That's actually a really good point I hadn't thought about. I did fill out a new W-4 when our company changed payroll providers last March. I should check my recent paystubs to see if the withholding amounts look right. Do you know if there's an easy way to calculate what my proper withholding should be?

The IRS has a Tax Withholding Estimator tool on their website that's pretty helpful. You enter your income, filing status, dependents, and some other basic info, and it tells you how to fill out your W-4 for the right amount of withholding. If you find that your employer made an error in processing your W-4, definitely talk to your payroll department right away to fix it for this year. Unfortunately, that won't help with what you owe for 2024, but at least you won't have the same problem next year.

That makes sense about refunds just being your own money. I guess I've always used tax refunds as a forced savings plan, so it was a shock to owe instead. How do you figure out how much to pay for quarterly estimated taxes? Is there a simple formula or percentage I should follow for freelance work?

For quarterly estimated taxes, a safe harbor approach is to pay either 100% of last year's tax liability (110% if your income is over $150,000) or 90% of your current year's anticipated liability, whichever is less. This helps you avoid underpayment penalties even if your income fluctuates. For freelance work specifically, a rough calculation is to set aside about 30% of your net profit for taxes - this covers both income tax and self-employment tax. The actual amount varies based on your total income, filing status, deductions, etc. The IRS Form 1040-ES includes worksheets to help calculate the exact amount, or you can use tax planning software to get more precise figures.

Were there any differences between your return and your brother's? Like did you claim any credits or deductions that he didn't? Sometimes certain things trigger additional review.

What kind of documentation do you need exactly? My divorce was in 2016 and I've been deducting alimony, but I'm always paranoid I'm doing it wrong.

You should keep copies of canceled checks, bank statements, or other proof of payment that clearly shows the amounts and dates. I also keep a yearly summary log that matches my payment records. Make sure you have your divorce decree handy too, since it specifies the alimony amounts. You'll need your ex's Social Security Number for Form 1040 (the recipient is required to provide it). If you're using tax software, it will specifically ask for this information in the alimony section. Just don't confuse any child support payments with alimony - only the alimony portion is deductible for pre-2019 divorces.

Unfortunately, you've been deducting incorrectly. The law is very specific about the cutoff - the divorce or separation agreement must have been executed before January 1, 2019. Since yours was finalized in February 2019, you fall under the new rules. I would strongly recommend consulting with a tax professional about amending your previous returns. You may owe back taxes plus potential penalties for the incorrect deductions.

How does the IRS determine if you qualify for an Offer in Compromise? I owe about $6k and honestly would struggle to pay even $50/month right now.

The IRS looks at your ability to pay, income, expenses, and asset equity. They basically want to see if you can reasonably pay the full amount through a payment plan or if your financial situation makes that impossible. For the pre-qualifier tool, you'll need to enter detailed information about your financial situation - income, expenses, assets, etc. The tool then calculates the minimum offer amount the IRS might accept. It's pretty thorough, so have your financial information ready. If you're struggling with $50/month payments, you might indeed qualify, especially if you have limited assets and high necessary living expenses.

NO! Do NOT ignore IRS certified letters! They don't just go away. If you ignore them, the IRS can eventually levy your wages, put liens on your property, or seize money from your bank accounts without going to court. Maybe you just got lucky or they're still working their way to your case.

Our temporary orders don't actually specify who can claim Emma for taxes. The final custody agreement is still being worked out. That's really helpful info about the benefits Jess would get - or not get - with zero income. I hadn't thought about that angle. Would the grandparents benefit more from claiming Emma than either of us since they actually have income?

Yes, with zero earned income, Jess wouldn't benefit much from many of the tax credits related to having a dependent child. Some credits like the Child Tax Credit are partially refundable, but without income, she wouldn't get the full benefit. The grandparents would likely benefit more than Jess would since they presumably have income. They could potentially claim dependency exemptions and other benefits. However, that doesn't mean they have the legal right to claim Emma - they would only have that right if neither parent claims her. Since you're actively involved and supporting Emma, you should definitely try to address this in your final custody agreement. Many agreements include specific language about alternating years for tax purposes, regardless of where the child primarily lives.

This is spot on advice. And don't wait until tax time to bring this up! Send an email or text now stating your intention to claim your daughter this year. That way they can't claim they didn't know.