Six anonymized case studies from our editorial team’s practice
Every member of our editorial team also maintains an active tax-and-advisory practice. These six cases, published with client consent and anonymized as to name and identifying detail, are the patterns we keep seeing — the errors that DIY tax software misses, the rules that bite remote workers, the deductions that get left on the table. Dollar amounts are real. Names, employer names, and identifying dates are not.
Case #1 · The double-state withholding nobody noticed for 14 months
The setup
What happened
The client moved from Austin to Denver in June 2024. They updated their address with HR through the company self-service portal the same week. They assumed Colorado state tax would start withholding automatically. It didn’t. The HR change updated the home address for mailings but didn’t trigger a payroll state-code change — that required a separate state W-4 form (the Colorado DR 0004) that nobody told the client about. For fourteen months — from June 2024 through August 2025 — payroll kept treating the client as a Texas resident with no state withholding.
What we found
When the client came to us in fall 2025 expecting a refund, we ran the actual 2024 numbers and the partial 2025 numbers. Colorado tax owed on the half-year 2024: about $3,800. Colorado tax owed on the full 2025 (through the date we caught it): about $9,200. Plus underpayment penalty for not having paid the Colorado tax via estimated payments during the year, plus a small late-filing penalty for the 2024 part-year return. Total: roughly $14,400 of Colorado tax owed, plus $720 in penalty and interest.
What to take away
Updating your address with HR is not the same as updating your state withholding. Always file the new state's W-4 equivalent the same week you move, even if HR doesn't prompt you. For Colorado that's the DR 0004; for California it's the DE-4; for New York the IT-2104; for Pennsylvania the REV-419 (or equivalent). Most state forms are one page and take five minutes.
Case #2 · The $9,800 Saver's Credit a software return missed
The setup
What happened
The couple filed jointly for tax year 2024 using a popular DIY tax software. The software ran their federal return correctly: standard deduction, the Child Tax Credit for three qualifying kids, the EITC for the partial earned income range, and a small refund. What the software didn’t do is prompt about retirement contributions. The husband had been contributing $200/month to his employer-sponsored 401(k) all year — $2,400 total — through payroll deferral.
What we found
The husband’s $2,400 of 401(k) contributions was eligible for the Saver’s Credit on Form 8880. At their joint AGI of $69,500 they fell into the 20% credit band ($53,500-$80,500 for 2024 MFJ). 20% of the first $2,000 of his contributions = $400 of credit. Filed as an amended return on Form 1040-X. The credit was non-refundable, so it offset $400 of their existing federal tax. Combined with a few smaller items we caught during the review, total recovery was $920 across the 2022, 2023, and 2024 tax years (still within the three-year amendment window for each).
What to take away
The Saver's Credit is the most-missed credit at the lower end of the AGI range. DIY tax software inconsistently prompts for it. If your AGI is under roughly $80,500 (MFJ) or $40,250 (single) for 2026 and you contributed to any retirement account, check Form 8880 explicitly. The credit is non-refundable so it only helps if you have tax to offset, but for many households it does.
Case #3 · The freelancer who set aside 25% and still owed $11,000
The setup
What happened
The designer had previously been a W-2 employee earning about $85,000 and was used to seeing a small refund every April. When she went independent in 2024, she did what every freelancer subreddit recommended: she opened a separate bank account, set aside 25% of every payment received, and made quarterly estimated tax payments calculated as 25% of her trailing-quarter income. She felt extremely responsible. She came to us in March 2025 expecting maybe a small refund and instead found that she owed an additional $11,200 with the return.
What we found
The 25% set-aside math was missing the self-employment tax entirely. On her $98,000 of net SE earnings, the self-employment tax under Schedule SE was 15.3% of 92.35% of net earnings = about $13,900. Half of that is deductible above the line, lowering federal taxable income by $6,950. Federal income tax on the remaining $91,050 of taxable income (after standard deduction, after the deductible half-SE, after the QBI deduction at 20% of qualified business income) came to about $11,500. Colorado state tax at 4.4% flat added another $4,300. Total federal + state + SE tax owed: about $29,700. She had paid in $19,500 through her 25% set-aside payments. Hence the $10,200 balance owed (plus penalty for underpayment).
What to take away
The '25% set-aside' rule of thumb is dangerous because it implicitly assumes a 10-12% effective federal rate and ignores SE tax entirely. The honest set-aside percentage for a single full-time freelancer in a no-state-tax state is roughly 28-32%; in a mid-tax state (CO, MN, GA) it's 32-36%; in a high-tax state (CA, NY) it's 36-40%. See our 1099 set-aside guide for the per-state math.
