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

[sam_gordon]

But everyone will still see a $400 increase in FEDERAL taxes. Social security taxes are a different thing completely.

I know you said it correct, but I just want to make sure people understand, the credit expiration is for 2011 income... meaning it will make a difference filing taxes NEXT year. It is still in place for 2010 income (which we're filing now).

Also, the Making Work Pay credit was only in place for 2009 & 2010. It's not exactly like we've been getting the credit for a decade and it's now going to expire.

And last but not least, it is POSSIBLE Congress can extend the credit during it's work this year.

ETA: If you get paid every other week (as I do), that $400 credit gives you an extra $15 in every paycheck.

 

[roadtripper]

I've read that people are taking more out of their paycheck (pre-tax) to the IRS, but I was wondering if increasing our 410k plans would be just as beneficial. Does anyone know? I figured having extra money in my 401k would be better than just giving it to the IRS....

Thanks for any input.

diznee25

I'm no expert, but DH and I put about 20% of our income in pre-tax retirement accounts, and our tax liability, we were told by a financial planner, is VERY low for our income--about 6%. We don't have any unusual deductions, so I always thought it was the pretax contributions, which lowers our taxable income, of course.

 

[LovableGluttons]

The EIC is a sore subject with me too.

It's like encouraging people who cannot afford one child to go have more.

Why?

How about offering a tax incentive for NOT doing that?


We always pay in.

I pay A LOT in taxes every year, make a decent living that I earned by putting myself through college, sacrifice, and working very hard. Yes, I bought the right to complain with my tax burden! LMAO

 

[rchristiansen]

We're 100% self employed and haven't had a tax refund in 10 years.

I write out a check to the IRS and the state taxes ever 3 months. And also because our income is variable we ALWAYS have to pay in April too.

Oh yeah, and not only do we pay regular income tax but we pay ALL of the medicare/social security tax. And pay our ALL of own health insurance and retirement accounts. No 401k match for us!

OH! And we also have to pay our tax attorney for his time. It's a double whammy. I actually am more scared when I see the envelope from him come in the mailbox because I know it's a big fat bill. UGH.

 

[jennilynn510]

we owed last year & i swear a root canal would have been less painful. i do believe i actually cried

 

[rchristiansen]

we owed last year & i swear a root canal would have been less painful. i do believe i actually cried

I've screamed and cried.

 

[Ava]

I got a big refund last year, because DD was born in 2009 and I didn't adjust my witholdings at all. For 2010 I did adjust them, so we'll see how I make out this year. Last year was the first time I've ever gotten money back from NY state - every year since I moved here I've owed them a little bit, so I was cheering that they were sending me a (small) check this time.

 

[sam_gordon]

I'm no expert, but DH and I put about 20% of our income in pre-tax retirement accounts, and our tax liability, we were told by a financial planner, is VERY low for our income--about 6%. We don't have any unusual deductions, so I always thought it was the pretax contributions, which lowers our taxable income, of course.

Near as I can tell, the tax rate is the same for those making $69K-$139K. (I'm using these numbers as examples). So if you make $100K and don't put into a 401K, you're still in the same tax bracket as someone who makes $100K and puts in 20%.

I still say it comes down to deductions. Someone with mortgage interest, child care, charitable gifts, etc, will pay less. 401K's will help, but not eliminate tax requirements.

Also, for those of you who owe every year or get large refunds, I recommend taking this opportunity to adjust your withholding.

 

[chicagodisneyfan]

Me!

My best estimation is that we will owe around $5,000.

Considering I already withheld $20,000 from my paychecks in 2010, it is crazy.

Every 4/15 we have a ritual - we write our check to the IRS, then generally do a quick weekend out of town to escape from reality.

 

[Marionnette]

Me!

My best estimation is that we will owe around $5,000.

Considering I already withheld $20,000 from my paychecks in 2010, it is crazy.

