Thank you for the specific calculation - that's really helpful! So if I'm understanding correctly, the issue is two-fold: my regular paychecks have too little withheld AND my bonuses should have 22% federal tax taken out but have zero instead? Would requesting the additional withholding on regular paychecks be enough to cover both problems?

Yes, your understanding is correct - you have two separate withholding problems happening simultaneously. Your regular paycheck withholding is likely calculated based only on your base salary, not accounting for the additional income from bonuses. And then your bonuses should have 22% federal withholding but have zero. The additional withholding I calculated would only cover the missing withholding from your bonuses going forward. You'll also need to address the underwithholding on your regular paychecks. I'd recommend talking to your payroll department first to get the bonus withholding fixed, then use the W-4 additional withholding to cover any remaining gap. You may also need to save some money to cover what's already been underwitheld so far this year.

This happened at my company too! When I brought it up to HR they got super defensive. I ended up comparing paystubs with colleagues and found out they were underwithholding for everyone. The company eventually had to send out an email explaining the "payroll configuration adjustment" but never admitted fault.

I never thought about it being deliberately misconfigured... that's concerning. I'll definitely ask around to see if my coworkers are experiencing the same thing. The company has been growing really fast so it could be an oversight, but either way I need to get it fixed. I appreciate everyone's advice - I'll update after talking to HR!

That's interesting! I've actually been thinking about doing some financial consulting on the side. How much of a side business do you need to have for this to be legitimate? And do you need to form an actual LLC, or could you just report the income on a Schedule C?

You don't necessarily need a formal LLC - that's just what I chose for liability protection. You can absolutely report side business income and expenses on Schedule C as a sole proprietor without forming any legal entity. As for how much business you need, there's no specific threshold, but the IRS does look for a profit motive. Generally, if you show a profit in 3 out of 5 years, they consider it a legitimate business rather than a hobby. Start tracking all business mileage from day one with a good app or logbook, noting the date, starting/ending mileage, purpose, and client. Just make sure you're only deducting the portion used specifically for your side business, not your main employment.

For leases, you can actually use either method (standard mileage or actual expenses), but there's a catch: if you choose standard mileage in the first year, you can switch between methods in later years. But if you use actual expenses in the first year, you're stuck with that method for the duration of the lease. Most people find the standard mileage rate (65.5 cents per mile for 2023) simpler since you just track miles rather than every expense. But actual expenses might be better for luxury vehicles or in high-cost areas. Do a calculation both ways for your first year to see which gives you the bigger deduction.

I've used Form 4852 twice when employers either sent incorrect W2s or I couldn't obtain them. Both times went smoothly - the IRS did not audit or question the returns. Just make sure your estimates are reasonable and as close as possible to the actual amounts. Using your final pay stub is the best approach since the YTD figures should be very close to the W2 amounts.

Does this Smart Worksheet trick work for finding other hidden forms too? I'm new to Proseries and still learning all the shortcuts.

Yes! The Smart Worksheet search is actually the fastest way to find any form in Proseries. It works for pretty much everything - just type the form number or even keywords like "depreciation" or "health insurance" and it pulls up relevant forms and input screens. For new Proseries users, I also recommend using the "Recent Forms" dropdown which shows the last 10-15 forms you've accessed. Between these two features, you'll rarely need to dig through the regular menus once you get comfortable with the software.

I had the same issue last week. There's actually a known bug in the current version that affects the PTC calculation if you enter the information through certain screens. Try entering it directly through Form 8962 instead of the Federal Information Worksheet and see if that fixes it.

Do you know if we have to use FIFO for crypto? I thought we could choose specific identification method if we wanted to? My tax software lets me pick which coins I'm selling when I have multiple lots.

You're right that you can use specific identification methods instead of FIFO for crypto - I should have been more clear. What my accountant stressed was that once you choose a method (whether FIFO, LIFO, or specific identification), you should apply it consistently for all your crypto transactions. If you're using specific identification, you need even more detailed records that clearly show which specific units you're selling. This might be harder with a defunct exchange, but if you have transaction IDs or other ways to specifically identify the units, you can use that method. The tax software that lets you pick which coins you're selling is using the specific identification method, which is perfectly acceptable as long as you have adequate records to support it.

Thanks for sharing your experience. I do have screenshots and bank transfers showing the money going to the old exchange. My biggest worry was that my records wouldn't be "official" enough since they're not from the exchange itself. Sounds like personal records can work as long as they're reasonable and consistent with market prices at the time?

Exactly! Your personal records are completely valid as long as they're reasonable. The key things IRS looks for if they question it are: 1) Do the purchase dates match up with when you actually had access to those funds? 2) Do the prices align roughly with market prices on those dates? 3) Is there a paper trail showing money actually moving to exchanges? Since you have screenshots and bank transfers, you've got solid evidence. In my case, I created a simple spreadsheet showing each transaction, the date, price paid, and quantity, then attached copies of my screenshots and bank statements. I also included a brief explanation about Voyager's bankruptcy. The whole process was much less stressful than I expected. Just be honest, document everything, and you'll be fine.