Roughly 14 million American taxpayers receive an IRS balance-due notice every single filing season, according to the IRS. A significant portion of them are not people who are struggling. They are people who simply did not adjust their payroll withholding when their income jumped — and did not realize the gap until April arrived.
Lucille Dupree, 44, is one of those people. A registered nurse at a Sacramento-area hospital, she earned $115,000 in 2024 after a long-overdue promotion. She also sent approximately $1,100 every month to family members back in Louisiana. And when she sat down to file her taxes in February 2025, she found out she owed the IRS $8,400.
I connected with Lucille through a manager at a local Sacramento credit union who reached out to me after Lucille came in asking about hardship loan options. The manager told me the situation — high income, large family remittances, a surprise tax bill — was more common than most people admitted. Lucille agreed to speak with me on a Thursday afternoon in March 2025, sitting across a small conference table with a coffee she barely touched.
A Raise That Created a Problem She Did Not See Coming
The promotion came through in January 2024. After eleven years at the same hospital system, Lucille moved into a charge nurse supervisory role, and her annual gross salary climbed from $93,000 to $115,000. She described it to me as surreal — the kind of number she had never expected to see on a pay stub.
What she did not do, and what she told me she had no idea she needed to do, was update her W-4 withholding form with her employer’s payroll department. Her withholding had been calibrated for a lower income bracket. As her paychecks got larger, the federal tax withheld each period did not scale proportionally to keep up with her new marginal rate.
She also did what a lot of people do after a meaningful raise: she upgraded. She moved into a slightly larger apartment — still with a roommate, she was quick to point out — and took on a higher car lease payment. Monthly expenses crept from roughly $4,200 to closer to $5,600. The extra cash from the raise felt absorbed almost immediately.
Sending Money Home — and Paying the Price on Paper
Before I asked about the IRS bill, I asked Lucille about the family remittances. She sent money to her mother in Baton Rouge and her younger sister who was dealing with a medical situation. The amount had grown steadily over the years. By 2024, she was wiring $1,100 every month — $900 to her mother, $200 to her sister — through a bank transfer app.
The remittances were non-negotiable in her mind. She did not frame them as generosity. She framed them as obligation. “That’s just what you do,” she told me. “My mom worked two jobs for twenty years. I’m not going to stop sending money because I had a good year.”
What she did not fully grasp until our conversation was that those $13,200 in annual transfers had no tax benefit attached to them. Because her mother did not qualify as a dependent under IRS criteria — her mother filed her own return and received Social Security income — the transfers were simply outgoing cash that reduced Lucille’s actual spendable income without reducing her taxable income. The IRS saw only the $115,000.
Walking Into the Credit Union With the Wrong Question
When Lucille’s tax preparer handed her the $8,400 number in mid-February 2025, she did not call the IRS. She did not research payment options online. She went to her credit union and asked about a personal loan to cover the bill in one shot.
The branch manager — the same one who later contacted me — walked her through the numbers on a personal loan: at her credit profile, she was looking at roughly 11.4% APR on an unsecured loan of that size, which would have cost her an additional $1,100 or more in interest over 24 months. He suggested she look into whether the IRS itself offered payment arrangements before taking on outside debt.
Lucille’s initial reaction, she told me, was dismissive. “Financial advice always sounds like it’s for people with investment accounts and beach houses. I just wanted to pay the bill and move on.” She almost walked out.
But she stayed. And the manager pulled up the IRS Online Payment Agreement tool, walking her through what a direct IRS installment plan would actually cost compared to a personal loan.
Setting Up an IRS Payment Plan — and What It Actually Cost Her
The IRS offers installment agreements for taxpayers who cannot pay their full balance by the April deadline. For balances under $50,000, taxpayers can apply online through the IRS Online Payment Agreement portal without speaking to an agent. The setup fee for a direct debit installment plan is $31 if applied online, compared to $130 for non-direct-debit arrangements.
Lucille qualified easily. With an $8,400 balance and no prior IRS collection history, she was approved within the same session. She set up payments of $350 per month over 24 months, with a direct debit from her checking account on the 15th of each month. The IRS also charges interest — currently set at the federal short-term rate plus 3 percentage points, which as of early 2025 worked out to approximately 8% annually — on any unpaid balance. Her total repayment cost would be roughly $8,780 when interest and the setup fee were included.
The difference — roughly $650 total — was not life-changing. But it was enough that Lucille chose the IRS route. She also learned, through the credit union manager’s suggestion, that she needed to update her W-4 immediately to avoid repeating the same problem in 2025. She filed an updated form with her hospital’s HR department the following week, increasing her withholding by an additional $280 per pay period.
The Part That Still Stings
By the time I spoke with Lucille in March 2025, she was two payments into the installment plan and had already updated her withholding. On paper, the immediate crisis was contained. But she was not at peace with any of it.
She was frustrated — with herself, primarily, but also with a system she felt had never explained its mechanics to her clearly. She pointed out that nobody at her hospital’s HR department told her that a $22,000 raise meant she should revisit her W-4. “They handed me the new contract and said congratulations. That was it.”
She also had not changed her remittance habits. She was still sending $1,100 a month to Louisiana. She said she would not stop, and she said it in a tone that made clear the topic was not up for further exploration. What she had started doing — reluctantly — was tracking every outgoing transfer in a notes app on her phone. A small act of awareness she had previously resisted for years.
When I asked her what she would tell another nurse who just got a raise, she paused for a long moment. “I’d tell them to go find out what their new withholding should be before they spend a single dollar of the extra money. Because the raise isn’t really yours until you know what the IRS is going to take.”
What stays with me from that conversation is not the dollar amount. It is the specific combination of pride and exhaustion that Lucille carried into that credit union. She had done everything right by her family’s standard. She had worked her way into a six-figure income in a profession that demands relentless physical and emotional output. And the tax code had not noticed or rewarded any of that context.
The IRS payment plan was not a victory. It was a patch. Lucille knew it. She said as much as she stood up to leave. “I’m not fixed,” she told me. “I just bought myself some time.” Then she picked up her untouched coffee, dumped it in the trash by the door, and walked out into the Sacramento afternoon.
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