Budget Buster! Anybody else having to pay in on their federal taxes this year?

[traces7]

I'm so upset! I just roughly did our taxes and it looks like we have to pay in $473 this year! UGHHH! I'm not even going to file them until way later than!

I'm not sure why this happened! Last year DH was unemployed most of the year, he worked all this year. He made double what I did. And they took way more federal taxes out of his paycheck $2299, they only took $625 out of mine. So I think that's why we have to pay in. But than last year we had less taxes taken out because of the Making Work Pay thing. I'm so confused on what to do next year so we don't have to pay in.

Has anyone else had this problem? Last year we got back $1100 from federal, we did make about $13,000 more than last year though. I'm really disappointed I was hoping for some kind of refund. We don't make a lot of money, I'd say we're in the lower lower middle class!

 

[gracie1]

Tax time can be frustrating, especially if you have to pay in! I cringe when I get mine done because I never know whether I am getting anything back. Fortunately for me, last year even though they took less taxes out of everyone, my payroll company took more than the previous year. So I am hoping that I am okay this year. Still waiting on tax forms to come in though.

 

[Virgderon]

I feel your pain. We are going to owe about $4000, just like last year. What is killing us is that we can't claim the depreciation and expenses on our house in Chicago until we actually sell the house. We have renters that are friends, and they want to stay another year. Its very depressing- we have to put our taxes on a payment plan that costs us about $400 a month. If I ever get a refund I will jump for a joy!

 

[Crazy4Disney06]

To avoid paying taxes you might want to change your with holdings on your W4.
My husband makes good money and because of that he needs to claim zero on his W4 to make sure enough taxes are held out of his paycheck so that we don't owe. I also claim only 1 (we are a family of 4) and have an additional amount held out each paycheck as well of $10 dollars. Not much but at the end of the year it makes a difference and we have never owed since we started doing this.

 

[My2BabiesLexis&Dill]

One thing that is hurting you is that last year on the unemployment. I'm not sure how to explain it but they passed a bill that we didn't have to pay taxes on the first 2,000 or some effect of that.

This year we don't have unemployment and we made almost 15,000 more than last year. Last year we got back over 5,000 and this year 600.00. I'm just thankful that we don't pay in but I'm really missing that big check at the beginning of the year to pay for our trip. So for this year...our trip is cancelled. `

 

[traces7]

To avoid paying taxes you might want to change your with holdings on your W4.
My husband makes good money and because of that he needs to claim zero on his W4 to make sure enough taxes are held out of his paycheck so that we don't owe. I also claim only 1 (we are a family of 4) and have an additional amount held out each paycheck as well of $10 dollars. Not much but at the end of the year it makes a difference and we have never owed since we started doing this.

We both already claim zero (we're a family of 3), but I think we'll have to have extra withheld. But this year we're back to our normal taxes being taken out, so we might be ok. I may have a little extra taken out just in case. (My paycheck is so small already!) We don't even make "good" money in my opinion! I just don't get it!

 

[traces7]

One thing that is hurting you is that last year on the unemployment. I'm not sure how to explain it but they passed a bill that we didn't have to pay taxes on the first 2,000 or some effect of that.

This year we don't have unemployment and we made almost 15,000 more than last year. Last year we got back over 5,000 and this year 600.00. I'm just thankful that we don't pay in but I'm really missing that big check at the beginning of the year to pay for our trip. So for this year...our trip is cancelled. `

Your situation sounds similar to ours! We made about $13,000 more than last year and I still had $960 in unemployment this year, which now I got taxed on this year. I looked back to last year's taxes and saw that you could make $2400 I think and not get taxed, not this year! So, that probably put us over too.

I'm really bummed out! I was hoping for some kind of refund, we really need a new vehicle!

 

[hffmnheidi]

I'm getting a nice refund this year.

I returned to work in Aug(off on extended medical since Oct 09) worked part-time Aug and Sept and then full-time the rest of the year.

I only made 6900 when the standard deduction is 8400 per head of household and I get the federal and state earned income credits of 437/238(IL), plus I have unreimbersed medical expenses(no health insurance) and work unreimbersed expenses.

 

[traces7]

I'm getting a nice refund this year.

I returned to work in Aug(off on extended medical since Oct 09) worked part-time Aug and Sept and then full-time the rest of the year.

I only made 6900 when the standard deduction is 8400 per head of household and I get the federal and state earned income credits of 437/238(IL), plus I have unreimbersed medical expenses(no health insurance) and work unreimbersed expenses.

