Has anyone used the IRS Tax Withholding Estimator for this kind of situation? I tried using it with multiple income sources but got confused about how to enter the self-employment part.

Ruby, you're in a pretty straightforward situation despite having multiple income streams. Here's the breakdown: Your self-employment income of $1,450 will trigger self-employment tax (about $205 as Micah calculated), but since your total annual tax liability will be well under $1,000, you can skip quarterly payments and just pay when you file. One thing to watch out for - make sure your W-2 job is withholding enough federal tax. With $2,300 from the library job, they should be withholding some federal income tax even though your total income might be below the standard deduction threshold. You want to avoid owing a big chunk at tax time. For Michigan specifically, you'll owe about $62 in state income tax on your self-employment income (4.25% of $1,450), but again, this is small enough that you don't need to make estimated payments. Keep good records of your freelance expenses - business supplies, computer equipment, etc. These can reduce your self-employment income and lower that $205 self-employment tax.

Don't forget to look at your state withholding too! A lot of times when people get raises they focus on updating federal withholding but forget about state. I made this mistake and got hammered with a state tax bill even though my federal withholding was fine. Especially with that kind of income jump, your state tax liability increased significantly too.

Your situation is completely normal and actually pretty predictable with that kind of income jump. The math checks out - $25k withholding on $185k income is only about 13.5%, but your actual tax rate on that income is going to be closer to 20-25% when you combine federal and state. Here's what happened: When you jumped from $105k to $185k, a big chunk of that additional $80k gets taxed at 24% federal (and potentially some at 32% if you hit that bracket), plus your state rate on top. Your payroll withholding was probably still calculated based on your previous income level and didn't adjust quickly enough for the promotion and bonuses. For next year, definitely update your W-4 immediately using the IRS withholding calculator. You'll want to either increase your withholding percentage or add a fixed dollar amount per paycheck to avoid this surprise again. Bonuses are often withheld at a flat 22%, which might not be enough given your new tax bracket. A CPA probably isn't necessary unless you have complex investments or business income. The amount you owe is frustrating but totally reasonable given the income increase. Focus on adjusting your withholding going forward rather than second-guessing your return.

According to the IRS website (https://www.irs.gov/refunds/tax-season-refund-frequently-asked-questions), refund transfers through third-party processors like SBTPG can have several fees deducted. I've documented everything in my spreadsheet for the past 3 tax seasons, and here's what I've found: 1. Tax preparation fees (if you didn't pay upfront) 2. State filing fees 3. Refund transfer fees 4. Audit protection if you added it You can also check the IRS 'Where's My Refund' tool and compare that amount to what SBTPG shows. If the IRS amount is higher, then SBTPG took fees. If the amounts match but you got less, your bank might have fees or holds. Just want to confirm I've got this right?

As someone who's been through this process multiple times, I can confirm that SBTPG will show the exact amount they received from the IRS, then clearly list any deductions. However, there's one important thing everyone should know - SBTPG receives your refund AFTER the IRS has already taken out any offsets for things like back taxes, child support, or federal debts. So if your expected refund was $4,783 but the IRS only sent $4,500 to SBTPG due to an offset, SBTPG's portal will show they received $4,500 (not $4,783). This is why checking your IRS transcript is crucial - it shows the original refund amount AND any reductions before it even gets to SBTPG. The good news is SBTPG's fee structure is usually pretty transparent. Most people see fees between $25-50 depending on their filing method and any add-ons they selected. If you're missing significantly more than that, definitely check for IRS offsets first.

This is a great discussion with lots of solid advice! I'm dealing with a similar situation where my property has appreciated significantly since purchase. One thing I'd add is to consider the timing of any changes. If you're relatively young and healthy, keeping the current will structure might make sense to preserve that full step-up in basis benefit. But if there are health concerns or you want to simplify things for your wife, adding her to the deed now might be worth the partial loss of step-up basis for the peace of mind. Also, don't overlook the emotional aspect - some spouses feel more secure being on the deed even if it's not the most tax-optimal choice. Sometimes the psychological benefit outweighs the tax savings, especially if we're not talking about huge amounts. The Transfer on Death deed option mentioned by Hattie sounds really appealing if your state allows it - seems like it gives you the best of both worlds. Definitely worth checking if that's available where you live.

Great thread with lots of helpful perspectives! As someone who went through this exact decision recently, I wanted to share what worked for us. We were in a very similar situation - house only in my name, significant appreciation ($280k over 6 years), and trying to figure out the best approach for my spouse. After consulting with both a tax advisor and estate attorney, we ended up keeping the current structure (house in my name, will leaving everything to spouse) for the tax benefits everyone mentioned. However, we made one key addition that gave us both peace of mind: we set up a revocable living trust and transferred the house into it. This way we get the full step-up in basis benefit when I pass away, avoid probate entirely, and my spouse has immediate access without waiting for court proceedings. The trust cost about $1,500 to set up but will likely save us tens of thousands in taxes and probate costs. Plus my spouse feels much more secure knowing she won't have to deal with legal complications during an already difficult time. One thing to definitely verify - make sure your current will is properly executed according to your state's requirements. We discovered ours had a witnessing issue that could have caused problems down the road.

Great thread everyone! I just wanted to add a few practical tips for anyone working through Form 4952: 1. Keep detailed records of what constitutes your investment income vs. other types of income throughout the year. It makes tax time much easier. 2. If you're unsure about whether to make the election for qualified dividends or capital gains, calculate both scenarios before deciding. Sometimes the math doesn't work out in your favor even when you have excess investment interest expenses. 3. Don't forget that any investment interest expense you can't deduct this year carries forward to future years, so it's not completely lost if you don't have enough investment income this year. The distinction between investment income and business income (like rental properties) can be tricky, but it's crucial for getting Form 4952 right. When in doubt, consult the instructions or speak with a tax professional - the rules can be quite nuanced depending on your specific situation.

I've been dealing with Form 4952 for several years now and wanted to share some additional insights that might help others in similar situations. One thing that often trips people up is the timing of when investment interest expenses are deductible. The investment interest expense deduction is limited to your net investment income for the current year - you can't "pre-deduct" against expected future investment income. However, as others mentioned, any excess does carry forward indefinitely. Also, if you have investment expenses other than interest (like investment advisory fees), those are treated differently post-2017 tax reform. Investment advisory fees are no longer deductible as miscellaneous itemized deductions, but investment interest expenses still are deductible (subject to the investment income limitation). For those with complex investment structures involving multiple partnerships or investment entities, I'd strongly recommend working with a tax professional who specializes in investment taxation. The interaction between passive activity rules and investment interest limitations can get quite complex, especially when you have multiple K-1s with different types of income and expenses. The key is making sure you're properly characterizing all your income and expenses before completing Form 4952. Getting that foundation right makes the rest of the form much more straightforward.