Check your 2023 tax bracket. For married filing jointly: 10% - $0 to $22,000 12% - $22,001 to $89,450 22% - $89,451 to $190,750 24% - $190,751 to $364,200 Your combined income puts you partly in the 22% bracket and partly in the 24% bracket. The witholding tables don't handle two high incomes well. Try this: Multiply what you currently owe ($5,500) by 1.3 (to give a cushion), which is $7,150. Divide by the number of pay periods remaining in the year between both of you. Add that as "additional withholding" on line 4(c) of both your W-4 forms.

I completely understand your stress, especially with a baby coming so soon! Your tax calculation looks correct unfortunately - you're experiencing the "marriage penalty" that affects dual high-income households. The core issue is that you're both earning good incomes ($75K and $130K), putting your combined household income at $205,800. This pushes you into higher tax brackets (22% and touching 24%), but the W-4 withholding system assumes each job is the only household income when you both select "Married." Here's what I'd recommend for immediate action: 1. **Pay the $5,500 now** to avoid penalties and interest 2. **Both update your W-4s immediately** - select "Married but withhold at higher single rate" 3. **Add extra withholding** - roughly $200-250 per paycheck between both of you For peace of mind, use the IRS Tax Withholding Estimator at irs.gov - it's free and will give you exact numbers for your situation. The good news: Next year will be much better! With your new baby, you'll get: - $2,000 Child Tax Credit (fully refundable up to $1,500) - Potential Child and Dependent Care Credit if you use daycare - These credits alone could reduce your tax liability by $2,000+ Don't stress too much - this is a very common issue for dual-income households, and you have the savings to handle it. Focus on adjusting withholding now and enjoying your upcoming arrival!

Quick question for those who've done the Streamlined Procedure - did you have to amend state tax returns too? I lived in California before moving to Austria 10 years ago, and I'm confused if I need to file CA state returns as part of the Streamlined process.

@Alexis Robinson - I went through almost the exact same situation as a US/Austrian dual citizen about 2 years ago! The stress you're feeling is totally normal, but the good news is it's very manageable once you understand the process. A few key points from my experience: - The Streamlined Foreign Offshore Procedures are specifically designed for people like us who didn't know about filing requirements - No penalties if you qualify (which you almost certainly do based on your situation) - You'll need 3 years of tax returns (2022-2024) and 6 years of FBAR forms - Austria's tax treaty with the US means you'll likely owe little to nothing thanks to Foreign Earned Income Exclusion and tax credits For costs, I ended up paying around €2,800 to a CPA who specializes in expat taxes. It was worth every penny for the peace of mind, especially since my Austrian investment accounts needed careful handling to avoid PFIC complications. One specific tip: gather all your Austrian tax documents (Steuerbescheid) from the past 3 years before meeting with anyone. The Foreign Tax Credit calculations rely heavily on what you already paid to Austria, and having these organized upfront saves time and money. Feel free to ask if you have specific questions about the process!

I completely understand your confusion about the disappearing codes - the IRS transcript system can be incredibly bewildering, especially when you're still getting familiar with how it all works! What you're experiencing is actually quite typical during tax processing. The 424 code essentially flags your return for some kind of review or verification, but when that review is completed successfully, the IRS removes the 424 and replaces it with a 420 (examination closed) along with the 971 (notice issued). It's like they're updating your file to reflect the current status rather than keeping a historical record of every step. Since you mentioned being in the US for only 3 years, this could be related to verifying foreign income, education credits, or even just routine checks they do for newer taxpayers to ensure everything aligns with their records. The key thing to watch for is whether any additional freeze codes appear in the coming days. The good news is that the pattern you're seeing (424 disappears → 420 and 971 appear) typically indicates successful completion of whatever they were reviewing. Most people who see this sequence get their refunds within 7-14 days. Keep checking your transcript periodically for a 846 code with a refund date - that's when you'll know you're officially in the clear! The 971 notice should arrive soon and will explain exactly what they reviewed, which should give you peace of mind about the whole process.

This is such a common experience for newcomers to the US tax system! I went through something very similar during my second year filing taxes here. The disappearing 424 code followed by 420 and 971 is actually part of the normal IRS workflow - think of it as their internal status updates rather than something to be concerned about. In most cases, this pattern indicates they completed whatever verification they were doing (could be anything from income verification to dependent checks) and are now moving your return forward for processing. The 971 notice you'll receive should explain exactly what they reviewed. From what I've observed in this community, people typically see their refund dates appear within 1-2 weeks after this code sequence. Since you mentioned being relatively new to the US, they might have been doing routine verification of your tax history or foreign income reporting - both very standard procedures. Try not to stress too much about it! The IRS system is confusing by design, but this particular pattern is usually good news wrapped in bureaucratic mystery. Keep an eye on your transcript for that 846 refund code, and you should be all set soon.

Does anyone know if AMT credits expire? I've been carrying mine forward for 3 years now and I'm worried I might lose them if I don't use them soon.

Just to add another perspective on the timing strategy - if you're planning to sell the underwater stock anyway, consider doing it in a year when you have other significant capital gains. That way you can maximize the benefit of both the capital loss from the stock AND potentially recover more of your AMT credit in the same tax year. I had a similar situation where I sold my tanked options in the same year I sold some rental property at a gain. The capital gains from the property sale helped me utilize a big chunk of my AMT credit that I wouldn't have been able to use otherwise. It's all about creating the right tax situation to unlock that credit - sometimes you need gains to make the math work in your favor. Also worth noting that if you're married, your spouse's income and tax situation can affect how much AMT credit you can recover each year, so factor that into your planning too.

OMG I was so worried about this same thing last month!! My offset was for old state taxes I didn't even know I owed! 😱 But I can confirm that YES, you absolutely do get whatever is left over after they take the offset amount. Mine took exactly 17 days from when my WMR status changed to "refund approved" until I got the remaining amount in my bank account. The waiting was awful but it did come through! Keep checking your bank account and be patient! 💕

Hey Amy! Just wanted to reassure you that you'll definitely get the remaining portion after the offset. I went through this exact situation two years ago with old student loan debt. The Treasury Offset Program will take what you owe (up to your full refund amount), and the IRS will send you whatever's left. In your case, if you owe $1,800 and are expecting $3,200, you should receive about $1,400. The process does add some time - mine took about 3 weeks longer than usual. You can actually check the TOP website periodically to see if your case status updates. Don't stress too much, the system works, it's just slower than we'd like! Also, consider setting up a payment plan for any remaining student loan balance to avoid this happening again next year.