Friendly reminder that you should also be setting aside money for self-employment tax! When I first started contracting, I only calculated regular income tax and completely forgot about the additional 15.3% for self-employment tax (Social Security and Medicare). Was a nasty surprise at tax time.

As someone who went through this exact same situation last year, I can tell you that the IRS is actually pretty understanding about first-time contractor mistakes. Here's what I learned: 1. You can absolutely request first-time penalty abatement - it's a real thing and they granted it for me even though I missed the first two quarters. 2. The penalties aren't as scary as they sound. Mine ended up being around $180 for the year, which was way less than I feared. 3. Don't wait! Start making estimated payments immediately. You can make payments anytime through EFTPS (Electronic Federal Tax Payment System) or IRS Direct Pay. Even if you're late, paying something now reduces the penalty amount. One tip that saved me: if your total tax liability this year will be less than what you owed last year, you might qualify for the "safe harbor" rule and avoid penalties altogether. This often applies to people transitioning from W-2 to contractor work mid-year. Also, make sure you're tracking all your business expenses - mileage, home office, equipment, etc. These deductions can significantly reduce what you actually owe in taxes.

Has anyone tried FreeTaxUSA? Federal is always free and state is only $15. It's way cheaper than TurboTax and H&R Block even if you have to pay for state.

As someone who's been through the free filing maze multiple times, I'd definitely recommend starting with the official IRS Free File portal at irs.gov/freefile since you qualify with your $42k income. But here's a pro tip that saved me last year: before you commit to any service, take a screenshot of the "free" promise on the first page. I got burned by TaxAct in 2022 when they tried to charge me $39 for state filing after I'd already entered all my info, even though I accessed it through the IRS portal. Also, if you're in a state that doesn't participate fully in Free File (like I am), check if your state has its own free e-filing system. My state offers completely free e-filing directly through their revenue department website for anyone making under $60k. It's a separate system from the federal filing but totally worth the extra 20 minutes to save $30-50. One last thing - if you do hit any snags with the free systems, don't give up and pay for a premium service right away. The IRS Taxpayer Advocate Service has a hotline that's helped me troubleshoot free filing issues before, and they're actually pretty responsive during tax season.

I had EXACTLY THIS SITUATION in June! Called the offset number: no debt. Called IRS: they said wait for BFS letter. Letter never came, but my bank suddenly had a deposit for $300 less than my expected refund a week after the projected date. Called again and after 1.5hrs on hold found out it was for a state tax debt from 2017 that I never knew about because I moved. The systems don't talk to each other well.

I went through this exact same situation last year! The WMR tool showed that scary offset warning for weeks, but when I called the Treasury Offset Program, they confirmed no debts. Turns out my return was just flagged for a routine review that had nothing to do with offsets - the IRS just uses generic messaging that doesn't match what's actually happening. What helped me was checking my account transcript (once I could finally access it) which showed the real status codes. In my case, it was just a standard review hold that resolved automatically after about 3 weeks past my original refund date. The whole time WMR kept showing the offset warning even though no offset was happening. Since you're still within your refund timeframe (March 4th), I'd wait until then before panicking. If it doesn't show up by March 5th, definitely call the IRS directly. The offset warning is probably just their system being overly cautious rather than indicating an actual problem. Hope this helps ease some of your stress!

I had a similar situation with SoFi last month. Compared to my previous experience with Chase where refunds appeared exactly on the date WMR provided, SoFi held my refund for 4 additional business days for "security verification." When I called, they confirmed they had received it but wouldn't release it until their verification process completed. There was nothing I could do to expedite it. The representative matter-of-factly informed me this is standard procedure for government deposits over a certain amount at many online banks. The funds did eventually appear, but the delay was frustrating.

I'm going through this exact situation right now with my Chime account! Filed on March 3rd, got approved March 16th with a deposit date of March 21st, and still nothing. TBG told me the same thing - that they sent it - but Chime says they don't see any pending deposits. This is so stressful because I really need this refund for some unexpected expenses. Reading through everyone's experiences here, it sounds like this is unfortunately pretty common with online banks. I'm going to try calling Chime's fraud department directly like @Niko Ramsey suggested, and maybe request that refund trace from the IRS that @Katherine Shultz mentioned. Has anyone had success getting through to an actual person at TBG who could provide more specific information about when exactly they sent the deposit? Their customer service seems pretty limited when I called yesterday. Thank you @Danielle Mays for starting this thread - it's really helpful to know I'm not alone in dealing with this!

Welcome to the world of W2 employment! That 21% withholding rate is actually pretty typical for your income level. Here's a rough breakdown of what you're probably seeing: - Federal income tax: ~12-15% (depends on your W-4 filing status and allowances) - Social Security: 6.2% - Medicare: 1.45% - State tax: varies by state, could be 0-8%+ - Possibly local taxes or SDI depending on your location The good news is that withholding is just an estimate - it's designed to get you close to what you'll actually owe. When you file your tax return next year, you'll either get a refund if too much was withheld, or owe a bit more if not enough was taken out. Pro tip: Keep your first few pay stubs and compare them when you do your taxes next year. This will help you understand whether your withholding is on target or if you need to adjust your W-4 for the following year. Most people prefer to get a small refund rather than owe money, but you don't want to give the government too big of an interest-free loan either!

Just wanted to add my perspective as someone who went through this exact same shock a few years ago! That 21% is definitely normal - I remember feeling like I was being robbed when I saw my first real paycheck. One thing that really helped me was setting up a simple spreadsheet to track my paystubs throughout the year. I'd note the gross pay, total taxes withheld, and my take-home amount. By the time tax season rolled around, I had a clear picture of whether I was on track for a refund or if I'd owe money. Also, don't forget that some of those "taxes" might actually be beneficial deductions! Things like health insurance premiums, dental/vision coverage, or retirement contributions show up as deductions but they're going toward your benefits. Make sure you're reading your paystub carefully to understand what's actually tax withholding versus other deductions. The learning curve is steep at first, but you'll get the hang of it. And honestly, once you understand how it all works, you can make strategic decisions about things like retirement contributions or flexible spending accounts that can help optimize your take-home pay while reducing your tax burden.