Personal Income Taxes (pay, million, credit, mortgage)
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My wife and I make salaries that are not close to each other. she makes probably about 50% more than i do. for two years now, since her employer has updated her status to married, we have owed a fair amount of taxes come april 15th. i have my deductions at 0, and so does she, and we own a house so we should have had plenty of things to deduct (though, i realize the standard deduction does already get us to $11,000 right, so our mortgage interest and such gets us higher, but it's not like we were deducting nothing before).
this is the first year we owned a home, so we don't owe as much as we did last year, due to the extra deductions. but i'm stumped. is it because her employer doesn't withhold enough? can we have them withhold extra?
Sounds like your employer (and hers!) aren't witholding enough.
I had the same problem the immediate year after I got married. Huge tax bill, and a penalty for not paying in enough. *ugh*.
You can have them withold extra from your paycheck for taxes. The liability doesn't change too much from year to year. If nothing else - you can take your total tax liability from this year and divide it by 12 and then figure out what SHOULD have been witheld each month. Then adjust your own witholdings to get closer to that #.
Why would you want the tax man to hold on to more of you dough than they need to? It does you no good to "get a refund" when that money is YOURS and the taxman had it ALL YEAR with NO INTEREST!
Online withholding calculator is useful.
Pay the minimum so you don't have penalty and then BUDGET for any extra...
Why would you want the tax man to hold on to more of you dough than they need to? It does you no good to "get a refund" when that money is YOURS and the taxman had it ALL YEAR with NO INTEREST!
Online withholding calculator is useful.
Pay the minimum so you don't have penalty and then BUDGET for any extra...
well, i am not angry that i owe. i'd be more unhappy if i was getting money back for the reasons you said above. but...i'd like to be closer to even when i do my taxes.
Briolat21 - if we're both claiming 0, there's nothing else we can do except have them withhold more. which honestly, is a pain. i don't understand why this is so complicated. lol.
Why would you want the tax man to hold on to more of you dough than they need to? It does you no good to "get a refund" when that money is YOURS and the taxman had it ALL YEAR with NO INTEREST!
LOL.
That comment would have made a lot of sense in 1981.....or 1991...or even 2001.
But this is 2011 when banks are paying 1/10 of 1% interest.
So, no, I don't think it matters at this point in time if people lose out on a buck or two of interest (if that) if they enjoy the feeling of getting a big refund when they file.
if we're both claiming 0, there's nothing else we can do except have them withhold more. which honestly, is a pain. i don't understand why this is so complicated. lol.
Fill out a new W-4. There is an option on there to just have an additional amount taken out - line 6.
But I would strongly suggest using the withholding calculator online, or the adjustment worksheets that are part of the W-4. That will help you get as close to the number you want withheld as you can.
Remember that in 2009 and 2010, the withholding was less because of the "make work pay credit". So if your wife's w4 was married 0, and your w4 was married 0, you both received $800 more in your paychecks for those years ($1600)....but....you only received 1 $800 credit on your tax return, resulting in $800 shortage.
You should have noticed the withholding change back to what they were suppose to be starting in 2011 because the "make work pay credit" expired in 2010.
So before you change your w4s, consider that you should be $800 better for tax year 2011.
Also, you can change your w4 to Single, even if you are Married and that will result in more withholding.
Remember that in 2009 and 2010, the withholding was less because of the "make work pay credit". So if your wife's w4 was married 0, and your w4 was married 0, you both received $800 more in your paychecks for those years ($1600)....but....you only received 1 $800 credit on your tax return, resulting in $800 shortage.
You should have noticed the withholding change back to what they were suppose to be starting in 2011 because the "make work pay credit" expired in 2010.
So before you change your w4s, consider that you should be $800 better for tax year 2011.
Also, you can change your w4 to Single, even if you are Married and that will result in more withholding.
i think we're both beyond getting that credit though. but it may have effected the withholding for the year. even after our interest deduction for home ownership for 9 months out of 2010, we owe close to $2,500 in federal.
again, it's not upsetting to me. i don't want a $2,000 refund, because even at the 1.4% i get in my money market, it's still 1.4% I get. but i just want to be close to $0
Are you using a professional tax preparer, or are you using tax software to complete your taxes? My wife and I use to use H&R block for years; we decided to use a CPA this time, and well...let's just say that we were amazed at all the stuff we missed out on for years going to H&R Block. We had to pay more money to the CPA, but overall it was worth it. I'm sure everyone's situation is different, but I'm sticking with professionals from now on. Maybe you should think about it.
Are you using a professional tax preparer, or are you using tax software to complete your taxes? My wife and I use to use H&R block for years; we decided to use a CPA this time, and well...let's just say that we were amazed at all the stuff we missed out on for years going to H&R Block. We had to pay more money to the CPA, but overall it was worth it. I'm sure everyone's situation is different, but I'm sticking with professionals from now on. Maybe you should think about it.
well, i used a CPA last year and this year because of my home purchase. but i've done it in turbo tax myself, and it's pretty straightforward. i just wanted to make sure i got everything i could from the closing costs and wasn't confident i would myself.
but it truly is just plugging in numbers.
i'd love to meet with someone who can give me tax advice. it's not like i'm raking in millions, but there might be some things i could do strategically to minimize my tax liability.
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