That's a really good point I hadn't considered. Since I'm transitioning to W-2 soon, what's the best way to make sure enough is withheld? Should I just put "0" allowances on my W-4? And how much should I set aside from my remaining 1099 income for the rest of this year?

I'd recommend using the IRS Tax Withholding Estimator on their website to calculate exactly what you need for your W-4. With your student loans and other deductions, putting "0" might withhold too much and hurt your monthly cash flow when you're already tight. For your remaining 1099 income, the general rule is to set aside about 30-35% of your gross earnings for federal, state, and self-employment taxes. Since you're in a combined income situation with your husband's W-2, it gets more complicated, but that percentage should keep you safe. Make quarterly estimated payments on those earnings to stay compliant and avoid next year's penalties.

This is actually not entirely correct. The IRS can file a Federal Tax Lien even for amounts under $25k in some circumstances. Also, while being on a payment plan itself doesn't report to credit bureaus, if you default on your payment plan, it absolutely can impact your credit indirectly through collection actions.

Thanks for suggesting H&R Block. I actually tried their free version first before TurboTax, but they also wanted me to upgrade as soon as I entered my 1099-DIV information. Seems like most of the big companies use investments as a trigger for their premium versions.

That's frustrating! These companies are really aggressive with their upselling. Maybe try starting at the IRS Free File page (https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free) instead of going directly to the tax prep sites. Sometimes the versions you access through the IRS have fewer restrictions.

This is actually really good advice! I switched my small investments to a Roth IRA last year and it made my tax filing so much simpler this year. No more reporting tiny dividends and occasional stock sales.

6 How do you know if they're withholding at the right status? My W-4 says married but I'm not sure if they're actually doing it correctly.

10 You can check your paystub - it should indicate the withholding status they're using. Look for something like "Married" or "Single" near the federal tax withholding line. If it doesn't show, ask your payroll department to confirm what filing status they're using for your withholdings. If you want to be extra sure, you can also calculate what your withholding should be using the IRS withholding tables. Compare that to what's actually being withheld from your paycheck. Any significant difference might indicate they're using the wrong filing status.

15 Just a quick correction - the W-4 form no longer uses allowances as of 2020. The form was completely redesigned. Instead of claiming "0" allowances, you would now use Step 2(c) to withhold at the higher single rate, or specify an additional dollar amount on Line 4(c). While getting a refund feels nice, remember that it means you're giving the government an interest-free loan throughout the year. Ideally, you want your withholding to be as close as possible to your actual tax liability - not too much, not too little.

Thanks for this - that's super helpful! I was about to just use Google Translate for the passport which sounds like it would've caused a rejection. Do you happen to know approximately how much a certified translator costs for passport documents? And is there any list of IRS Certifying Acceptance Agents for international locations?

Certified translation costs vary quite a bit depending on your location, but for passport documents, you're typically looking at around $40-120. Some translation services specialize in immigration and tax documents and may offer package deals specifically for ITIN applications. For IRS Certifying Acceptance Agents (CAAs) abroad, the IRS maintains a directory you can search by location at irs.gov/individuals/international-taxpayers/acceptance-agents-overseas. Not all countries have them, but major cities often do. If there's none in your spouse's country, some US-based CAAs can work remotely by video conference, though this is a newer practice that developed during the pandemic. One more tip: make sure the translator provides a signed statement of certification on letterhead that includes their credentials and a statement of accuracy. The IRS is quite particular about this.

Unfortunately there's no online tracking system for W-7 applications like there is for tax returns. You can try calling the IRS ITIN unit directly at 1-800-908-9982, but good luck getting through. I submitted my wife's W-7 in February and only got the ITIN letter in May. The only way I managed to check status was using that Claimyr service mentioned above to actually get through to an IRS agent. It's ridiculous how hard they make this process!

This is great advice but what about cash transactions? I paid some of my business expenses in cash and have literally zero proof. Is there any way to claim those or am I just out of luck?

For cash transactions, you're in a tougher spot, but not hopeless. Try to find any indirect evidence - ATM withdrawal records from your bank statements that align with when you think you made purchases, any notes or calendar entries about what you were buying or why. The key is reasonableness - if you can show a pattern (like you regularly withdrew $200 in cash every month for business supplies), that's better than nothing. Just be honest and consistent with your reconstruction, and only claim what you're confident you actually spent. And in the future, either keep receipts for cash purchases (even taking a quick photo with your phone works) or use a credit/debit card for better tracking.

This is reassuring to hear! Was there anything specific that triggered your audit? I'm trying to figure out what to avoid so I don't get flagged...