I went through this exact same situation last year with a CP81 notice showing a $3,200 credit, and I was just as confused as you are now! After reading through all these helpful responses and dealing with it myself, I can confirm that the credit amount is almost certainly legitimate. What I discovered is that the IRS receives your W-2 and 1099 information directly from employers and financial institutions throughout the year, completely separate from when you file your actual tax return. So they can have records of all your tax withholdings (which creates the credit balance) even if your return gets lost, rejected, or stuck in processing. In my case, my TurboTax e-file was actually rejected due to an incorrect prior year AGI, but I never saw the rejection notice. TurboTax showed it as "submitted" but the IRS never accepted it. I only found out when I called them directly. My suggestion is to start by checking your TurboTax account thoroughly for any rejection notices you might have missed, then create an IRS online account to view your transcripts. The "Wage and Income Transcript" will show you exactly what withholding information they have on file, which should match that $4,177 amount. Don't stress too much about this - it's a common issue and that money is definitely yours! You just need to get your 2021 return properly processed by the IRS.

I've been lurking on this sub for a while but had to jump in because I literally just resolved this exact same issue last week! Got a CP81 notice back in February showing a $2,890 credit with the same "we don't have your return" message. Like everyone else here, I was totally confused because I distinctly remember e-filing through FreeTaxUSA and getting confirmation emails. After reading similar threads and trying the suggestions people mentioned, here's what actually worked: First, I checked my filing software account and found a rejection notice buried in an obscure "messages" section that I had completely missed. My return was rejected because I fat-fingered my prior year AGI by one digit. The software showed "submitted" but never actually made it through to the IRS. Second, I created the IRS online account everyone keeps mentioning and pulled my wage transcript. Sure enough, it showed my exact W-2 withholding amounts that matched the credit in the notice - so I knew the money was real. The whole process from refiling to getting my refund took about 4 weeks once I corrected the AGI error. The relief when that direct deposit finally hit was incredible! For anyone dealing with this - don't panic, check your tax software for hidden rejection messages, and definitely create that IRS account to verify what they have on file. That credit is YOUR money waiting to come home!

Head of Household is definitely wrong if ur married and living together. It's meant for single parents or people supporting relatives. You probably want "Married filing jointly" on ur actual tax return, but for W4 withholding purposes, you might want "Married but withhold at higher rate" to avoid owing money.

Based on your situation with significantly higher income than your husband and his unpredictable consulting income, I'd definitely recommend switching from "Head of Household" to "Married" status on your W4. As others mentioned, HoH isn't available for married couples living together. Given the income disparity and uncertainty around your husband's business income, "Married but withhold at higher Single rate" is probably your best bet. This will withhold more tax from your paychecks than regular "Married" status, helping you avoid a big tax bill next April. You might also want to consider using the Two-Earners/Multiple Jobs Worksheet that comes with the W4 form - it's designed exactly for situations like yours where there's uneven income between spouses. And remember, you can always adjust your W4 throughout the year as your husband's business income becomes clearer. It's better to have a little too much withheld and get a refund than to owe thousands at tax time!

Are you guys using the standard online tax calculators to figure this out? I've used the IRS withholding calculator and it still seems like my checks are way off from what it predicts.

I work in payroll and see this confusion all the time! Your paycheck withholdings are based on an annualized calculation - meaning your payroll system assumes you'll earn that same amount every pay period for the whole year. So when you have a big overtime week, it withholds taxes as if you'll make that inflated amount all year long. Here's a simple example: if your regular biweekly pay is $3,300 ($41.25 x 80 hours), your system calculates annual withholding based on $85,800/year. But if you work overtime and earn $5,000 in one check, it suddenly thinks you're making $130,000/year and withholds accordingly. The key thing to remember is that this is just withholding - not your actual tax liability. When you file your return, you'll likely get a refund for the overwithholding. To minimize this, you could adjust your W-4 to account for the extra withholding on overtime checks, but be careful not to underwithhold if your overtime isn't consistent. Bottom line: every overtime hour you work still puts more money in your pocket eventually, even if it doesn't feel like it on that particular paycheck.

This is a really complex situation that I think requires extra caution. While everyone's given great advice about the nominee income approach, I'd strongly recommend getting this documented BEFORE you file your return. The IRS has been cracking down on sports betting income reporting, and having everything properly documented upfront could save you major headaches later. A few additional points to consider: Make sure your friend actually reports the income on their return - if they don't, and the IRS matches your 1099 showing you reported it as nominee income, that could trigger questions for both of you. Also, keep detailed records of the deposit/withdrawal patterns showing the money flow went directly between your friend and the betting site, not through your personal accounts. One more thing - consider whether this arrangement is worth the ongoing tax complexity. Most legitimate sports betting sites have pretty straightforward account creation processes now, so it might be easier for your friend to just set up their own account going forward.

I just want to emphasize something that might get overlooked in all the technical tax advice - make absolutely sure you and your friend are on the same page about reporting this correctly. I've seen situations where one person files using the nominee income approach, but then the actual recipient doesn't report it on their return (either by mistake or thinking they don't need to since someone else already "claimed" it). This creates a huge red flag for the IRS because they'll see gambling winnings reported under your SSN with an offsetting deduction, but no corresponding income reported by your friend. That's almost guaranteed to trigger correspondence or an audit for both of you. I'd suggest you both file at the same time if possible, or at least coordinate so you know your friend has actually included the $9,200 as gambling income on their return before you submit yours. Also keep copies of both returns for your records - if questions come up later, being able to show that both parties properly reported their respective sides of the transaction will go a long way toward resolving any IRS inquiries quickly.

I'd be really careful about deducting au pair payments as business expenses. The IRS has strict rules about what qualifies as a legitimate business deduction, and childcare generally doesn't meet those criteria even if it enables you to work. The key test is whether the expense is "ordinary and necessary" for your specific business operations. Paying someone to watch your kids while you work from home doesn't directly produce business income - it's a personal expense that happens to enable you to work. However, you're in a good position with the dependent care credit! With your combined freelance income, you should be able to claim up to $6,000 in qualifying expenses (assuming you have two or more kids) for a credit of $1,200-$2,100 depending on your AGI. Make sure you get the au pair's SSN/ITIN along with the agency's EIN for Form 2441. The math probably works out better with the credit anyway since it's a dollar-for-dollar reduction in taxes owed, versus a deduction that just reduces your taxable income.

This is a great question and I can see why you'd be confused! The key thing to understand is that the IRS treats childcare costs and business expenses very differently, even when the childcare enables you to work. Your weekly payments to the au pair are personal expenses that qualify for the dependent care credit, not business deductions. The test for business expenses is whether they're "ordinary and necessary" for your specific business operations. Paying someone to watch your kids so you can work doesn't meet this standard - it's a personal expense that happens to enable your work. Here's what you should focus on for maximum benefit: - Use the dependent care credit for both the agency fees and weekly payments - You can claim up to $6,000 in expenses if you have two or more qualifying children - The credit ranges from 20-35% of your expenses based on your AGI - Make sure you get the au pair's SSN/ITIN and have the agency's EIN for Form 2441 Given your income levels, the dependent care credit will likely provide better tax savings than trying to deduct these as business expenses (which could trigger audit issues). The credit directly reduces your tax liability dollar-for-dollar, while deductions only reduce taxable income. Keep detailed records of all payments and make sure your au pair files their 1040NR as you mentioned - that shows proper tax compliance on their end too.