This is totally normal and you didn't mess up! When you get a substantial raise mid-year, your payroll system doesn't retroactively adjust the withholdings from earlier in the year when you were making less. Your employer started withholding at the $62K rate in August, but those calculations assume you were making $62K all year long. The key thing to remember is that owing $840 isn't necessarily bad - it just means your withholding was close to what you actually owed. You're essentially in the sweet spot of not giving the government an interest-free loan (which is what happens when you get a big refund). For next year, definitely update your W-4 now that you know your new salary. You can use the IRS withholding calculator online to figure out the right amount. Since you're settled into your new pay rate, the withholding should be much more accurate going forward. Also, don't stress too much about the $840 - you have until the tax deadline to pay, and if cash flow is tight, the IRS offers reasonable payment plans. The important thing is that you file on time even if you can't pay the full amount right away.

This exact same thing happened to me when I got promoted from $52K to $68K in September last year! I was so confused and worried that I had done something wrong with my taxes. What really helped me understand it was thinking about it this way: for the first 8 months of the year, your employer was withholding taxes as if you'd make $47K all year. Then suddenly in August, they started withholding as if you'd make $62K all year. But the reality is you made something in between those two amounts for 2025 as a whole. The withholding tables just can't perfectly predict this kind of mid-year change. Your situation is actually pretty common - I'd say owing around $800-900 after a $15K raise is totally reasonable and shows your withholding wasn't too far off. One thing that gave me peace of mind was realizing that owing a moderate amount like this is actually better than getting a huge refund, since it means you kept more of your money in your own pocket throughout the year instead of giving the IRS an interest-free loan. Definitely update that W-4 though! I used the IRS calculator and it was pretty straightforward. Now that you're settled into your new salary, next year should be much more predictable.

Has anyone tried just using the IRS Tax Withholding Estimator online? It's supposed to handle all these complicated situations but when I input our info (very similar to yours - W2 income plus self-employment), it gave me a completely different number than what the worksheet method showed. Now I don't know which one to trust!

I went through this exact same situation last year and it was such a headache! After trying multiple approaches, here's what ended up working best for us: The key thing I learned is that you need to be really careful about which "income" number you're using. Don't just put his gross $145k on line 4(a) - you need his NET self-employment income (after business deductions) MINUS the self-employment tax deduction. Here's the process that worked for me: 1. Estimate his net profit after business expenses 2. Calculate SE tax (net profit × 0.9235 × 0.153) 3. The deductible portion is half of that SE tax 4. Subtract that deduction from his net profit 5. THAT number goes on line 4(a) Also, don't forget about the child tax credit on Step 3 - with three qualifying kids, that's $6,000 in credits that will reduce your tax liability significantly. I'd recommend running your numbers through the IRS Withholding Estimator AND doing the manual worksheet calculation to double-check. If they're close, you're probably on the right track. If they're way different, dig deeper into which estimates might be off. The peace of mind is worth the extra effort to get it right!

As a freelancer who just went through this exact process last week, I can confirm that calling is definitely the way to go! I was dreading it but ended up getting through in about 35 minutes on a Tuesday morning. The agent was super helpful and walked me through everything step by step. One thing I'd recommend that I don't think anyone mentioned yet - if you have any business mail forwarding set up with USPS, make sure to coordinate the timing. I updated my address with the IRS first, but forgot to set up mail forwarding until a few days later. Luckily nothing got lost, but it could have been a problem if any important IRS notices came during that gap. Also, for anyone who's anxious about the call like I was - the agents are used to helping people with address changes, it's a routine request for them. Don't stress too much about it! You'll be done before you know it.

I just wanted to say thank you to everyone who shared their experiences here! As someone who was completely lost about this process when I first posted, this thread has been incredibly helpful. I'm planning to make the call next week and feel so much more prepared now thanks to all the detailed advice and real experiences you've all shared. Special shoutout to everyone who mentioned the practical tips like having snacks ready for the hold time, writing down the reference number, coordinating with USPS mail forwarding, and calling outside of tax season when possible. These are the kinds of details you don't think about until someone who's been through it mentions them! It's really reassuring to hear that the IRS agents are generally helpful with this process and that it's more routine than scary. You've all definitely helped calm my nerves about making that call. I'll report back once I get it done in case my experience adds anything useful for future first-timers! 🙏

Does anybody know if you can use a gift card to pay if you're on a payment plan with the IRS? I owe about $5k and am making monthly payments but would rather use some gift cards I got for Christmas.

Just wanted to share my experience since I was in a similar situation last year. I had about $800 in various Visa gift cards and successfully used them to pay part of my tax bill. A few key tips: 1. Definitely register ALL your gift cards first with your exact billing address before attempting payment - this is crucial or they'll be declined 2. I used Official Payments and the fee was about 1.87% which wasn't too bad 3. You can make multiple payments if needed, but you'll pay the convenience fee each time 4. Keep detailed records of each transaction - I had one gift card that didn't process correctly and needed the receipt to sort it out The whole process took me about 30 minutes once I had everything registered properly. Way better than scrambling to find cash! Just budget for those processing fees when you're calculating how much you can actually put toward your tax bill.

Has anyone gone through the process of donating inherited jewelry instead? I've heard you can get a tax deduction equal to the fair market value without having to deal with capital gains. Wondering if that might be easier than selling all the costume stuff.

One thing to keep in mind when dealing with inherited jewelry collections like yours is to maintain detailed records of everything - even the less valuable pieces. I went through something similar with my aunt's estate and learned the hard way that organization is key. For the massive collection you're describing, consider creating a simple spreadsheet with photos, estimated values, and source of valuation (whether appraised, researched online, etc.). This becomes invaluable when tax time comes around and you're trying to remember what you sold and for how much. Also, don't overlook the fact that some costume jewelry from certain eras or designers can actually be worth more than you'd expect. Before selling everything in bulk lots, it might be worth doing a quick online search for any signed pieces or items that look like they might be from well-known costume jewelry makers like Trifari, Coro, or Weiss. You'd be surprised what collectors pay for vintage costume jewelry in good condition. The step-up basis rule everyone mentioned is definitely your friend here, but having good documentation will make your life much easier if you ever need to justify your valuations.