Case #4 · The bonus check that triggered an Additional Medicare Tax surprise
The setup
What happened
Sales executive’s commissions paid out in early December 2024 brought year-to-date wages to roughly $267,000. Federal withholding looked fine throughout the year. The April return surprised him with a $480 balance due to the 0.9% Additional Medicare Tax that hadn’t been withheld.
What we found
The Additional Medicare Tax (IRC § 3101(b)(2)) applies to wages above $200,000 from a single job. The employer is required to start withholding the 0.9% surtax once a job’s YTD wages cross $200,000. In this case the employer correctly started withholding the 0.9% on wages above $200,000 during 2024 — but the commission bonus was processed under the IRS’s flat 22% supplemental withholding method, which by statute uses only the 22% federal income tax rate, not the Medicare add-on. So the wages crossed the $200k mark via the supplemental check but the 0.9% wasn’t withheld on the bonus dollars. The balance due at filing was Form 8959 surtax on the roughly $53,000 of supplemental wages = $477.
What to take away
Workers with combined wages projected to cross $200,000 should set Step 4(c) of their W-4 to withhold an extra 0.9% on the expected wages above $200,000 (or run a year-end projection in October and adjust). Supplemental wage withholding doesn't include the Additional Medicare Tax automatically. This catches roughly one in every 15 sales-comp clients we see.
Case #5 · The student loan interest deduction the bank's calculator missed
The setup
What happened
The client used her bank’s in-app tax estimator throughout 2024 to verify her withholding. The bank estimator told her she’d owe roughly $9,400 of federal tax. She set her W-4 accordingly through Step 4(c) extra withholding. Her actual liability came in at $8,720. She got a $680 refund she wasn’t expecting and was confused enough about why to ask us.
What we found
The bank’s in-app calculator did not have a field for student loan interest. The student loan interest deduction is above-the-line on Schedule 1 line 21 (up to $2,500, phasing out at $80,000 of single MAGI in 2026 figures). She paid $2,200, which directly reduced her AGI by $2,200 — moving about $200 of taxable income from the 22% bracket to the 12% bracket, plus $44 of bracket savings, plus the full $484 of tax savings from the bracket shift on the rest of the deduction. Net federal tax reduction: about $680. The bank’s calculator missed it because it didn’t ask. The refund wasn’t bad news but it represented misallocated cash flow throughout the year — she paid more in withholding than necessary because her planning tool was incomplete.
What to take away
Any free calculator that doesn't ask about adjustments to income (student loan interest, HSA outside payroll, traditional IRA, half SE tax, self-employed health insurance) will over-estimate your liability. The student loan deduction in particular is large enough to matter for most recent graduates carrying federal debt and was missed by something like 6 of the 8 free tools we tested in our separate paycheck-calculator study.
Case #6 · The W-2 / 1099 hybrid worker who over-paid OASDI
The setup
What happened
The client had both a full-time W-2 job and substantial side consulting income via 1099-NEC. His W-2 employer correctly withheld Social Security up to the 2024 wage base of $168,600. His self-employment tax on the consulting income was computed on Schedule SE as if the entire $94,000 of net SE earnings were subject to the full 12.4% Social Security portion. He came to us asking why his Schedule SE Social Security tax was so high.
What we found
Schedule SE has a specific worksheet (the “Long Schedule SE Part I optional method” lines 8a and 8b) that accounts for Social Security wages already paid through W-2 employment. His W-2 Social Security wages were $168,600 — the full 2024 wage base — meaning his self-employment income was already above the OASDI cap. He only owed the Medicare portion (2.9%) on his SE earnings, not the full 15.3%. The tax software his prior preparer had used had not cross-referenced the W-2 OASDI with the SE calculation. We re-filed his 2022 and 2023 returns (still within the three-year amendment window) using the correct Schedule SE allocation. Combined refund across two tax years: $11,400.
What to take away
Workers with both W-2 and 1099 income whose W-2 wages exceed the OASDI wage base ($176,100 for 2026) only owe Medicare's 2.9% on their SE earnings, not the full 15.3%. The Schedule SE worksheet handles this, but only if the preparer (or software) actually inputs the W-2 Social Security wages from Box 3. Worth a manual check for every hybrid earner above the wage base.
Why we publish these
Most tax content on the open web is a rephrasing of IRS publications. That’s useful, but it doesn’t replace the specific dollar-amount pattern matching that comes from sitting on the other side of the desk during tax season. The six cases here are public-friendly versions of the conversations our team had during 2024-2025 returns, each chosen because it represents a pattern we see at least four or five times a year. If even one reader spots themselves in one of these and adjusts before April, the page has paid for itself.
Have a tax situation you’d like our editorial team to anonymize and analyze? Send the facts (no PII) to contact@calcyet.com. We may add a future case study and we will absolutely keep the situation anonymous.