Thank you all for this incredibly helpful discussion! As someone new to navigating grad school finances, this has been so educational. I really appreciate everyone sharing their experiences and tools. A couple follow-up questions based on what I've learned here: 1. Since my son will be getting a W-2 for his research assistant position, should we expect any federal or state taxes to already be withheld from his stipend payments, or will he need to make quarterly estimated payments? 2. For the record-keeping that several people mentioned - what specific documents should we be sure to save beyond the W-2? Should we request something in writing from the university specifically documenting the tuition waiver amount and its tax-free status? 3. His program is 5 years, so we want to make sure we're setting him up for success long-term. Are there any common mistakes grad students make in years 2-5 that we should be aware of now? This community has been amazing - I feel so much more confident about helping him navigate this properly now. The tools mentioned (taxr.ai and Claimyr) sound like great backup options if we run into complications down the road.

One thing I haven't seen mentioned yet is the importance of understanding how summer funding might be handled differently. Many grad programs have different funding structures for summer months - sometimes it's research assistant wages (W-2), sometimes it's fellowship money (1099 or no form at all), and sometimes students are on their own to find funding. I learned this the hard way when my summer research stipend was processed as a fellowship rather than wages, which meant no taxes were withheld at all. I ended up with a surprise tax bill the following year because I wasn't prepared for the different treatment. If your son's program has summer funding, I'd recommend asking the graduate program coordinator or financial aid office specifically how summer stipends are classified and reported. This way you can plan ahead for any potential tax differences rather than being caught off guard later. Some students end up needing to make quarterly estimated payments during summer months if taxes aren't being withheld from fellowship-type funding. Also, international students have completely different tax rules that can be even more complex, but I'm assuming your son is a US citizen/resident based on your post. Just wanted to mention it in case it's relevant for anyone else reading this thread!

Does anyone know if the IRS is still doing that first-time penalty abatement I've heard about? I'm in almost the identical situation (unfiled 2022-2023, self-employed) and wondering if that could help me?

Victoria, I completely understand that crushing anxiety - I was in your exact shoes 18 months ago with unfiled returns from my freelance graphic design work. The panic attacks were real, but I promise you this is absolutely manageable. Here's your immediate action plan: **STEP 1:** Contact your bank ASAP and request detailed statements for 2022-2023. Most banks can provide up to 7 years of records. Also check any business banking apps, PayPal, Venmo, or Zelle for transaction histories. **STEP 2:** Reach out to clients you worked with during those years. Many will still have records of payments made to you, and some might even have copies of invoices you sent them. **STEP 3:** Check your email for ANY business-related correspondence - contract confirmations, payment notifications, expense receipts, travel bookings, etc. This can help reconstruct your business activities. **STEP 4:** File those returns IMMEDIATELY, even if incomplete. The failure-to-file penalty is much worse than failure-to-pay, and it stops accruing once you file. For penalties: You're likely looking at 5% per month (max 25%) for failure-to-file, plus 0.5% per month for failure-to-pay, plus interest. But if you qualify for first-time penalty abatement, you can get one year's penalties completely waived. The IRS has payment plan options if you can't pay everything at once. Don't let fear paralyze you - every day you wait, the penalties grow. You've got this!

Just to add some perspective - I work at an accounting firm and see this ALL THE TIME. Adjustments can go either way, but most commonly it's because: 1. You made a math error 2. You claimed a credit incorrectly 3. You reported withholding differently than what your employer reported 4. They applied an offset from another debt 5. They found additional income reported to them that wasn't on your return The good news is they're processing your return and you're getting at least some refund. The explanation letter will arrive eventually, but their system is crazy backed up so don't be surprised if it comes after your deposit.

Don't stress too much about this! I've been through NYS tax adjustments multiple times and they're honestly pretty routine. The fact that you already have a deposit date scheduled is actually a good sign - it means they've finished reviewing your return and determined you're still getting money back. The most important thing is that you'll get that explanation letter before or around the time your refund hits. In my experience, common adjustments include simple math corrections, differences in reported income vs what employers submitted, or credits that needed verification. Sometimes the adjustment is even in your favor! Since you mentioned you're really anxious about it, you could try calling them directly if waiting for the letter is too stressful. But honestly, March 7th isn't that far away, and you'll likely have your answer soon. Try not to assume the worst - plenty of us have been in your shoes and it usually works out fine. Keep us posted on what the adjustment was once you find out! Good luck! 🤞