Thanks for this explanation! I went back and checked our paystubs from this year vs last year and you're totally right. We're getting about $280 more per month in our paychecks compared to last year. That adds up to around $3,360 for the year, which almost exactly accounts for the difference in our refund. I guess I never noticed the slightly larger paychecks since it wasn't a huge difference per pay period, but it definitely adds up over the year! This makes me feel so much better. We might still adjust our W4 to get a slightly bigger refund next year since we like having that forced savings, but at least now I understand what happened.

I think they mean their W4 withholding at work is set to HOH, not their actual filing status. That's actually a common mistake - people have their withholding set wrong all year and then file with their correct status.

Thanks for the heads up about the potential fee. Did you end up paying it or is there a way around that? I've already had 3 pieces of mail go missing in the last two months so I wouldn't be surprised if my W-2 doesn't make it either.

I ended up paying it because I needed my W-2 urgently and didn't have time to fight about it. But technically, employers are required by law to provide your W-2 without charging fees, so you could push back on that if they try to charge you. I'd recommend setting up informed delivery with USPS if you haven't already. It sends you daily emails with scans of mail that's supposed to arrive that day, so at least you'll know if your W-2 was processed through the mail system.

Be careful with this advice! Filing with Form 4852 before giving your employer a reasonable amount of time can create problems. The IRS expects you to make a serious effort to get your W-2 first, and filing with estimated numbers that later turn out wrong can lead to having to file an amended return.

Wait, does that mean if I'm getting 1099s as an extra I'm being misclassified? I've been paying self-employment taxes for years but the production companies totally control everything about my work!

You might indeed be misclassified. The IRS uses a control test - if the company controls what you do and how you do it, you should generally be classified as an employee (W-2), not an independent contractor (1099). For film extras, since the production tells you exactly when to show up, what to wear, where to stand, when to move, etc., you typically meet the definition of an employee. Some production companies misclassify extras as independent contractors to save on payroll taxes, but this isn't usually correct under IRS guidelines. If you believe you're misclassified, you can file Form SS-8 with the IRS for a determination, though be aware this might create tension with companies that hire you.

Wow thank you!!! I just checked my W-2 and there's almost $500 in box 2! I had no idea I might get that back. I'm definitely filing now!

You can still claim refunds for up to 3 years after the filing deadline! If your mistake was within the last 3 years, you can still file for those years and get your money.

Thanks for mentioning insurance! What's a ballpark figure I should expect to pay for decent coverage as a solo preparer? And are there specific coverage amounts you'd recommend?

For a new solo preparer with no prior claims, expect to pay between $500-800 annually for a basic policy with $100,000 in coverage. I'd recommend starting with at least $250,000 in coverage if you can swing it, especially if you'll be doing anything beyond basic W-2 returns. As your practice grows and you take on more complex returns like business filings, you'll want to increase coverage to $500,000 or more. Many policies also include coverage for representation costs if a client is audited, which clients really appreciate. Some insurers offer monthly payment options which helps with cash flow when you're just starting out.

Flat rate all the way. Clients hate surprises with billing. I have a menu of services with set prices based on form complexity. Like $350 for basic returns, $500 with Schedule C, etc. Then add-ons for extra schedules. Much easier to market and clients know exactly what they're getting.

Actually I did start a small side business this year that lost about $3,800, and I sold some long-term investments that had gained around $4,200. I wonder if those mostly canceling each other out contributed to this situation.

That explains it perfectly! Your capital gains from the investments were likely offset by your business losses. Since they were long-term gains, they're taxed at a different rate than ordinary income, but the business loss can offset both types of income. Your tax preparer did a good job navigating this. If you're planning to continue the side business, you might want to talk to them about estimated tax payments for next year, especially if you expect the business to become profitable. This break-even situation probably won't repeat unless you have a similar pattern of gains and losses.

100% agree! I've been adjusting my withholding for years to get as close to zero as possible. Put the difference in a high-yield savings account throughout the year instead of giving the government an interest-free loan.