Why do we owe almost $5k in taxes this year when we usually get a refund?

This is actually pretty common when side income comes into play. The $7,500 freelance income is definitely a big factor here. Since no taxes were withheld, you now owe: - Federal income tax on that amount (probably 22% bracket for you) - Self-employment tax of about 15.3% - Possibly state tax depending on where you live Just on that freelance income alone, you're looking at roughly $2,800 in taxes. The raises also likely pushed you into a slightly higher tax bracket or reduced some credits you previously qualified for. For the future, your husband should either make quarterly estimated tax payments on freelance income or increase his W-4 withholding at his main job to cover the extra income. That way you won't face a big bill at tax time.

I went through something really similar last year - got hit with a $4k bill when I usually get money back. I spent DAYS trying to figure out what went wrong, double checking all my forms, and even considered paying for a professional review which would've cost me hundreds more. Then I found this tool called taxr.ai (https://taxr.ai) that analyzes your tax documents and compares them to previous years to spot issues. It flagged that my employer had messed up my withholding and showed me exactly where the problem was. It also found some deductions I missed that saved me almost $900! Not sure if you're in the same boat with withholding issues or if it's just the freelance income, but it might be worth checking to make sure nothing else is going on. Super easy to use - you just upload your documents and it does all the analysis.

Just wanted to update - I tried taxr.ai after seeing the suggestion here and it was seriously helpful. Turns out I missed claiming my home office deduction (I'm self-employed) and wasn't properly accounting for my health insurance premiums. The report showed I could file an amended return and get back about $1,200! The analysis took like 5 minutes and was super clear about what I needed to do. Definitely worth it if you're facing a surprise tax bill!

If you're really stressed about the payment, you should try calling the IRS to set up a payment plan. They're actually pretty reasonable about it. Only issue is actually GETTING THROUGH to a human - I spent literally 4 hours on hold last month before giving up. My accountant told me about this service called Claimyr (https://claimyr.com) that gets you through to an actual IRS agent without the wait. I was super skeptical but you can see how it works in this video: https://youtu.be/_kiP6q8DX5c I used it and got through in about 10 minutes instead of hours. The agent set me up on a payment plan where I'm paying about $250/month with minimal interest. Way better than putting it on a credit card or trying to come up with the full amount at once.

So I'm eating my words here. After posting that skeptical comment yesterday, I decided to try Claimyr as a test because I actually did need to talk to the IRS about a notice I received. Got connected to an agent in about 15 minutes! The woman I spoke with was super helpful and resolved my issue on the spot. I was fully prepared to come back here and call BS, but it legitimately worked. Would have spent my entire afternoon on hold otherwise. For anyone facing a big tax bill, definitely consider calling the IRS to set up a payment plan - they're pretty reasonable if you're proactive about it.

Don't forget to check your state tax withholding too!! My wife and I got destroyed one year because our employers withheld enough for federal but not for state taxes. We didn't notice until filing and suddenly owed $3k to the state. Also check if you changed your W-4 recently. The new W-4 form no longer uses allowances and if you didn't fill it out right when switching jobs or updating it, you could end up under-withheld.

Has anyone used TurboTax to handle this kind of situation? I'm in a similar boat with surprise side income and their interface is confusing me on how to properly categorize everything.

This exact same thing happened to me two years ago! The freelance income really throws everything off because of the self-employment tax that people don't expect. One thing that might help immediately - if your husband kept ANY receipts or records from his freelance work, make sure you're deducting every possible business expense. Even things like phone bills (business percentage), internet, supplies, software subscriptions, etc. can add up quickly. Also, don't panic about the payment! The IRS offers several options: - Payment plans (usually pretty reasonable interest rates) - You might qualify for an offer in compromise if you truly can't pay - They're surprisingly flexible if you call and explain your situation For next year, definitely set up quarterly estimated payments for any freelance income. I learned this the hard way but now I just automatically put 25-30% of any side income into a separate savings account for taxes. Makes April much less stressful!