For anyone still struggling with this, I've found that the key is understanding that the new W4 essentially works in layers. Step 1 sets your baseline withholding based on filing status and salary. Steps 2-3 adjust for multiple jobs or spouse's income. Step 4 is where you make fine-tuned adjustments. Here's my practical approach: First, use any paycheck calculator to see what your baseline withholding would be with just Step 1 filled out. Then calculate your total desired annual withholding (110% of last year's tax in your case). The difference between these two numbers is what you put in Step 4(c) divided by your remaining pay periods. For the front-loading vs back-loading strategy, I submit updated W4s quarterly. Q1-Q2 I put a smaller amount in 4(c), then increase it significantly for Q3-Q4. Just remember that any RSU vesting or bonuses will have their own withholding (usually 22%) that you can't control with your W4, so factor that into your calculations. The math gets easier once you break it down into these components.

I've been dealing with this exact same situation for the past two years and have finally found a system that works really well. The key insight that changed everything for me was realizing that you need to think about withholding in three separate buckets: regular salary withholding (controlled by your W4), supplemental wage withholding (RSUs/bonuses at flat rates you can't control), and estimated tax payments if needed. Here's my step-by-step process: First, I calculate our total expected tax liability using last year's return as a baseline, adjusting for any major income changes. Then I figure out what will be withheld automatically from supplemental wages (22% for most RSUs and bonuses). Next, I determine how much additional withholding I need from regular paychecks to reach my safe harbor target (110% of last year's tax). For the front-loading vs back-loading strategy, I've found it helpful to create a simple spreadsheet that tracks cumulative withholding by quarter. I start with minimal extra withholding in Step 4(c) for Q1-Q2, then ramp it up significantly for Q3-Q4. This way I'm not giving the IRS an interest-free loan for most of the year, but I still hit my safe harbor requirement. The most important thing I learned is to update your W4 every time you get a bonus or RSU vesting, because those events change your withholding needs for the remainder of the year. It sounds like extra work, but it's actually saved me from both underpayment penalties and massive overwithholding.

Has anybody here actually gone through the full SS-8 process from filing to determination? Everything I've read online suggests it takes forever to get a ruling. I'm wondering if it's even worth it or if I should just suck it up and pay the self-employment taxes to avoid the hassle?

I'm dealing with a very similar situation right now - got misclassified by an employer who had me working set hours at their location using their equipment, but they issued a 1099 instead of a W-2. The self-employment tax burden is crushing! From what I've researched, you definitely have a strong case for employee classification based on the IRS's common law test. The fact that both employers controlled when, where, and how you worked are major red flags for misclassification. I'd recommend filing the SS-8 and 8919 together rather than waiting. Even though the SS-8 determination takes months, you can use code G on Form 8919 to indicate you're filing it along with an SS-8. This way you only pay the employee portion of Social Security and Medicare taxes (7.65%) instead of the full 15.3% self-employment tax while you wait for the determination. If the IRS rules in your favor on the SS-8 (which sounds likely given your situation), your former employers will be on the hook for their portion of the employment taxes plus penalties. You might even get a refund if you initially paid more than the employee portion. Don't let these employers get away with shifting their tax burden onto you - file those forms and protect yourself!

Honestly, don't touch your retirement money if you can avoid it. I withdrew $15k from my 401k for school 5 years ago and I MASSIVELY regret it. That $15k would be worth almost $25k now with market growth. Plus I paid about $5k in taxes and penalties, so the real cost was like $30k for my $15k tuition. I'm now playing catch-up with my retirement and it sucks. Look into Pell grants, scholarships for returning students, payment plans, or even a 0% intro APR credit card if you can pay it off within the promo period.

Michael, before you make any withdrawals, I'd strongly recommend checking with your school's financial aid office first. Many universities have emergency aid funds, work-study programs, or payment plans that could help bridge the gap without touching your retirement savings. Also, since you're 29 and returning to school, you might qualify for the Lifetime Learning Credit which can give you up to $2,000 back on your taxes for qualified education expenses. If you do end up needing to access your 401k, the rollover to IRA strategy mentioned above is definitely the way to go to avoid that 10% penalty. One more thing - have you looked into whether your state offers any grants for adult learners returning to school? Many states have programs specifically for people in your situation that don't require repayment.

