Thanks for this explanation. So even though I thought I was doing the same thing at both employers by selecting "0" allowances, they could actually be using totally different withholding calculations? Should I just ask for additional withholding on my W-4 to make up the difference?

Yes, that's exactly right. Even though you requested maximum withholding at both places, they could be using different calculation methods, especially if one used the pre-2020 W-4 format and the other used the new one. The best approach is to use the IRS Tax Withholding Estimator on their website, which will give you a personalized recommendation for your W-4. If you want a simpler solution, you can just request additional withholding on Line 4(c) of your W-4. Based on your numbers, adding about $125 per month in additional withholding should get you back to the refund level you were expecting.

Great idea! My company gives us access to an online portal where we can see all our deductions broken down by category. It shows pre-tax vs post-tax and which ones affect each box on the W-2. Made this a lot easier to understand when I had a similar issue.

I'll definitely try that. I just emailed my HR department asking for a breakdown of the deductions that make up the difference between Box 1 and Boxes 3/5. Hopefully they can explain exactly what's happening with these withholding calculations too. Thanks for the suggestion!

In your example, if I only can use $6,000 of the credit, do I lose the other $1,500 forever or can I carry it to next year?

Unfortunately, you lose the remaining $1,500 forever. The EV tax credit cannot be carried forward to future tax years. If you don't have enough tax liability to use the full credit in the year you purchase the vehicle, the unused portion is simply lost. This is why it's so important to understand your tax situation before making a purchase decision based on the credit.

Income itself doesn't directly determine your EV credit, but it does affect your tax liability, which determines how much credit you can use. If you make $40k, your federal tax liability might only be around $3-4k (depending on deductions, filing status, etc.), so you could only use that much of the $7,500 credit. At $100k income, your tax liability would likely exceed $7,500, meaning you could use the full credit.

Thanks for pointing this out! My wife does have an SSN since she's been working with her F1 OPT. Do you know if making this election means we'd have to keep filing jointly every year going forward? Or can we choose differently next year?

That's good she already has an SSN - that will make the process much smoother. Regarding future years, the election remains in effect for all future tax years until it's terminated. You can terminate it in several ways: either spouse can revoke it by filing a statement, it automatically terminates if either spouse dies, you get legally separated under a decree of divorce or separate maintenance, or the IRS can terminate it with notice to either spouse if they determine that information to determine tax liability is inadequate. So yes, you're essentially committing to joint filing going forward unless one of those termination events occurs. That's why it's important to consider the long-term implications before making the election.

I tried doing this in TurboTax last year and it was a nightmare. It technically can handle it, but you have to know exactly what you're doing. The software doesn't really guide you through the 6013(g) election process clearly. For the capital gains, you can manually enter them in TurboTax, but again, you need to know exactly where to put everything.

Do you know what the minimum monthly payment the IRS will accept is? I probably owe around $5000 across three years and there's no way I can pay that all at once.

The minimum payment depends on how much you owe, but generally the IRS will accept payments that would clear the debt within 72 months (6 years). For $5000, that would be around $70-100 per month depending on interest and penalties. If you can't afford what they initially propose, you can request a lower payment based on your financial situation. They have a form called 433-F that lets you show your income and expenses to justify a lower payment amount. The key is to request the payment plan upfront rather than waiting for them to come after you.

People rarely go to jail just for failing to file, especially if you're voluntarily coming forward to fix the situation. The IRS generally reserves criminal prosecution for cases involving fraud, tax evasion, or deliberate concealment. Coming forward voluntarily to file back taxes is actually viewed favorably by the IRS. They're much more likely to work with you on payment plans and might even be able to reduce some penalties if you show good faith by filing now.

That's good to hear. I've been stressing out about my own situation with missed filings. Gonna try to get caught up too.

Would that cause problems though? The payroll service will be reporting these payments separately to the IRS, right? I'm worried about entering them as estimated payments when they were actually employment tax payments specifically for Schedule H.

You're right to be concerned. I should have been more specific. In most tax software, there's a difference between "estimated tax payments" (which are for income tax) and "other payments" which can include employment taxes. Look for a section called "Other Federal Tax Payments" or similar, which is separate from your regular estimated tax payments. This is where you can specify that these were payments for household employment taxes. The payroll service should be filing Form 941 or 944 showing these payments, so as long as you categorize them correctly, there shouldn't be any conflict.

Which software finally worked for you? I'm using FreeTaxUSA and having the same problem with Schedule H and my housekeeper's payroll taxes.