Just went thru this! That taxr.ai tool someone mentioned above is actually legit - told me exactly when my 420 would clear and it was spot on. Way better than waiting on hold with IRS for hours

Code 420 can be frustrating but hang in there! I'd recommend calling the Practitioner Priority Service line if you have a tax pro helping you, or try calling early morning (7-8am) for shorter wait times. Also keep checking your transcript weekly - sometimes the codes update before you get any mail. The fact that you only had W2 and child tax credit makes it likely just a routine verification that should clear up relatively quickly.

I'm still confused about this. Can I claim exempt just for December when I'm working all that overtime, then switch it back in January? Or is exempt an all-year thing?

I see a lot of confusion here about withholding vs. exemptions. Let me try to clear this up from a practical standpoint. The "exempt" checkbox on your W-4 is NOT a tool for managing cash flow during busy seasons. It's a very specific declaration that you expect ZERO federal tax liability for the entire year. This typically only applies to people earning very little (below the standard deduction threshold). If you're working overtime during the holidays and expect to owe taxes for the year, here are your legitimate options: 1. Adjust your withholding allowances on your W-4 to have less tax taken out (but still some) 2. Use the IRS withholding calculator or tools like those mentioned above to find the right balance 3. Accept that you'll get a larger refund when you file, but have less take-home pay now The key is being honest about your expected annual income. If you'll owe taxes for the year, claiming exempt is tax fraud, even if it's just for December. The IRS doesn't care that you need more cash for the holidays - they care about accurate withholding based on your actual tax situation. Better to adjust your withholding legally than risk penalties and a massive tax bill later.

FreeTaxUSA actually handles these retirement plan situations really well. I've had a similar setup with multiple retirement accounts including a non-qualified supplemental plan for years. One thing to watch for - make sure when entering your W2, you click the "additional information" section to enter Box 11 data. Some tax software hides the less common boxes and if you don't specifically look for them, you might miss entering that information. Also, if you're concerned about FICA taxes, remember that contributions to qualified plans like 401k reduce your FICA wages, but contributions to non-qualified plans (probably your supplemental retirement plan) do not reduce FICA wages. That's just how the tax code works.

I went through something very similar last year with my university benefits package! The key thing to understand is that Box 11 and Box 2 serve completely different purposes - comparing them directly doesn't really make sense. Box 11 shows distributions from your Supplemental Retirement Plan (which is likely a non-qualified deferred compensation plan), while Box 2 is just the federal income tax that was withheld from your paychecks throughout the year. The Box 11 amount represents actual money you received from the plan, which is why it can be much larger than your tax withholding. For FICA taxes, here's what matters: your regular 401k contributions reduce your FICA taxable wages, but your Supplemental Retirement Plan contributions typically don't. This is because non-qualified plans are subject to FICA taxes when you earn the money, not when you receive distributions later. When entering everything in FreeTaxUSA, make sure you input all the boxes from your W2 accurately - the software is designed to handle these multiple retirement plan scenarios correctly. The Box 11 amount should already be reflected in your Box 1 wages, so you won't be double-taxed on it. Your situation sounds completely normal for someone with multiple retirement benefits through a university!

One thing to consider that hasn't been mentioned yet - if you do decide to get married, make sure to update your W-4 withholdings at work! Many couples forget this step and end up owing money at tax time or getting a huge refund (which means you gave the government an interest-free loan all year). With your combined income of $120,000 and a baby on the way, your tax situation will be quite different than when you were both single. The IRS has a good withholding calculator on their website, or you can use the new W-4 form which has been redesigned to be more accurate for married couples. Also, don't forget about Dependent Care FSA if either of your employers offers it - you can set aside up to $5,000 pre-tax for daycare expenses once the baby arrives. This is separate from the child care tax credit and can provide additional savings!

Great advice from everyone so far! As someone who works in tax prep, I'd add one more consideration that often gets overlooked - timing your wedding date strategically within December if you do decide to get married this year. Since your tax filing status is determined by December 31st, you could literally get married on December 31st and still file as married for the entire 2024 tax year. This gives you almost the full year to see how your finances actually play out before making the commitment. Also, with a baby due in May 2025, consider that you'll be eligible for the Child and Dependent Care Credit starting in 2025 if you have childcare expenses. This credit can be worth up to $2,100 for one child (20-35% of up to $8,000 in expenses, depending on your income). Combined with the Child Tax Credit of up to $2,000, having a child provides significant tax benefits. One last tip: if you do get married, make sure both of you understand the "kiddie tax" rules won't apply here since we're talking about your own child, but do keep documentation of all baby-related medical expenses throughout 2025 - some may be deductible if they exceed the threshold for medical expense deductions.

One thing to consider is that the situation might get more complicated if your royalty income continues to grow. Once you start getting into larger amounts ($10k+), some US companies get more strict about tax compliance. I'm a composer in Brazil and my initial small royalty payments were handled exactly like yours - no withholding, no forms. But when I had a track used in a popular show and my payments jumped to $12k, suddenly the distribution company got very concerned about proper documentation! They retroactively requested W8-BENs and threatened to withhold 30% from future payments until I complied.

This is actually a really important point about being proactive before your income grows. I'm a songwriter in the UK dealing with something similar - started small with streaming royalties but now getting sync placements that are pushing my US income much higher. What I learned is that even though the treaty protects you from owing tax, you still want to establish proper documentation early. I sent W8-BEN forms to all my US distributors even when they hadn't asked, and kept certified mail receipts as proof. When my income jumped last year and they suddenly got worried about compliance, I already had everything in place. The key is not waiting for them to figure out their obligations - take control of your own documentation. It's much easier to send the forms now when the amounts are smaller and there's no pressure, rather than scrambling when they panic over larger payments and threaten to start withholding at 30%.