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Here's what's actually happening with your situation: When you have multiple jobs, each job doesn't know about the others when calculating withholding. So they're each withholding as if that's your only income. For the small jobs that didn't withhold anything, they probably calculated that you'd be below the standard deduction if that was your only income. But when you combine all incomes, you end up in a higher tax bracket. So you haven't had enough withheld throughout the year to cover your actual tax liability. As for the dependent question - when you claim a child on your W4, you get more money in each paycheck throughout the year instead of in your refund. So your refund looks smaller, but you actually got the benefit already spread out over your paychecks!
So should she adjust her W4 at her main job to have MORE tax taken out to compensate for the other jobs not taking enough? And is there a way to calculate exactly how much extra to withhold?
Yes, exactly! She should submit a new W4 to her main employer asking for additional withholding to cover the taxes from her other jobs. The easiest way to calculate this is to use the IRS Tax Withholding Estimator on their website. It lets you input information from all your jobs and will tell you exactly how to fill out your W4. You'll want to complete Step 4(c) on your W4 form which allows you to specify an additional dollar amount to withhold from each paycheck. The estimator will tell you the precise amount needed based on your multiple income sources.
Wait I'm confused - so is she getting the child tax credit or not? If she claims her kid on her taxes isn't she supposed to get like $2000 for the child tax credit? Where is that money if her refund went down?
The child tax credit is still there, but it's being offset by her underwithholding from multiple jobs. She's getting the credit, but she also owes more tax than was withheld throughout the year. If she DIDN'T claim her kid, she'd owe even MORE money because she wouldn't get the child tax credit at all, plus she'd have potential penalties for inaccurate filing.
Just to add a bit more clarity on the Form 3903 situation - even before the Tax Cuts and Jobs Act suspended the deduction for non-military, there were strict time and distance tests. The distance test required your new workplace to be at least 50 miles farther from your old home than your old job was. The time test required working full-time for at least 39 weeks during the first 12 months after arriving in the new location. If this is a military-related move, definitely look into amending your 2022 return. If not, unfortunately the suspension applies through 2025, so you're out of luck at the federal level.
Does anyone know if this deduction is coming back after 2025? Or is it gone for good? I'm planning a move next year but maybe I should wait if this is coming back...
The current suspension of the moving expense deduction is set to expire after 2025, so technically it should return in 2026 unless Congress extends the suspension or makes the change permanent. However, tax laws are constantly changing, so I wouldn't base major life decisions like when to move solely on this potential tax benefit. Many provisions of the Tax Cuts and Jobs Act are scheduled to sunset after 2025, but it's impossible to predict which ones will be extended and which will revert. If the move makes sense for your career and life circumstances, I wouldn't delay it just for a potential tax deduction that may or may not be available later.
Has anyone successfully amended a tax return for a different reason? I'm wondering if it's worth the hassle. I think I messed up some deductions last year (not moving related) but I'm scared of triggering an audit.
When I got an LT38 last year, it turned out one of my 1099s didn't get reported correctly. Double check if you had any side income, investment transactions, or early retirement withdrawals in 2021 that might have been missed. Sometimes the simplest explanation is the right one! Also, call the Taxpayer Advocate Service at 877-777-4778 if you're struggling. They're an independent organization within the IRS that can help resolve issues. Completely free service that saved my butt when I was dealing with incorrect penalties.
I've heard mixed things about the Taxpayer Advocate Service lately. Aren't they super backlogged too? I tried contacting them about 3 months ago and still haven't heard back. Do they actually prioritize cases with pending levies like an LT38?
You're right that they're backlogged, but they do prioritize cases with imminent collection actions like levies. The key is to emphasize that you have an LT38 notice with a pending levy when you call. Also, while the main line might be backed up, try calling your local TAS office directly (you can find the number on the IRS website by searching "local taxpayer advocate" and your state). I had to be persistent, but once I got assigned an advocate, they resolved my issue in about 3 weeks. They're especially helpful if you can demonstrate that the standard IRS processes have failed you or if you're facing financial hardship because of the tax bill.
Don't ignore the LT38! I made that mistake and ended up with a bank levy that completely froze my checking account for almost 2 weeks. Even if you can't pay the full amount, responding to the notice stops the collection process while you work out a solution. The easiest option is an installment agreement - you can set this up online for debts under $50,000 at https://www.irs.gov/payments/online-payment-agreement-application. I'm currently paying $85/month on a similar tax debt. The interest and penalties continue to accrue, but at least you avoid levies and it's better than paying credit card interest rates.
That's terrifying about your bank account! I definitely don't want that to happen. Did you find that setting up the installment agreement online was pretty straightforward? And does the IRS typically approve reasonable monthly payment amounts or do they push for higher payments?
I'm surprised nobody mentioned this but if you file late without an extension, you're looking at penalties if you owe money. Like 5% of unpaid taxes for every month you're late, up to 25%. If you're getting a refund there's no penalty for filing late BUT you only have 3 years to claim your refund.
For the future, I learned my lesson and now I take pics of all my important tax docs with my phone as soon as I get them. Store them in a secure folder and you'll never lose them again, even if you move or misplace the paper copies.
This is good advice! There are also secure document apps specifically for this purpose that encrypt your tax documents. I started using one after having a similar issue a few years back.
Romeo Barrett
One thing nobody's mentioned yet - make sure you're aware that some credit card companies count tax payments as cash advances, not purchases! This happened to me last year and I got hit with cash advance fees AND didn't get points for the spending. Double-check with your specific credit card issuer before you do this. Most major cards like Chase, Amex, and Citi count tax payments as regular purchases, but store cards and some smaller banks might categorize them differently.
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Maggie Martinez
ā¢Oh wow, that's really good to know! I hadn't thought about that. I have a Chase Sapphire card - do you know if they treat tax payments as regular purchases? And is there any way to confirm this before I make the payment?
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Romeo Barrett
ā¢Chase Sapphire definitely treats tax payments as regular purchases! I've used my Chase cards for this exact purpose multiple times and always earned the points with no issues. You can confirm by either calling the number on the back of your card and asking directly, or check their terms and conditions. Most major card issuers also have this info in their FAQ sections online. Just search for "tax payments" or "government payments" in their help section.
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Marina Hendrix
Just wanted to drop a quick reminder that while using credit cards for tax payments can be great for bonuses, don't forget that the processing fee is NOT tax deductible for personal tax payments. It's only deductible if you're paying business taxes like self-employment tax.
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Justin Trejo
ā¢Are you 100% sure about this? I thought I read somewhere that credit card convenience fees could be deducted as a miscellaneous expense?
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