I'm dealing with a very similar situation! My spouse also left their corporate job to start a freelance business, and the income uncertainty was stressing me out when filling out my W4. What ended up working for me was selecting "Married, but withhold at higher Single rate" like others mentioned, and then I used the IRS Tax Withholding Estimator about halfway through the year to see if I needed to adjust. The estimator lets you input your year-to-date earnings and estimated income for the rest of the year, which was perfect for dealing with my spouse's variable freelance income. One thing I learned is that you can update your W4 multiple times throughout the year as your situation becomes clearer. So if your husband's photography business starts generating steady income, you can always adjust your withholding then rather than trying to guess perfectly right now. The "higher Single rate" option has been a good safety net for us - we'd rather get a refund than owe money, especially during this transition period where his business income is so unpredictable.

Just wanted to add another perspective as someone who went through this exact scenario! My wife left her corporate job to start a consulting business two years ago, and I was the primary earner dealing with the same W4 uncertainty. One thing that really helped us was setting up estimated quarterly tax payments for her business income, even when it was irregular. This took some pressure off my W4 withholding because we were covering her self-employment taxes and income taxes through the quarterly payments instead of trying to withhold everything from my paychecks. The quarterly payment approach works especially well for photography businesses since the income can be so seasonal - wedding photographers might make most of their money in spring/summer/fall but have slower winters. This way you're not trying to predict a full year of income all at once. I ended up using "Married, but withhold at higher Single rate" on my W4 as others suggested, plus we made modest quarterly payments for her business. When her income became more predictable in year two, we adjusted both approaches. It's definitely easier to manage when you spread the tax planning across multiple strategies rather than putting all the pressure on your W4 withholding alone.

Has anyone actually been audited for doing this scholarship allocation strategy? I'm thinking about using it but worried about getting flagged.

This is a legitimate and well-established tax strategy that many families use successfully! I've helped several clients navigate this exact situation over the years. The key points to remember: Your son has the legal right to choose how to allocate his scholarship funds between qualified expenses (tuition/fees) and non-qualified expenses (room/board/personal). When scholarships exceed qualified expenses, the student can elect to treat some scholarship money as taxable income, which then frees up those education expenses for AOTC purposes. Yes, your son will need to file Form 1040-X to report the additional $4,000 as taxable income. Even though he won't owe any tax due to the standard deduction, the amended return creates the proper paper trail for your AOTC claim. One important timing note: Make sure the amended return gets filed before you file your own return claiming the AOTC. This helps avoid any processing delays or questions from the IRS about the coordination between your returns. Also, consider having your son write a brief memo explaining his allocation decision and keep it with your tax records. Something simple like "I elect to treat $4,000 of my scholarship as payment for room and board expenses rather than qualified tuition expenses." This documentation can be helpful if questions ever arise. The strategy is completely above board when done correctly with proper documentation!

I'm at week 20 and honestly considering reaching out to my congressman at this point. Filed my 1040X in September and still nothing but "processing" on WMR. My CPA said that's becoming the norm now - she's seeing 22-26 weeks regularly for her clients. The worst part is having zero real information about what's actually happening. At least with regular returns you get some updates, but amended returns are like throwing papers into a black hole. Really wish the IRS would be more transparent about realistic timelines instead of that misleading 16-week estimate.

Just wanted to chime in as someone who's been through this nightmare twice! My first amended return took 23 weeks and my second one (filed last year) took 19 weeks. The anxiety is absolutely brutal, especially when you need that money for bills like you mentioned. One thing that helped me was setting up direct deposit alerts so I'd know the moment anything hit my account instead of constantly checking the useless WMR tool. Also, if it makes you feel any better, I've never heard of an amended return just disappearing - they're slow as molasses but they do eventually process them. Hang in there, you're already at week 12 so you're in the home stretch even if it doesn't feel like it! 🙏

Quick question - does anyone know if the Child and Dependent Care Credit is refundable for 2025? It was temporarily refundable during covid but I can't remember if that's still the case.

Just wanted to add one more thing that might be helpful - if you're using a nanny or babysitter instead of (or in addition to) the preschool, make sure you're handling the household employee tax requirements correctly. If you pay them more than $2,700 in 2025, you'll need to withhold and pay Social Security and Medicare taxes, plus provide them with a W-2. This can affect your Child and Dependent Care Credit eligibility if not done properly. Also, for your situation with the $375k AGI, you're still well within the phase-out range so you should get a decent credit. The phase-out actually starts around $15,000 AGI and gradually reduces the credit percentage, but even at higher incomes you can still claim the full $3,000/$6,000 in expenses - you just get a lower percentage back as a credit.

A lot of good info here but nobody mentioned that the timesheet might be misleading you. Your total pay is still $520 ($327 taxable wages + $193 non-taxable reimbursement). You're not losing money - the company is just separating the taxable from non-taxable portions as they should. Check your final paystub - you should see: - Gross earnings: $327 - Mileage reimbursement: $193 - Total: $520 (before tax withholding) Then taxes would only be calculated on the $327 portion.

This is a really helpful thread! I'm also a delivery driver and was confused about the same thing on my paystubs. Just to add one more perspective - make sure you're keeping good records of your actual miles driven vs. what your employer is reimbursing you for. In my case, I noticed my employer was only reimbursing me for "delivery miles" (the distance between stops) but not for the miles I drove to get to my first delivery or back home from my last one. Those "deadhead" miles can add up over time. Since the reimbursement rate is meant to cover all your vehicle costs (gas, wear and tear, depreciation, etc.), you want to make sure you're being reimbursed fairly for all business-related driving. If there's a significant gap, it might be worth discussing with your employer or at least tracking those unreimbursed miles for your own records.