This is just what I don't understand, how come you can make such little income and get so much back, I don't get it. No offense to you.

We pay in so much, I figured out that $10,000 is taken out of my paycheck yearly for health insurance, taxes, social security, etc. (Our health insurance is really expensive) Doesn't seem right! Some people get way more back than they ever pay in and others just have to pay more and more and more!

 

[cm8]

I'm so upset! I just roughly did our taxes and it looks like we have to pay in $473 this year! UGHHH! I'm not even going to file them until way later than!

I'm not sure why this happened! Last year DH was unemployed most of the year, he worked all this year. He made double what I did. And they took way more federal taxes out of his paycheck $2299, they only took $625 out of mine. So I think that's why we have to pay in. But than last year we had less taxes taken out because of the Making Work Pay thing. I'm so confused on what to do next year so we don't have to pay in.

Has anyone else had this problem? Last year we got back $1100 from federal, we did make about $13,000 more than last year though. I'm really disappointed I was hoping for some kind of refund. We don't make a lot of money, I'd say we're in the lower lower middle class!

We pay $$$$$ through the nose already. Then last year a wind energy group leased 4acres of land that we own out west at a tune of $30,000 for each wind turbine placed on the land. They have completed one and have 3 more to go. I so don't want to see the taxes of that when it arrives.

I know a lot of people who are not going to be happy about having to pay taxes. It's not fun when you are depending on that money too

 

[twinboysmom]

What is a refund????
Seriously, I have always paid something and since we got married, even more. We carry a heavy mortgage, have 2 children, and I barely work anymore. We still paid last year. Deductions are single and zero. Most frustrating. I see all the posts about tax refunds and I want to pull my hair out.

 

[disneychrista]

There are worksheets that can help you figure out what you need/should be claiming based on your situation. You can also use the withholding calculator on IRS.gov.

Don't forget that you have to look at the whole picture, not just your wages. Many forget to figure in inventment income, interest etc.

 

[traces7]

There are worksheets that can help you figure out what you need/should be claiming based on your situation. You can also use the withholding calculator on IRS.gov.

Don't forget that you have to look at the whole picture, not just your wages. Many forget to figure in inventment income, interest etc.

Thanks I'll check out the worksheets and see what it says for us. We don't have any investment income, or any other income, just our normal wages (which aren't very high). And a little interest (only $32.00 this year). Our tax system just seems so unfair!

 

[Boston Tea Party]

Yes, we will owe. We owe every year. I am not even going to look at it until after our trip to Disneyland. I don't care what the fiscally responsible flamers say, Disneyland comes first. My father has terminal prostate cancer and my mom is three weeks triple bypass post-op. They decided they were well enough to go and bought their plane tickets so, by God, we are going come hell or high water, I don't give a crap how much farther Uncle Sam tries to stick his hand in my pocket. I'm pretty sure at this point he's reaching for the money I keep in my shoe. Yes, it is a sore subject with me.

 

[Karenj2]

I'm pretty sure we'll owe this year, probably a couple $K, but it's not a budget buster for us because we also did "flexible spending" and "dependent care" where it got taken out of our paycheck pre tax, and we get it back without being taxed, so we're going to use that money to pay our taxes.

 

[sherry7]

To avoid paying taxes you might want to change your with holdings on your W4.
My husband makes good money and because of that he needs to claim zero on his W4 to make sure enough taxes are held out of his paycheck so that we don't owe. I also claim only 1 (we are a family of 4) and have an additional amount held out each paycheck as well of $10 dollars. Not much but at the end of the year it makes a difference and we have never owed since we started doing this.

We do the same, except we claim only 1 exemption. It usually works out well, and we get a few hundred dollars back. I hate having to pay, but I don't want a huge refund either since Uncle Sam doesn't deserve to have an interest free loan of my money. We have a new little tax deduction now though, so I might have to adjust our withholding this year.

 

[JaymeC]

This is just what I don't understand, how come you can make such little income and get so much back, I don't get it. No offense to you.

We pay in so much, I figured out that $10,000 is taken out of my paycheck yearly for health insurance, taxes, social security, etc. (Our health insurance is really expensive) Doesn't seem right! Some people get way more back than they ever pay in and others just have to pay more and more and more!

