Just to clarify something important - TurboTax itself isn't usually making calculation errors. What typically happens is either: 1) users enter information incorrectly, 2) users misunderstand eligibility requirements, or 3) the IRS makes adjustments based on information they have that wasn't included in your return. For example, if you have unreported income that shows up on a 1099 the IRS received but you didn't include, they'll adjust your return accordingly.

I appreciate everyone sharing their experiences here. As someone who's been doing taxes for family members for years, I can confirm that most discrepancies aren't actually TurboTax errors but rather eligibility issues or data entry mistakes. That said, I always recommend using the IRS's own Interactive Tax Assistant (ITA) tool on their website to verify credit eligibility before filing. It's free and walks you through the exact same qualification questions the IRS uses. Also, for peace of mind, you can request a tax transcript after filing to see exactly what the IRS processed vs what you submitted. The key is understanding that tax software is only as accurate as the information you provide and your actual eligibility for credits.

Has anyone used the Household Employment Tax section in TurboTax? I find it super confusing because it asks for the total wages I paid my nanny, but I'm not sure if that should include the taxes I paid to Poppins or just her direct wages?

One thing that helped me was getting a copy of the actual tax deposits Poppins made on my behalf throughout the year. They should be able to provide you with a summary showing the exact dates and amounts of each federal tax deposit they made. This makes it much easier when entering the estimated tax payments in TurboTax because you can enter each payment with the correct date it was actually submitted to the IRS. Also, double-check that Poppins handled both the employer and employee portions of Social Security and Medicare taxes correctly. Sometimes there can be confusion about which taxes were withheld from your nanny's pay versus which ones you paid as the employer. The Schedule H should reconcile everything, but having that detailed breakdown from your payroll service makes the whole process much smoother.

Has anyone dealt with getting a severance paid out over multiple payments instead of one lump sum? My company is offering me either option, and I'm wondering if taking it over 3 months would result in less tax withholding upfront compared to a lump sum.

I went through something very similar when I got laid off six months ago. The 58% withholding rate you're seeing is unfortunately pretty normal for severance payments, especially if your company is being conservative with their calculations. Here's what likely happened: Your company treated the $8,500 severance as if you were going to receive that amount every pay period for the entire year. So if you normally get paid bi-weekly, they calculated withholding as if you'd be making $221,000 annually ($8,500 x 26 pay periods). That would put you in a much higher tax bracket, hence the aggressive withholding. The silver lining is that when you file your 2025 tax return, your actual tax will be based on your total income for the year - which will likely be much lower since you're now unemployed. You should get a substantial refund of that overwithholding. I'd recommend requesting a detailed breakdown of all the withholdings from HR so you can see exactly where every dollar went. Sometimes there are errors or unnecessary deductions that you can get corrected. Also consider talking to a tax professional about estimated quarterly payments for the rest of 2025 to avoid more overwithholding when you find your next job.

Has anyone dealt with this situation using TaxSlayer? I'm having the exact same Roth IRA withdrawal issue but I can't find where to enter my contribution information to offset the 1099-R. The software keeps treating my entire withdrawal as taxable.

I went through this exact situation last year and it's definitely stressful! The good news is that you're absolutely right - Roth IRA withdrawals of contributions should be tax-free. The key issue is that your tax software doesn't automatically know how much of your withdrawal was contributions versus earnings. Here's what worked for me: First, make sure you have Form 8606 Part III completed correctly. You'll need to track down your total Roth contributions from all years - this becomes your "basis." Since you contributed $15,000 total and withdrew $13,200, your entire withdrawal should be considered a return of contributions and therefore not taxable. In FreeTaxHelper, look for a section on "Retirement Account Distributions" or specifically "Form 8606." You might need to manually override what the software is calculating based on just the 1099-R. Don't panic about that $3,800 tax bill - once you properly account for your contribution basis, it should drop significantly or disappear entirely. Keep good records of all your contributions going forward, as you'll need this information for any future withdrawals. The 5498 forms are indeed just informational, but they're invaluable for tracking your basis over time.

Just to add another perspective - I've been running a mobile coffee cart for 3 years and learned this lesson the hard way. We were doing exactly what your owner is doing (using one "safe" higher rate) until we got audited last year. The auditor explained that by consistently overcharging in certain jurisdictions, we were creating a liability because we were collecting more tax than we were remitting to those specific locations. The solution that worked for us was switching to a POS system with automatic location-based tax rates, but we also had to go back and correct our previous filings. It was a pain, but much better than facing penalties. I'd strongly recommend having a conversation with your owner about getting compliant sooner rather than later - mobile food businesses are actually more likely to be audited because we operate across multiple jurisdictions. Also, don't forget about the permit side of things. Most cities require food trucks to have local permits even for one-day events, and those permits often come with specific tax reporting requirements.

This is such a timely discussion! I'm actually dealing with a similar situation with our mobile BBQ business. We operate in 4 different counties and I've been manually tracking which tax rate to use for each location, but it's been a nightmare to manage during busy festival seasons. One thing I learned from our accountant is that you should also keep detailed records of not just WHERE you made each sale, but WHEN. Some jurisdictions have different tax rates that change throughout the year (like temporary local taxes for infrastructure projects), so even the same location might have different rates depending on the date. Also, for anyone considering the GPS-based POS solutions mentioned above - make sure your system can handle situations where you're right on a city boundary. We had issues where our GPS would ping-pong between two tax rates when parked near city limits, which created some confusing receipts for customers until we figured out how to set a manual override. @Sophie Footman - I'd definitely encourage you to push back more firmly with the owner about getting compliant. The "better safe than sorry" approach of using a higher rate everywhere might seem safer, but as others have mentioned, it can actually create more problems in the long run than just doing it correctly from the start.