Why do I owe the IRS money after going exempt for a month? Need tax filing advice

But shouldn't the tax preparer have explained this clearly? Mine usually walks me through why I owe or get a refund. And is there any way to verify the amount is correct without waiting for the IRS to update their system? I've heard horror stories about penalties adding up while people wait.

Yes, your preparer should have explained why you owe. That's part of what you're paying them for. It's worth calling them back and asking for a clear breakdown of why you owe what you do. You can verify the amount by reviewing your tax return yourself. Look at line 24 on your Form 1040 (total tax) and compare it to line 25d (total federal income tax withheld). The difference would be what you owe or get refunded. You can also calculate roughly how much tax you should have paid during that exempt month and see if it aligns with the amount due.

Does it work with W-2s from multiple jobs? I'm in a similar situation but have 3 different employers and went exempt on one of them for a couple months.

Sounds interesting but how trustworthy is it with all your tax documents? I'm always nervous about uploading financial info to sites I don't know. Did it actually save you any money or just confirm what you already owed?

Yes, it absolutely works with multiple W-2s! You can upload all your tax documents regardless of how many employers you have, and it will analyze everything together to give you the complete picture. I totally understand being cautious about financial documents. They use bank-level encryption and don't store your documents after analysis. It didn't save me money on what I already owed, but it did help me plan better for next year and confirmed that my tax preparer wasn't scamming me - I legitimately owed that amount because of my withholding choices.

How exactly does this work? The IRS phone lines are notoriously backed up for hours. What magic do they use to get you through quicker than everyone else?

Yeah right. No way this actually works. The IRS phone system is deliberately designed to be impenetrable. I've spent HOURS on hold only to get disconnected. This sounds like complete BS to me.

It works by continuously calling the IRS for you using their automated system. When most people call the IRS and hear "we're experiencing high call volume" they hang up and try again later. Claimyr keeps dialing back repeatedly until it gets through the queue, then it alerts you to pick up the call. I was super skeptical too! I had tried for 3 days straight to get through on my own with no luck. The service basically does the frustrating part for you, and you only join the call once there's an actual agent ready to talk. It saved me hours of hold music and frustration. I talked to a really helpful agent who confirmed everything about my tax situation.

Thanks for the advice! Do you know if there's any way to verify my tax preparer did everything correctly before I pay this bill? And would I be able to set up a payment plan for the $650 or is that amount too small?

You can always get a second opinion from another tax preparer, but that would cost more money. A cheaper option is to review the return yourself - make sure your income, filing status, and deductions all look right. The most common errors are usually missing deductions or credits you're entitled to. The IRS does offer payment plans, even for smaller amounts like $650. You can apply online for a short-term payment plan (120 days or less) with no setup fee, or a longer-term monthly payment plan with a small setup fee. The online application is pretty straightforward through the IRS website under "Pay" options.

I did something similar in 2023 - went exempt for about 6 weeks during a financial crunch. Ended up owing about $1,200 at tax time but didn't get any penalties. From what I understand, penalties usually kick in if you owe more than $1,000 AND you didn't pay at least 90% of your tax through withholding or estimated payments.

This is really reassuring to hear from someone who went through the same thing! I've been so stressed about whether I made a huge mistake. The timeline you mentioned for the IRS website updating matches what my tax preparer told me too - they said it could take 2-4 weeks before anything shows up online. Did you end up having any issues when you actually paid the amount, or was it pretty straightforward once the balance appeared on the IRS site?

Payment was actually super easy once the balance showed up! I just used the IRS Direct Pay system on their website - you can pay directly from your bank account for free. The whole process took maybe 5 minutes. The balance updated within a day or two showing it was paid in full. One tip: make sure to keep a record of your confirmation number when you pay. I screenshot mine just in case, but honestly the IRS system worked flawlessly. Way less stressful than I thought it would be after all the worrying about whether I'd messed up my taxes by going exempt!