Half of all Americans won't pay ANY taxes. The other half... well. And many in the half that don't pay any taxes will receive additional funds back on top of not paying in. That's what all those tax credits are for. A tax deduction reduces how much you have to pay in, but a tax credit (child tax credit, or the earned income tax credit) pays over and beyond what you paid in if that makes sense? So if you're tax liability is 0 and you have one child and qualify for $2000 in EIC you could potentially be getting $3k back even if you did not pay a penny in federal taxes (though of course everyone pays the same medicare taxes). It was set up as a way to help lower income individuals and families, but honestly I think it's backfired into people expecting that money yearly and not understanding that other people have to pay for it.

 

[peggster]

Half of all Americans won't pay ANY taxes. The other half... well. And many in the half that don't pay any taxes will receive additional funds back on top of not paying in. That's what all those tax credits are for. A tax deduction reduces how much you have to pay in, but a tax credit (child tax credit, or the earned income tax credit) pays over and beyond what you paid in if that makes sense? So if you're tax liability is 0 and you have one child and qualify for $2000 in EIC you could potentially be getting $3k back even if you did not pay a penny in federal taxes (though of course everyone pays the same medicare taxes). It was set up as a way to help lower income individuals and families, but honestly I think it's backfired into people expecting that money yearly and not understanding that other people have to pay for it.

The bolded part (emphasis mine) is partially true. Both deductions and tax credits reduce your tax liability, but credits do so directly. Deductions reduce your taxable income, so you're really getting a percentage off your taxes for any deductions depending on your tax bracket. Tax credits, on the other, are a dollar-for-dollar reduction of your tax liability. So for example, if your marginal tax rate is 15%, a $1000 deduction will save you $150 off your tax liability, but a $1000 credit will save you $1000.

Also, some tax credits are refundable (like those you cited, EIC and child), but not all are (for example, the tuition credit). For example, say your tax liability was $500, and you had a $1000 tax credit. If the credit is refundable, you would get a refund of $500. If the credit is non-refundable, you get $0; instead of a refund, you just wouldn't owe any tax.

To the OP: Are you itemizing deductions or taking the standard deduction? Have you looked at all of your expenses to make sure that you're taking every deduction you're entitled to? For example, you mentioned health insurance being a large expense. Is that being deducted from your paycheck pre-tax? If not, you may be able to deduct that expense, depending on how much it is. It does sound like the unemployment situation from last year is throwing things off, but now would be a good time, as others have said, to plan for next tax year. Good luck!

 

[traces7]

The bolded part (emphasis mine) is partially true. Both deductions and tax credits reduce your tax liability, but credits do so directly. Deductions reduce your taxable income, so you're really getting a percentage off your taxes for any deductions depending on your tax bracket. Tax credits, on the other, are a dollar-for-dollar reduction of your tax liability. So for example, if your marginal tax rate is 15%, a $1000 deduction will save you $150 off your tax liability, but a $1000 credit will save you $1000.

Also, some tax credits are refundable (like those you cited, EIC and child), but not all are (for example, the tuition credit). For example, say your tax liability was $500, and you had a $1000 tax credit. If the credit is refundable, you would get a refund of $500. If the credit is non-refundable, you get $0; instead of a refund, you just wouldn't owe any tax.

To the OP: Are you itemizing deductions or taking the standard deduction? Have you looked at all of your expenses to make sure that you're taking every deduction you're entitled to? For example, you mentioned health insurance being a large expense. Is that being deducted from your paycheck pre-tax? If not, you may be able to deduct that expense, depending on how much it is. It does sound like the unemployment situation from last year is throwing things off, but now would be a good time, as others have said, to plan for next tax year. Good luck!

Thanks for the advice. Yes the health insurance is deducted from my paycheck pretax, so than you can't claim it right? We don't really have many deductions to take. Our home is almost paid for, so we can't even claim mortgage interest anymore. We take the standard deduction because all our itemized deductions come up to less than the standard. I think I'm going to take our taxes in to a professional and get some advice on what to do and also see if they can find any other deducitons. I know it will cost a lot, but just thought I'd give it a try. Anyone know what they charge if you take your taxes in to a professional?

 

[nunzia]

Yep..have to pay again...we both claim 0, and DH has $80.00 extra a month taken out and we will still owe $283..not as bad as previous years, but still...I don't get it..we make the average household income and follow all the guidelines and still have to pay. Plus..did you all notice that even though they lowered SS tax 2% they raised Fed witholding? sneaky sneaky...out of my big $25.00 a paycheck raise, I bring home $13.00 more...I should just mail my money to China and avoid the middleman..