Any tax preparers out there?

[torinsmom]

I live in NC. Every year, I get back a big federal refund($2000 or so), but I ALWAYS owe state taxes(usually $100-$400). I don't understand why that is. This year, because of a lot of tuition I paid, its looking like I will get around $4300 back from federal, but I will still owe $359 to my state. I have 2 exemptions for both federal and state. Witholding status for federal says S and for state, it says H. Could that be the reason for my owing?

 

[jlewisinsyr]

H is probably head of household and federal is single. It sounds like your state, in most years, is spot on perfect and you are being WAY over deducted in Federal during the year.

People get excited when they get big returns, but its nothing but your money, that you over paid to the government over the course of the year and provided them what works out to be an interest free loan.

 

[tvguy]

I have the same problem. I'm in California. My CPS says the problem is California is raising taxes and eliminating deducations due to the recession while the Federal government is lowering taxes and adding deductions.

 

[torinsmom]

I know its my money, but I like to get it all as one big payment instead of getting $150-$200 extra per month. That would evaporate pretty quickly around here. I prefer to budget and stretch my dollars all year and use my refund for my vacation and other bigger expenses. This year is more than twice what I got last year, but it is because I laid out $8300 for a Masters Degree program. I would have had to wait to be credited for that anyway.

I was just wondering why state is so different. I have had others from NC say that they never have to pay state taxes, even when they get a very small refund. If I had my withholding for state switched to single as well, would they take a little more money out? I hate writing that check in April.

 

[golfgal]

Because your state taxes at a different rate then the federal government and the deductions are not the same in your state as they are on the federal form. Our state refund is ALWAYS lower then federal. You can still have 2 deductions for state and not have as much tax taken out. If you want to eliminate that $400 payment, have your employer take out an extra $400/year for state.

 

[tar heel]

As a single mom who is in school, you're no doubt qualifying for some federal credits/deductions that we don't have in North Carolina or that are much smaller on the state taxes.

We have more state exemptions on withholding than federal at our house.

 

[torinsmom]

As a single mom who is in school, you're no doubt qualifying for some federal credits/deductions that we don't have in North Carolina or that are much smaller on the state taxes.

We have more state exemptions on withholding than federal at our house.

So I can have more for state than federal? If so, that is what I will look into.

 

[jekajekalynn]

I have the same problem. I'm in California. My CPS says the problem is California is raising taxes and eliminating deducations due to the recession while the Federal government is lowering taxes and adding deductions.

This... The same thing is happening to our Michigan taxes, we might actually owe some this year instead of getting a little bit of a refund.

 

[tar heel]

So I can have more for state than federal? If so, that is what I will look into.

Yes. The forms for federal and state are separate.

I will probably change ours at some point this year. Our youngest turns 17, so no more child credit for him. Our middle son graduates from college in May. It's too early at this point to determine whether he will be our dependent for 2011 or claim himself -- depends on what kind of job he works after May. This is also our first full year of my DH's new, lower salary, which throws another kink in.