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I went through this exact same situation a few months ago! Like others have mentioned, tax prep fees are almost always deducted from your federal refund only - most states don't allow third-party deductions from state refunds. Here's what helped me figure it out: I found my "Refund Transfer Authorization" form that I signed when I chose to pay fees from my refund. It clearly showed that only the federal refund would be used for fee payment. My tax software (TurboTax) also had a detailed breakdown in the "Documents" section showing the fee allocation. For your state refund being lower than expected, I'd suggest double-checking if you had any state taxes withheld that you might have forgotten about, or if there were any state-specific credits that got adjusted during processing. In my case, my state had automatically applied a credit I wasn't aware of, which changed my final refund amount. If you're still unsure, most tax prep companies have a customer service line specifically for refund questions - they should be able to pull up your account and show you exactly where each fee was deducted from. Don't stress too much though, this confusion happens to a lot of us! š
This is such a relief to read! I've been stressing about this for weeks thinking I somehow got charged twice. Your mention of the "Refund Transfer Authorization" form is exactly what I needed - I completely forgot about signing that document. I'm going to look for it in my tax software's document section tonight. It's also good to know that state-specific credits can automatically adjust your refund amount without much notice. As someone still learning the US tax system, these kinds of behind-the-scenes adjustments really throw me off! Thanks for sharing your experience and for the reassurance that this confusion is normal. @Libby Hassan
Hey Noah! š As someone who's also navigated the US tax system as a newcomer, I totally understand the confusion! The good news is that you're almost certainly overthinking this - tax prep fees are virtually always taken from federal refunds only, not state refunds. Here's what I'd recommend checking first: ⢠Log into your tax prep service and look for a "Fee Summary" or "Refund Disbursement" document ⢠Compare your actual state tax return (the final filed version) with your initial calculations - you might have missed a deduction or credit adjustment ⢠Check if your state made any automatic adjustments during processing (this happens more often than you'd think!) The fact that you received your federal refund in full actually supports this - if fees were deducted, they would have come out of that amount first. Your state refund difference is likely due to calculation variations or state-specific processing adjustments. Don't worry, this exact scenario trips up tons of people every tax season! Once you find that fee breakdown document, everything should make much more sense. The tax system here has a lot of moving parts that aren't always obvious at first glance. š
Don't forget you still have to pay the self-employment tax of 15.3% on your net profit from doordash (after deducting mileage and expenses). The mileage deduction reduces your income tax but you still gotta pay SE tax on whatever profit is left.
This is important! A lot of new drivers miss this part. Your calculator might not be including the self-employment tax which could change your numbers significantly.
This is actually a really common scenario that confuses new gig workers! Your calculation sounds about right. Here's what's happening: Your $7,300 DoorDash income minus the $2,600 mileage deduction leaves you with $4,700 in taxable profit. The self-employment tax on that would be around $664 (15.3%), plus regular income tax. But if you had taxes withheld from another job earlier in the year, those withholdings get applied against your total tax liability. So even though you owe taxes on your DoorDash income, the amount already withheld from your W-2 job might be more than your total liability, resulting in a refund. A few things to double-check: - Make sure your tax calculator is including self-employment tax (many don't) - Verify you're using the correct 2025 mileage rate (it's $0.70 per mile) - Consider other deductible expenses like phone usage, delivery bags, etc. It's totally normal to get a refund in this situation - it just means you prepaid more than you actually owe. Just make sure all your deductions are legitimate and well-documented!
This explanation really helps clarify things! I'm in a similar situation as a new gig worker and was also confused about getting a refund instead of owing. One question though - you mentioned other deductible expenses like phone usage and delivery bags. How do you calculate the phone usage deduction? Do you just estimate what percentage of your phone bill is for work, or is there a specific formula the IRS wants you to use?
Is there a quick way to estimate how much EIC I might get? I'm a single parent with 2 kids making about $32,000 from my job and some gig work.
For a single parent with 2 qualifying children and an earned income/AGI of $32,000 for 2024 (filing in 2025), you'd be looking at approximately $5,700-$6,000 in EIC. You're actually in a sweet spot where you'll get close to the maximum credit amount. The exact amount will depend on your precise income and filing status (head of household, I'm assuming). The IRS has an EITC Assistant tool on their website that can give you a more precise estimate if you enter your specific details.
