How I Accidentally Loaned $10K Interest-Free to the IRS Last Filing Season

Does the W-4 have a specific line for adjusting for tax credits? I'm getting an EV this year and want to avoid the same issue.

The W-4 doesn't have a specific line just for tax credits, but you can account for them in Step 3, which is labeled "Claim Dependents" but actually handles all tax credits. You can put your expected $7,500 EV credit amount there. Alternatively, if you don't want to share that specific information with your employer, you could use Step 4(c) to reduce your withholding by requesting an additional amount to be withheld. In this case, you'd calculate how much less you want withheld per paycheck and put a negative number. For example, if you get paid monthly, you might reduce your withholding by about $625 per month ($7,500 ÷ 12).

Does it actually work for calculating withholding adjustments? I'm terrible at math and always end up with huge refunds I could've used during the year.

I'm skeptical about these tax tools. How does it handle things like the EV credit phase-out based on income? Those thresholds are complicated.

It absolutely works for withholding calculations - that's one of the main things I used it for. You upload your recent paystubs and it shows you exactly what to put on your W-4 to get closer to zero. It even generates the filled-out W-4 form you can give to your employer. As for the EV credit phase-out thresholds, it handles those perfectly. That's why I needed it - I was right on the edge of the income limit for the full credit. It shows you exactly where you fall in the phase-out range and calculates the partial credit if applicable. It's way more precise than the general IRS calculator.

Wait, how does this actually work? Is it just paying someone to wait on hold for you? That seems like something I could get my teenager to do lol.

Yeah right. No way they're getting through to the IRS faster than anyone else. The IRS phone system is notoriously terrible - they're just taking your money for nothing.

It's not just paying someone to wait on hold - they have a system that navigates the IRS phone tree and holds your place in line while you go about your day. When they reach an agent, they call you and connect you directly. No need to sit around listening to that awful hold music for hours. And it absolutely works faster than trying yourself. The IRS phone systems are programmed to only allow a certain number of callers in queue. Claimyr has figured out how to optimize getting into that queue during key times. I was absolutely skeptical too, but after wasting entire afternoons trying to get through myself, I was connected in 37 minutes. The IRS agent even confirmed they're getting more calls through this service now.

What about the Social Security overpayment though? I work two jobs and always end up overpaying. Is there a way to adjust for that during the year too?

The Social Security overpayment is trickier because employers don't coordinate with each other. If you know your total earnings will exceed the Social Security wage base ($168,600 for 2024), you can estimate how much you'll overpay. The calculation is basically 6.2% of the amount you'll earn above the wage base across all jobs. Once you have that number, you can adjust your W-4 at your highest-paying job to compensate by adding that estimated overpayment amount to Step 3 of your W-4 or reducing the additional withholding in Step 4(c). Just be careful not to adjust so much that you end up owing a lot at tax time. It's usually safer to get a small refund than to owe penalties.

I'm planning on erring on the side of caution. If your income might put you over the threshold, don't adjust your withholding for the credit. Better to get a refund than owe penalties. You could also do a partial adjustment if you're fairly confident you'll get at least some of the credit.