Trust assets only avoid the 9-month estate tax filing if they're in an irrevocable trust established well before death. If your dad had a revocable living trust (the most common kind), those assets are still considered part of his taxable estate. But with $850k total value, you're nowhere near the federal filing threshold anyway.

I'm sorry for your loss, Lucas. Dealing with estate matters during grief is incredibly challenging. Based on what you've shared, with an $850,000 estate value, you're well below the federal estate tax filing threshold of $13.61 million for 2025, so you likely won't need to file Form 706. However, don't overlook these important steps: 1) File your father's final income tax return (Form 1040) for 2025 by April 15, 2026, 2) If the estate generates any income after his death, you may need to file Form 1041, and 3) Even though you're in Texas (no state estate tax), you'll still need to handle property transfers through the county. Regarding the trust - if it's a revocable living trust (most common), the assets are still considered part of his estate for tax purposes, but the trust should help you avoid probate proceedings. Make sure all assets were properly titled to the trust before his passing, as any assets not in the trust may need to go through probate. Consider consulting with a probate attorney for at least one session to ensure you're handling everything correctly - it could save you significant headaches later.

Just to add on to what others have said - the 2025 W4 doesn't even have allowances anymore like the old form did. It's structured completely differently now. You need to fill out the multiple jobs worksheet if you have more than one job, or the deductions worksheet if you have a lot of deductions. The form is actually easier to use now but claiming exempt still has the same requirements - you need to have had NO tax liability last year and expect NONE this year. At $68k, you definitely don't qualify.

Hey Miguel! I was in almost the exact same situation as you - making around $70k, getting huge refunds, and wanting more money in my paychecks. Definitely don't claim exempt though - that's only for people who literally owe zero taxes, which definitely isn't the case at your income level. What worked for me was using the IRS Tax Withholding Estimator (it's free on irs.gov) to figure out exactly how to fill out my W4. Since you're single with no kids and just have student loans, it should be pretty straightforward. You'll probably want to claim the standard deduction and maybe add your student loan interest deduction if you pay interest on those loans. The key is using Step 4 on the W4 - you can reduce your withholding there without going all the way to exempt. I ended up putting about $2,000 in the deductions section (Step 4b) which increased my take-home by about $150 per paycheck. Still got a small refund of around $400 instead of the $3,000+ I was getting before. Just be conservative with your first attempt - you can always adjust it again if needed!

Something else to consider - if you received health insurance continuation as part of your severance, that might have different tax implications. When I got laid off, my company paid for 3 months of COBRA coverage as part of my package, and that ended up being taxable too, which I didn't expect. Also check if any part of your severance was for unused PTO/vacation time, as some states have specific rules about how that's taxed. In my case, the unused PTO portion was taxed as regular wages, but the actual severance had different withholding.

Make sure you check if any part of that severance was designated as a "supplemental wage" - things like severance are sometimes withheld at a flat 22% federal rate, which might not be enough depending on your tax bracket. I got hit with a surprise tax bill because of this! Also, did they give you any outplacement services or career counseling as part of the package? Those can be non-taxable benefits if structured properly.

Another thing to consider - if you end up having to make the payment again while this is being sorted out, make sure to request abatement of any penalties and interest when you file your tax return. The IRS has a "reasonable cause" exception for situations like this. Form 843 is what you'd use to request abatement, and you'd include all your documentation showing you attempted to make the payment on time. I've seen cases like this where the IRS approved the abatement because it was clearly the payment processor's fault, not the taxpayer's.

I'm going through something very similar right now with a different payment processor! Reading through all these responses has been incredibly helpful. I used DirectPay to make a $4,200 estimated payment back in February and it's been missing for over 8 weeks now. What's really frustrating is that these third-party processors charge convenience fees (I paid an extra $35) but then can't even guarantee the payment actually reaches the IRS. At this point I feel like paying directly through the IRS website is the only safe option, even though their system is clunkier. I'm definitely going to try the bank dispute route based on what others have shared here. Has anyone had success getting the convenience fees refunded too when disputing these charges? It seems unfair to pay extra for a "service" that didn't work. Also planning to file complaints with both the BBB and CFPB as suggested. These payment processors need to be held accountable for these systemic issues that are clearly affecting multiple taxpayers.

Before you drive yourself crazy trying to figure this out, do what I did and use taxr.ai to decode your transcript. I tried for weeks to understand why I suddenly had a balance due on my taxes and this tool explained it all in normal human language. Turns out I had a calculation error in my original filing and they actually explained what happened and what I needed to do. Worth every penny.

Hey Mei! I went through something very similar with my NY state taxes last year. That "balance due" definitely caught me off guard too, especially when I was expecting a refund. In my case, it turned out to be a combination of two issues: 1) NY didn't properly credit all my quarterly estimated payments I made, and 2) there was a small miscalculation on my return that I hadn't caught. My advice is to definitely NOT pay that $347 right away. First, log into your account and look for any section that shows "account activity" or "payment history" - you want to verify that all your withholding from your W-2 actually got applied to your account. Sometimes there are delays or processing errors. Also, compare the "taxes assessed" amount on your transcript to what you calculated when you filed. If there's a difference, that's your clue that either you made an error or they did. The good news is that even if you do owe the money, NY gives you time to pay without huge penalties as long as you address it reasonably quickly. But definitely verify first - their system makes mistakes more often than you'd think!