Do you have a template for that spreadsheet you could share? I've been trying to figure out a good way to track this stuff. Also, when you adjust quarterly, do you have to submit a new W-4 to your employer each time? Is there a limit to how often you can change it?

I don't have a shareable template, but it's pretty straightforward. I just have columns for pay date, gross pay, federal withholding, state withholding, and running totals for the year. Then I use the tax brackets to estimate what I should owe based on current earnings. There's no limit to how many times you can submit a new W-4. Employers are required to implement your new withholding by the start of the first payroll period ending on or after the 30th day after you submit it. Some companies let you update it through their HR portal which makes it much easier. I just go to my payroll department quarterly with a new form - they're used to it now.

That's an interesting approach I hadn't considered! So if we owed $9,000 total last year, as long as we withhold at least that amount throughout this year, we wouldn't face penalties even if we actually owe more come tax time? That could definitely help with the cash flow issue while ensuring we're compliant. Would the 110% rule apply to us since our combined income is over $150k?

Yes, that's exactly right. Since your combined income is over $150,000, you'd need to withhold at least 110% of last year's tax liability to qualify for the safe harbor. So if you owed $9,000 last year, you'd need to withhold at least $9,900 this year. The advantage is that you can distribute this more evenly across your jobs instead of having one job withhold a huge amount. You can calculate exactly how much extra to withhold per paycheck to hit that target. Then any additional amount you might owe, you can save up yourself and earn interest on it until tax day instead of giving it to the IRS early.

That's exactly what I was worried about! Did you end up sticking with them or finding someone else? I definitely need someone who can be proactive about industry-specific deductions.

I switched to a local CPA who specializes in small businesses in creative fields. The difference was night and day. She immediately identified several deductions I'd missed, restructured how I was tracking certain expenses, and even suggested a different business entity structure that's saving me about $3,200 in taxes this year. She charges about 30% more than Counting Work Pros did, but has already saved me way more than that difference. For specialized businesses like yours (and mine), having someone who understands the specific challenges and opportunities really matters.

That's excellent advice. How do you tactfully ask about that though? Seems awkward to bring up audits right away when interviewing a potential accountant.

I had the same issue until I realized the new W-4 doesn't use allowances anymore. You have to put actual dollar amounts for additional income and deductions. I put $200 extra on Line 4(c) for additional withholding and finally got close to breaking even last year.

Same here! My $2,700 refund this year went straight to a down payment fund that I've been trying to build for 2 years. Something about that lump sum makes it easier to put toward a big goal instead of watching it disappear $225 a month.

I guess that makes sense if you know you won't save it otherwise. I just hate the feeling that I'm giving away my money for months when it could be working for me. Different strokes I guess!

I hadn't even thought about state taxes - we're in Washington state. Do different states have their own separate estate tax systems? Is there a way to look this up?

Yes, Washington state definitely has its own estate tax, and the exemption amount is much lower than the federal one - around $2.2 million last I checked. This is exactly the kind of situation where your uncle needs good planning! Washington's estate tax rates are progressive, ranging from about 10% to 20% for larger estates. There are some planning strategies that work specifically for Washington state taxes. You can find the basics on the Washington Department of Revenue website, but this is absolutely something your uncle's estate attorney should be addressing specifically.

Being a trustee doesn't generally create personal tax implications for you. The trust is its own tax entity with its own tax ID number. As trustee, you'll be responsible for ensuring the trust tax returns are filed, but you don't report trust income on your personal return unless you're also a beneficiary receiving distributions.

Wait that's insane! So if I negotiate with my credit card company to settle a debt for less than I owe, I'd have to pay taxes on the amount they forgive? How would that even work with the timing? Like would I get a tax form the next year?

Exactly! The credit card company would send you a 1099-C form (Cancellation of Debt) in January/February of the following year showing the amount of debt that was forgiven, and you'd have to report that as income on your tax return. For example, if you settled a $15,000 debt for $10,000, you'd receive a 1099-C showing $5,000 of cancelled debt, which would be added to your taxable income. The timing can be especially brutal because by the time you get the form, you might have already spent that "savings" or not budgeted for the additional tax liability.

Your friend is partially right but for the wrong reason. The withholding calculations can be different between bi-weekly and monthly payrolls, but your actual tax liability at the end of the year is exactly the same regardless of pay frequency. What happens is that bi-weekly receives 26 paychecks per year (which equals 52 weeks), while monthly receives 12. The withholding tables sometimes calculate slightly differently, which can result in slightly different amounts being withheld. But when you file your actual tax return, it's based on your total annual income, not how frequently you received it.