As someone who's been driving for rideshare for about 8 months now, I can definitely relate to the confusion! Here's what I learned the hard way: Keep EVERYTHING organized from day one. I use a simple spreadsheet to track all my expenses weekly - it takes maybe 10 minutes but saves hours during tax time. For your specific situation with 30 hours/week driving, you're probably looking at around 70-80% business use on your vehicle. Run the numbers on both methods, but with a newer leased vehicle like your Camry, standard mileage often comes out ahead. One thing I wish someone had told me: those car washes are 100% deductible as a business expense if you're doing them specifically for rideshare (which it sounds like you are with 2x weekly). Same with your phone mount, charger cables, and any passenger amenities. Also - and this is crucial - start making quarterly estimated tax payments NOW. I got hit with a penalty my first year because I waited until tax season. The IRS expects you to pay as you go when you're self-employed. Set up a separate savings account and automatically transfer 25-30% of your rideshare earnings there. Trust me on this one - April will come faster than you think!

One thing that might help you decide between standard mileage vs actual expenses - keep detailed records for both methods for the first few months, then compare. Since you're driving 30+ hours weekly in a leased vehicle, the standard mileage rate ($0.67/mile for 2025) might actually work out better, especially if you're putting on a lot of miles. A few additional deductible expenses I didn't see mentioned: - Hand sanitizer and cleaning supplies (became huge during COVID and still relevant) - Parking fees when waiting for rides - Background check fees that Uber/Lyft charge annually - Portion of your auto insurance deductible if you have an accident while driving For record keeping, I'd suggest taking photos of all receipts and storing them in Google Drive or similar. Credit card statements help, but the IRS really wants to see itemized receipts showing what you bought and when. Since you mentioned spending $280-350/week on gas, you're probably driving 1,200+ miles weekly. At the standard rate, that's potentially $800+ in weekly deductions just from mileage. Definitely run those numbers! Also consider getting a business credit card just for rideshare expenses - makes tracking so much easier come tax time.

I went through something very similar last year - had the 420 code appear on my transcript in September but didn't receive the actual audit letter until mid-November. The IRS mail system is incredibly slow right now, especially if there are any address issues. One thing that helped me was pulling my wage and income transcript (not just the account transcript) to see if there were any discrepancies between what I reported and what third parties reported to the IRS. Sometimes audits are triggered by mismatches that aren't immediately obvious. Given that you moved twice in 2022, I'd strongly recommend calling the IRS practitioner priority line (if you have representation) or using one of the callback services mentioned in other comments. The address issue could mean your audit letter is sitting in limbo somewhere, and missing the response deadline could turn a simple correspondence audit into something much more complicated. Also, keep in mind that the NIIT adjustment being in your favor doesn't necessarily mean it was correct - the IRS computers make automatic adjustments all the time that later get reviewed by humans. I'd definitely have your investment income documentation ready along with your home office records.

I've been through a similar situation and can offer some reassurance. The 420 code with an August date means the examination was initiated then, but the IRS correspondence process is extremely backed up right now. You could easily be looking at 60-90 days before receiving the actual letter, especially with your address changes. A few practical suggestions based on my experience: 1. **Address verification is critical** - File Form 8822 immediately if you haven't already. Even if you think your address is current, the IRS often has outdated information that can delay or misdirect correspondence. 2. **The NIIT adjustment is likely the trigger** - In my case, any time the IRS made an adjustment in my favor (even automatically), it got flagged for human review later. The system probably corrected what it thought was an error, but now an examiner wants to verify the calculation was actually correct. 3. **Document everything now** - Gather your 2022 investment statements, Form 8960 worksheets if you filed one, and any supporting documents for the NIIT calculation. Also prepare your home office documentation just in case, but I'd bet money it's the NIIT issue. 4. **Don't panic about timing** - Even if the letter is delayed, the IRS is generally reasonable about response deadlines when there are mail delivery issues, especially if you can document when you actually received it. The waiting is the worst part, but you're being proactive by preparing now. Most correspondence audits are resolved pretty quickly once you provide the requested documentation.