Just to add some clarity for the original poster @Malik Johnson - since you mentioned you're a bartender with tips, make sure you're reporting ALL your tip income accurately. The IRS pays close attention to tip reporting in the service industry, and underreporting tips can not only get you in trouble but also reduce your EIC since it's based on your reported earned income. If your employer doesn't already track and report all your tips through payroll, you'll need to use Form 4137 to report unreported tip income. This includes cash tips that customers give you directly. Many bartenders don't realize that underreporting tips actually hurts them twice - once by potentially triggering an audit, and again by reducing credits like the EIC that they're entitled to. With your AGI being lower than your gross due to 401k and health insurance, you're in a good position for the EIC. Just make sure your tip reporting is accurate and complete!
This is really important advice! I had no idea that underreporting tips could actually hurt my EIC eligibility. I'm new to filing taxes and honestly wasn't sure how to handle all the cash tips I receive. Do you know if there's a minimum amount of tips that needs to be reported, or should I be tracking every single dollar? Also, if I've been underreporting in previous years, is there a way to correct that without getting in major trouble with the IRS?
Just wanted to chime in as someone who went through this exact situation last year. I had to file back taxes for 2020 when I was working as a retail manager, but by the time I filed (in 2023) I had moved into accounting. The key thing is that the occupation field on your tax forms should reflect what you were actually doing during the tax year you're filing for - so in your case, definitely put "bartender" for your 2022 taxes. This helps the IRS verify that your W-2 income and any tips you reported make sense for someone working in the service industry during that time period. One thing that helped me was gathering all my old pay stubs and W-2s from 2022 before I started filling out the forms. Having that documentation made it much easier to remember exactly what my job title was and when I worked there. Also, if you received any 1099s for tip income or side work during 2022, make sure those occupations match up consistently across all your forms. The IRS is pretty understanding about back taxes as long as you're being honest and thorough. Just take your time with the forms and don't rush through the details!
This is such solid advice about gathering all the old documentation first! I'm in a similar boat - need to file for 2020 and 2021, and I keep getting overwhelmed trying to remember all the details from those years. Your point about making sure the occupation matches across all forms is really important too. I hadn't thought about how tips and 1099 work might need to be consistent with whatever I put as my main occupation. Thanks for the reminder that the IRS is generally reasonable as long as you're being honest - that actually makes me feel less anxious about the whole process!
One thing I learned when I was filing my back taxes is that it's really important to be consistent with dates too. Since you mentioned you changed jobs, make sure you check exactly when you stopped working as a bartender in 2022. If you worked part of the year as a bartender and part as something else, you might need to list the occupation that provided the most income for that tax year. Also, keep copies of everything you file - especially for back taxes. The IRS might have questions later, and having your own records of what you submitted (including what occupation you listed) can save you a lot of headaches down the road. I made that mistake on my first back tax filing and regretted it when they sent me a follow-up letter months later asking for clarification. Don't stress too much about it though - as long as you're honest about what you were actually doing in 2022, you'll be fine. The occupation field is just one small part of a much bigger picture, and the IRS mostly uses it to make sure everything else on your return makes sense.
Javier Torres
Yes, those are definitely positive signs! The disappearing verification notice is one of the clearest indicators that the IRS has accepted your verification and is moving your return forward in their system. When combined with the WMR update, it strongly suggests your return is now actively being processed. Don't worry about the blank transcript - this is completely normal and transcripts typically lag behind other systems by several days or even a week. I've seen many people in similar situations receive their refunds within 10-14 days despite being quoted the standard 21-day timeframe. The fact that the agent confirmed everything looked good during your verification call is also very encouraging. Try to check your transcript every few days rather than obsessively refreshing it. Based on your description, you're definitely on the right track for getting your refund soon!
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Gabriel Ruiz
ā¢This gives me so much peace of mind! I've been constantly refreshing everything and getting increasingly worried about the blank transcript. It's really helpful to hear from someone else that the disappearing notice is actually a positive indicator rather than something to worry about. The timeline you mentioned (10-14 days vs the 21 they quoted) is especially encouraging. I think I need to take your advice and stop obsessing over checking multiple times per day - it's probably just adding unnecessary stress. Really appreciate you taking the time to explain what these signs typically mean!
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Destiny Bryant
Those are absolutely positive signs! The disappearing verification notice combined with the WMR update is exactly what you want to see after a successful verification call. I went through the same process about 6 weeks ago - called for verification, notice vanished within 24 hours, and WMR updated shortly after. My transcript stayed completely blank for almost 10 days which had me panicking, but then it suddenly populated with all the processing codes and my refund hit my account 3 days later. The transcripts really do lag way behind everything else. Since the agent confirmed everything looked good and you're seeing these positive changes, I'd expect your transcript to update within the next week and your refund probably within 2 weeks max, despite the 21-day quote. Try not to refresh the transcript too obsessively (I know it's hard!) - you're definitely on track for a successful resolution!
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