This is definitely the company trying to avoid registering in multiple states! My old job tried to pull this same thing. They don't want to deal with the paperwork and maybe additional business taxes that come with having nexus in multiple states. You should know that some states are actually suing companies for doing this! They're losing out on tax revenue when companies pretend their remote workers don't exist.

This is a frustrating situation that unfortunately many remote workers are dealing with. Your instincts are correct - you should be paying income tax to the state where you physically work and reside, not where your employer's headquarters happens to be located. The company is likely trying to avoid the administrative hassle and costs of registering for payroll taxes in your state. When they have an employee working in a state, they typically need to register there, withhold that state's income taxes, and potentially pay other business taxes too. Here's what I'd recommend: First, document everything in writing with your HR department. Explain that state income taxes should be based on where work is physically performed. If they refuse to budge, you'll probably need to go the dual-filing route that others have mentioned - let them withhold for the wrong state temporarily, then file as a nonresident there to get your refund while filing properly in your home state. Keep detailed records of where you work (utility bills, internet bills, etc.) as proof of your work location. This protects you if either state ever questions your filings. The good news is this situation is becoming common enough that most tax authorities understand it, even if some employers are still trying to avoid their obligations.

Has anyone used TurboTax to handle this Form 8959 stuff? Does it calculate everything automatically or do I need to figure out the Additional Medicare Tax manually? I'm getting really confused with all these extra forms.

I went through this exact same situation last year and it was so confusing at first! The Additional Medicare Tax is basically a "luxury tax" on higher earners - it's 0.9% on income above $250k for married filing jointly. What probably happened is you and your spouse's combined wages crossed that $250k threshold, but your employers didn't withhold enough because they only look at individual wages (they start withholding the extra 0.9% when someone individually makes over $200k). So you end up owing it at tax time. The $1,350 on line 24 that flows to line 25c is legit - you do have to pay it. But for next year, you can avoid the surprise by either having extra tax withheld from your paychecks or making quarterly estimated payments. I had my employer withhold an extra $100 per paycheck and it covered it perfectly this year. Don't stress about it - it's just part of the tax code for higher income households. The IRS Publication 15 has more details if you want to dive deeper into how it's calculated.

Has anyone actually been audited after filing an amended return? I'm curious about real experiences because I'm in a similar situation but mine involves some self-employment income I forgot to report (about $4,000).

I can relate to your anxiety about this! I had a very similar situation two years ago where I forgot a 1099-INT for about $150. I was absolutely panicking and convinced I was going to get audited. The reality is that filing an amended return for missing interest income is incredibly common and low-risk. The IRS actually prefers when taxpayers self-correct these issues rather than waiting for them to catch it through their matching system. Your $105 in interest would only increase your tax liability by maybe $25-30, which is truly small potatoes to them. I filed my 1040-X and it took about 12 weeks to process (this was during tax season), but I never heard anything beyond getting my adjusted refund. No audit, no additional scrutiny, nothing. The IRS is dealing with much bigger fish than people who forgot small amounts of interest income. Try not to stress too much about it - you did the right thing by correcting it proactively. Your wisdom tooth situation will work out, even if the refund is delayed a bit. The peace of mind from having filed correctly is worth the wait.

One thing to consider - if you filed amended returns through a CPA, there may have been a substantial change in your reported income or deductions that triggered additional scrutiny. The certified mail could be related to that. I had this happen with my 2018 taxes when my CPA found significant deductions I'd missed. The IRS sent certified mail requesting documentation to verify those deductions. It wasn't an audit exactly, but they wanted proof before accepting all the changes.

Don't panic! Certified mail from the IRS is concerning but not necessarily catastrophic. The future date you're seeing (12/16 when today is 12/5) is actually normal - their system generates transcript entries before the physical notice is mailed. Given that this relates to your 2019 amended return and shows a $12,350 liability, this is most likely a CP2000 notice or similar correspondence about adjustments they've made based on your amendment. The $90 is probably a small penalty or interest charge. Here's what I'd recommend: First, don't stress too much until you actually receive and read the letter. Second, have all your 2019 tax documents ready along with anything your CPA filed for the amendment. Third, contact your CPA immediately when you get the letter since they're familiar with your situation. Most importantly, whatever the letter says, there are almost always options - payment plans, penalty abatements for first-time issues, or the ability to dispute if there are errors. The key is responding within the timeframe they give you (usually 30-90 days depending on the type of notice).

Something important that hasn't been mentioned yet - don't forget about self-employment taxes! If you do make your woodworking a legitimate business, you'll pay an additional 15.3% on your profits for Medicare and Social Security taxes. This is on top of income tax. This is one reason why an S-Corp can eventually make sense (after you're profitable), as you can pay yourself a reasonable salary (subject to SE tax) and take the rest as distributions (not subject to SE tax).

Just went through this with my pottery business! My advice: start as a sole proprietor (Schedule C) first, not an S-Corp. Way simpler and lower compliance costs. You'll need to be careful about what you deduct. For equipment, anything over $2,500 typically needs to be depreciated rather than expensed entirely in year one (though Section 179 and bonus depreciation might help). For home workspace, you can only deduct space used EXCLUSIVELY for business. If your workshop doubles as storage or family space, you'll run into problems.