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This happens to almost everyone with multiple jobs. Each employer calculates your withholding as if that's your ONLY job, so they're withholding at a lower rate than what you actually owe when everything is combined. Tips make it even worse because they're often under-withheld. Even requesting that extra 10% might not have been enough depending on your total income. Next year, consider filling out a new W-4 and checking the box for multiple jobs, or even request specific additional dollar amounts to be withheld from each paycheck.
Would it be better to just set aside money myself instead of having the employer withhold extra? I'm trying to figure out the best approach for next year so I don't get shocked again.
Having your employer withhold the correct amount is usually better than setting aside money yourself. When employers withhold, it's done systematically throughout the year, which helps you meet the IRS's requirement for paying taxes as you earn income. If you choose to set aside money yourself, you'd technically need to make quarterly estimated tax payments to avoid potential underpayment penalties. Many people find it simpler to just adjust their W-4 to have the right amount withheld automatically. The IRS Withholding Calculator can help you figure out the right amount to list on your W-4 forms for both jobs.
Has anyone else noticed that tax prep software kinda creates this problem? They show you that big refund after one W-2 which gets your hopes up, then it crashes when you add everything. Maybe they should warn you that the number isn't final until ALL income is entered!
Just to add another perspective as someone who went through this last year - make sure all your Robinhood transactions match exactly what's on your 1099-B. Watch out for wash sales especially (selling at a loss and buying back within 30 days), as those can affect your reported basis. FreeTaxUSA should handle Form 8453 electronic substitute, but double-check that all your transactions from Form 8949 are properly included. The software will generate everything, but garbage in = garbage out, so the accuracy of what you enter matters.
What happens if you do have wash sales? Do you need to file anything extra for those?
You don't need to file anything extra for wash sales. Your 1099-B from Robinhood should already mark those transactions as wash sales and adjust the cost basis accordingly. When you enter this information into FreeTaxUSA, make sure you include that adjusted basis figure exactly as shown on your 1099-B. The tax software will handle all the proper coding and reporting. Just be aware that wash sales can reduce your claimed losses for the year, which sometimes surprises first-time investors who don't realize these transactions are treated differently.
One thing nobody mentioned - if you traded crypto in addition to stocks, that's a whole different situation and you might actually need additional reporting. Did you have any crypto transactions last year?
No, thankfully I only did regular stocks through Robinhood. I was thinking about getting into crypto but decided to wait until I understood investing better. Based on all these comments, sounds like that was a good choice for keeping my taxes simpler! Thanks everyone for the help! I feel much better about continuing with FreeTaxUSA now that I understand Form 8453 isn't something I need to worry about for my situation. I'll double-check all my entries from the 1099-B to make sure everything matches up exactly.
Have you checked your tax transcript? Sometimes that has more info than the Where's My Refund tool. You can access it through your IRS online account.
No I haven't checked that! How do I find my tax transcript? Is it different from the Where's My Refund tool?
Yes, it's completely different and often more helpful. Go to IRS.gov and create an account (or log in if you already have one). Then look for "Get Transcript Online" and select the account transcript for 2024. The transcript has a bunch of codes that show exactly what's happening with your return. Look for code 846 which means your refund has been issued. If you see code 570, that means there's a hold on your account. There are lots of guides online explaining what the different codes mean.
i filed february 22 with 3 kids and just got my refund yesterday. hang in there, its taking forever this year! my sister filed a week before me and still hasnt got hers so theres no real pattern to how they're processing them
Thanks for sharing your experience! That makes me feel a little better. Did you do anything special to finally get yours approved or did it just suddenly go through?
nothing special, just checked the app one day and it finally showed approved! honestly i had given up checking everyday and was just looking once a week. seems completely random how they're processing returns this year!
Just to add some practical advice from someone who files hundreds of 1099s every year: If you're filing paper forms, you definitely need a new 1096 for any additional 1099-NECs you're sending in. This isn't a correction - it's a new submission. If you're e-filing through a system like the IRS FIRE system, the process is different and the software handles the transmission details for you. Most modern tax software is designed for e-filing these days, which might explain why ATX is handling it the way it is.
Do you know if there's a limit to how many additional submissions you can make? I feel like I'm constantly finding new contractors that need forms throughout January and February.
There's no limit to how many submissions you can make. I've had clients who end up making 3-4 separate submissions as they discover missed contractors. The IRS just wants the information reported - they don't penalize you for making multiple submissions. Just make sure all your 1099-NECs are filed by the deadline (typically January 31st). After that date, any new filings could be subject to late penalties regardless of how many previous batches you submitted on time.
Something nobody has mentioned yet is that if you're correcting information on a previously filed 1099-NEC (like changing the amount or the contractor's information), that's when you'd check the "CORRECTED" box on the 1099-NEC itself. The 1096 accompanying these corrected 1099s doesn't get marked as corrected though. Adding a brand new contractor is completely different - that's just a new submission with its own 1096, like others have said.
Everett Tutum
My bank was asking for my TIN for some savings account paperwork and I gave them my social security number. They said that was correct but then started talking about backup withholding and I got confused. Are those things related??
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Misterclamation Skyblue
ā¢Yes, they're definitely related. Banks are required to get your TIN (your SSN in this case) for tax reporting purposes. The backup withholding you heard about happens if you don't provide a TIN or if the IRS notifies the bank that you provided an incorrect TIN.
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StarStrider
Another tip: If you have a tax preparer or use tax software like TurboTax or H&R Block, all your tax ID info is usually saved in your account. Might be easier than digging through paper documents if you filed electronically in previous years.
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Ravi Gupta
ā¢Which tax software do you recommend that's actually affordable? I used FreeTaxUSA last year but wasn't super impressed with how they handled my 1099 income.
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