Just double checked my pay stub and it definitely doesn't say "Exempt" anywhere. It shows they're withholding about $360 per paycheck for federal taxes. Our payroll is handled through ADP, so I assume they're using updated withholding tables? But maybe not. Would it be weird to directly ask my HR person if they're annualizing my income for withholding purposes?

Not weird at all to ask HR about the withholding calculation method. That's a perfectly reasonable question. Just frame it as "I'm trying to understand why I keep owing at tax time despite having taxes withheld." ADP should be using current tables, but the issue might be how your specific company has configured their ADP settings. Some companies, especially smaller ones, don't always update their payroll configurations when tax laws change. Ideally, they should be using the aggregate method of withholding which considers your annual income rather than just calculating each paycheck in isolation.

This is honestly the easiest solution. The withholding system is never going to be 100% accurate for everyone. I'd rather get a small refund than owe money. I do $75 extra per paycheck and it works perfectly for me.

That's probably what I'll end up doing. I'd rather get a small refund than deal with this stress every year. Based on what others have said, sounds like I need about $130 extra per paycheck. I'll just round up to $150 to be safe. Thanks everyone for all the advice! Going to fill out a new W-4 tomorrow and talk to HR about making sure they're using updated withholding calculations.

That's really encouraging to hear. How long did the whole process take for you from filing the back returns to getting the Offer in Compromise accepted?

The entire process took about 14 months from start to finish. The first part - gathering all my documentation and filing the back returns - took about 2 months. Then I submitted the Offer in Compromise application, which took another 2 months to prepare properly with all the required financial information. After submission, the IRS review process took about 10 months, including some back-and-forth with the assigned officer who was evaluating my case. There were a couple of requests for additional documentation during that time. It wasn't quick, but considering how much I saved in the end, it was absolutely worth the wait and effort. Just be prepared for a marathon, not a sprint.

This is good advice. Also, send everything via certified mail so you have proof of when you submitted each return. Helps a ton if there are ever questions about timing.

Thank you so much for these detailed steps! I couldn't find the option anywhere in the normal flow but your method worked perfectly. I was able to enter both my 1098-Ts and H&R Block calculated the correct amount for both American Opportunity Credit and Lifetime Learning Credit. Did you have any issues with the IRS questioning the multiple education credits when you filed? I'm a bit worried they might flag my return or something.

I didn't have any issues with the IRS questioning my return. As long as you have legitimate 1098-Ts from accredited institutions and you meet the eligibility requirements for the education credits, having multiple schools isn't a red flag by itself. Just make sure you're not double-counting any expenses or claiming the same type of credit twice if that's not allowed. The key thing is being clear about which expenses apply to which credit. If you're eligible for both the American Opportunity Credit and Lifetime Learning Credit, you might need to strategize which expenses to apply to each for maximum benefit.

I can confirm this! I switched to the desktop version specifically because of this issue. The desktop software has a very clear "Add Another Institution" button right on the education screen. The online version hides this functionality for some reason.

So does this apply to crypto transactions too? I have a similar situation where I couldn't figure out some carryover basis amounts from previous years.

Crypto is actually handled differently in some ways. The IRS treats cryptocurrency as property rather than securities, so while you still report gains and losses, the AMT adjustments work differently. For crypto, accurate basis reporting is even more important because the IRS has been focusing enforcement in this area. If you can't determine your exact basis from previous years, you should try to make a good faith estimate based on transaction records. The Schedule D AMT carryovers would only apply if you had specific AMT adjustments in previous years related to your crypto trades.

Try FreeTaxUSA next year. I switched from TurboTax two years ago and never looked back. Only $15 for state filing and federal is completely free. They handled all my stock transactions perfectly, including those weird AMT adjustments.

22 That's a great point I hadn't considered. So even if I get a smaller refund filing jointly, I might still be paying less taxes overall?

11 Exactly! The refund is just the difference between what you already paid throughout the year and your final tax bill. A smaller refund with a lower total tax bill is better than a bigger refund where you paid more tax overall. For example, if you paid $15,000 in taxes throughout the year and your actual tax bill is $13,000, you'd get a $2,000 refund. But if you paid $10,000 throughout the year and your tax bill is $9,000, you'd only get a $1,000 refund - but you'd have paid $4,000 less in taxes overall ($9,000 vs $13,000)!

14 Do the advance Child Tax Credit payments still exist? I thought those were just a COVID thing and they stopped doing them in 2022?