Slightly different question - I'm a union electrician and I get travel pay which is different from per diem. My company is also including that in my W-2 Box 1. Is travel pay also supposed to be non-taxable, or is that different from per diem?

This is such a common issue in construction! I went through the exact same thing with my roofing company last year. The key thing to understand is that your per diem CAN be non-taxable, but only if your employer is handling it as an "accountable plan." This means: 1) The per diem rates don't exceed federal GSA rates for your work locations 2) You provide adequate documentation of your travel (dates, destinations, business purpose) 3) You return any excess amounts you don't use If your company just gives you a flat $135/day regardless of where you travel, and some locations have lower federal rates, the excess becomes taxable. Also, if they don't require you to document your travel or return unused amounts, the IRS considers it a "non-accountable plan" and the entire amount becomes taxable wages. Check the GSA per diem rates for your specific work locations at gsa.gov/perdiem. If your $135/day exceeds those rates, or if your company isn't following accountable plan rules, then yes - it should be included in your W-2. But if everything checks out and it should be non-taxable, definitely push for a corrected W-2. Don't try to handle this on your tax return yourself - that's a red flag for audits.

Has anyone tried the IRS Direct File program this year? I heard they expanded it to more states for 2025 filing season. Wondering if it works better than dealing with OLT or TurboTax.

This is exactly why I always bookmark the official IRS Free File page (https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free) at the beginning of tax season. These companies count on people going directly to their commercial websites where they can charge for "premium" features. What's really frustrating is that OLT's marketing emails don't even mention that their completely free version is still available through the IRS portal. They're deliberately steering people toward their paid service. I fell for this exact trick with H&R Block a few years ago before I learned about the Free File program. Pro tip: If you qualify for Free File (AGI under $79,000 for most providers), bookmark that IRS page and ONLY access tax software through those links during filing season. Don't trust the "free" versions on company websites.

This is such a common issue this year! I'm a tax preparer and I've seen dozens of clients with the exact same situation - people who always got state refunds suddenly owing hundreds or even over $1000. The main culprits are usually: 1) State withholding table changes (which many states implemented without much fanfare), 2) Your freelance income pushing you into a higher state tax bracket or affecting credits, and 3) Loss of state tax credits due to income thresholds. For your $2,500 freelance income, you'll need to pay California state income tax on that amount (likely around 6-9% depending on your total income), plus it might have pushed you out of certain state credits or into a higher bracket for some of your other income. My advice: Pull up your prior year California return and compare it line-by-line with this year's. Look specifically at your state withholding amounts, any credits you claimed last year vs this year, and your effective tax rate. This will show you exactly where the difference is coming from. Also submit a new DE-4 form to your employer to increase your California withholding for next year - better to get a smaller refund than owe $780 again!

I'm dealing with this exact same situation! I'm in Texas and suddenly owe $520 to the state when I've gotten refunds for the past 4 years. Like you, nothing major changed - same job, same filing status. The only difference is I started doing some part-time tutoring that brought in about $1,800 throughout the year. What's really frustrating is that I compared my paystubs and my state withholding did seem slightly lower this year, but I just assumed it was because of some minor payroll system update. Now I'm wondering if Texas also changed their withholding tables like some of the other states mentioned here. I'm definitely going to try that line-by-line comparison suggestion from the tax preparer above. It's so annoying that these changes happen without clear communication to employees. Thanks for posting this - at least now I know I'm not the only one going through this!

Thanks everyone for the helpful responses! This clears up my confusion. I was hoping the IP PIN would simplify things but sounds like I need to be prepared for both. Really appreciate the detailed explanations - makes sense that they serve different security purposes even though it's frustrating to deal with multiple layers.

Just to add some clarity from someone who's been through this multiple times - the IP PIN is basically your "password" to file, while identity verification is like showing your driver's license. Even with the PIN, if the IRS system flags something unusual about your return (could be income changes, new deductions, etc.), they'll still ask you to verify. It's annoying but it's actually protecting you from having someone else successfully file a fraudulent return even if they somehow got your PIN. The good news is once you verify successfully, it usually gets easier in future years.

I'm experiencing the exact same thing! Verified my identity through ID.me 6 days ago and still have the "Action Required" message with completely blank transcripts. It's been such a stressful waiting game not knowing if everything is processing correctly. Reading through everyone's experiences here has been incredibly helpful and reassuring. The explanation about the manual processing queue really makes sense - I had no idea that after ID verification, returns have to be manually reviewed instead of being processed automatically. That explains why everything takes so much longer! I'm definitely going to try checking my transcript early Friday morning around 3-4am like some people suggested. I had no clue the IRS did their weekly updates at specific times like that. It's amazing how many of us are all dealing with this identical situation right now - really shows how backed up their system must be this year. Thanks for posting this question because I was starting to worry that I somehow messed up during verification or that my return got lost. The 2-3 week timeframe seems to be pretty consistent based on everyone's experiences, so I'll try to be patient. At least now I know this is totally normal and not something we did wrong!

I'm going through this exact same situation right now! Verified my identity about 10 days ago and still stuck with "Action Required" and completely blank transcripts. It's been driving me crazy wondering if something went wrong. After reading through all these experiences, I feel so much better knowing this is totally normal this year. The explanation about the manual processing queue really helps - I had no idea that after ID verification, returns have to be manually reviewed by actual people instead of going through the automated system. That completely explains why it takes 2-3 weeks! I'm definitely going to try checking my transcript at 3am on Friday like several people mentioned. Had no clue the IRS does their weekly updates at specific times like that. It's wild how many of us are all experiencing this identical timeline - really shows how backed up they must be. Thanks for posting this question because I was starting to think I messed up my verification somehow. The waiting is brutal but at least now I know it's completely normal and we just have to be patient while they work through the queue!