OMG I think you just solved it! I just checked our W-2s and his does show "Single" for the withholding rate even though we've been married for 3 years! That explains why we went from refund to owing when I added his income. Do we need to file a new W-4 with his employer to fix this for next year?

Yes, you'll need to submit a new W-4 to his employer right away to correct this for the current tax year. Make sure you select "Married filing jointly" on the form and consider if you need additional withholding in section 4(c) to cover any potential shortfall. For this year's taxes, unfortunately you'll still need to pay what you owe based on the incorrect withholding. But fixing the W-4 now will prevent the same problem next year. Also, double-check both your W-4s annually - employers sometimes make mistakes or don't update their systems properly.

Last year I calculated both ways and filing jointly saved us about $2,300 because of the tax credits we would have lost filing separately. Definitely worth running both calculations!

I used TaxAct last year and it was decent but I found their state filing was more expensive than FreeTaxUSA. Is TaxSlayer any cheaper for state returns?

TaxSlayer's pricing is pretty competitive. Their basic federal filing is free for simple returns, and state returns are around $39.95 each. Not as cheap as FreeTaxUSA's state filing, but still better than TurboTax or H&R Block. TaxAct's state returns are indeed a bit pricier - I think they're around $44.95 now. The advantage with TaxSlayer is their interface is simpler and they offer more free features in their basic version compared to some competitors.

OMG THANK YOU! Just tried and got in! Guess I'll be staying up late tonight finishing this return before it goes down again 😅

Not a stupid question! You file Form 4868 which you can do electronically through most tax software or the IRS Free File program. It takes like 5 minutes tops. The important thing to know: an extension gives you more time to FILE (until October 15), but NOT more time to PAY if you owe. So if you think you might owe, you should estimate and pay that amount when you file the extension to avoid penalties and interest.

Thanks for explaining! That makes sense about it being an extension to file not pay - didn't realize that distinction. I'm pretty sure I'll get a refund based on my withholding but I'll probably still file the extension just to be safe. Will check out the Free File options tonight.

But what happens if you *think* you're getting a refund but actually end up owing? Doesn't the IRS hit you with huge penalties if you file late without an extension and owe them money?

You're absolutely right to ask that! If you end up owing instead of getting a refund, and you didn't file an extension, you'd get hit with both failure-to-file and failure-to-pay penalties from the original due date. The failure-to-file penalty is much steeper (5% per month up to 25%) compared to failure-to-pay (0.5% per month). That's why I always made VERY sure I was getting a refund before skipping the extension. I had very simple taxes and always had way more withheld than necessary. For most people with more complex situations, filing the extension is definitely the safer move if you can't file on time.

Thanks for explaining this! So I won't actually lose money by making more, I'll just need to make sure I'm withholding enough to cover the higher bracket on that additional income? That makes me feel better about pursuing the second job.

Exactly! You'll never lose money by earning more. You'll always take home more net income even if the last dollars you earn are taxed at a higher rate. The key is just making sure your withholding is set up correctly so you don't get surprised at tax time. Either ask your second employer to withhold at the "Single, No Deductions" rate (which withholds at a higher rate) or specifically request additional withholding on your W-4 form. The IRS website has a good withholding calculator that can help you figure out the right amount.

Good point! I'm in California and when I worked two jobs, I got absolutely hammered on state taxes. I thought I had the federal part figured out but completely overlooked the state portion.

Yeah, it's easy to forget about state taxes. Each state has different brackets and rates too, so you really need to look at your specific state's tax system. Some states have flat taxes where this is less of an issue, but states with progressive brackets (like California, New York, etc.) can really add up when you have multiple income sources.

Wouldn't that be tax fraud though? You can't just choose to be a contractor vs employee based on what's better for taxes. The IRS has specific rules about who qualifies as an employee vs contractor, right?

You're absolutely right to bring that up. Converting from employee to contractor isn't just a choice for tax benefits - it has to reflect a genuine change in your working relationship with the company. The IRS looks at factors like control (how, when and where you work), financial aspects (who provides equipment, how you're paid), and relationship factors (benefits, permanency). If nothing changes except your tax classification, that would indeed raise red flags with the IRS. My situation involved a legitimate restructuring of my role and responsibilities with much more independence in how I complete projects.

Which states still allow the home office deduction for employees? I'm in California and would love to know if that's an option.