Every 4/15 we have a ritual - we write our check to the IRS, then generally do a quick weekend out of town to escape from reality.

I like your remedy for tax day blues!

We ALWAYS owe. We plan it that way so the only shocker is the actual dollar amount.

Even if we didn't owe anything, there would be no refund. The "refund" would just get applied to the next quarter's taxes.

 

[nunzia]

The making work pay ($400) credit expired, meaning for 2011 we in effect will pay $400 MORE in taxes, then we did in 2009 & 2010.

that is true...which the 2% SS reduction was supposed to make up for which is just silly, since that system needs all it can get. I have a part time second job that takes out no Fed WH since I make so little, so I get that I have to pay on that..it would just seem that it wouldn't be that much..

 

[livie1205]

We will get a refund this year,we do not get EIC but we have 3 kids we get credit for...my dh claims 0 on his taxes AND we pay into our savings each paycheck.We also dont go spend our return we put into our savings so we are good.I would hate to have to pay uuuggg!

 

[nunzia]

Why would you think we make $250,000 a year, we made way less than $60,000 (my husband and I combined). I'd say that we're lower middle class. So to us $473 is a lot of money! Also we have had our hours cut and haven't had raises in 5 years, so we're living on less too! The only reason we made more this year is because DH worked this year, last year he was laid off 1/2 the year.

I am happy that we don't have to pay in thousands like some people, it's just that we don't have a lot of extra money.

That poster was being sarcastic..I believe referencing that oh so famous statement that taxes wouldn't go up for those who make under 250K which is just a silly statement since they go up and up..
..and I just realized that I bring home about 120 a month on the extra job so how could that income make us owe that much more..when my DH has $80 extra taken out a month..does that mean we'd almost be better off if I didn't work the second job? ..confused..all the time..

 

[dkr7166]

To the OP, double check that you are claiming the Making Work Pay credit. I completely forgot abotu that during my first guesstimate so my refund went up by 400. I think this where be where my dad thought he owed last year as well until he looked at it again.

 

[DawnM]

Sigh. I hate taxes. DH will be doing them as soon as all our info is in.

We haven't paid much for several years as we had a lot of credits (child credits and then adoption credits and itemizing) but our adoption credit is now over and our energy appliance credits were for 2009, so our credits (other than regular child credits) are over. This years isn't looking nearly as promising. I am hoping we don't owe. I don't think we do. DH claimed 0 and I am not working right now.

Dawn

 

[ccgirl]

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.

Just wanted to say.....have a great trip!

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?

It would depend as far as your health insurance. We never pay enough so we can't take it. I just have a CPA figure it out for me. He is a private CPA and is $60.

I got a big refund last year, because DD was born in 2009 and I didn't adjust my witholdings at all. For 2010 I did adjust them, so we'll see how I make out this year. Last year was the first time I've ever gotten money back from NY state - every year since I moved here I've owed them a little bit, so I was cheering that they were sending me a (small) check this time.

We have 2 children and still claim 0 and get a very little refund.

Near as I can tell, the tax rate is the same for those making $69K-$139K. (I'm using these numbers as examples). So if you make $100K and don't put into a 401K, you're still in the same tax bracket as someone who makes $100K and puts in 20%.

I still say it comes down to deductions. Someone with mortgage interest, child care, charitable gifts, etc, will pay less. 401K's will help, but not eliminate tax requirements.

Also, for those of you who owe every year or get large refunds, I recommend taking this opportunity to adjust your withholding.

Deductions are a big thing!!! I would also say that if you get large refunds to adjust the withholdings. I would rather pay myself than Uncle Sam. Meaning, I transfer a certain $$ every month into my savings and when the savings add up transfer it into a CD. That way, I earn interest instead of Uncle Sam keeping my money for no interest.

I feel you as far as paying more and more though. Last year I paid $14K in total taxes (Federal/state/SS/Mcare). I will still have to probably pay more in state taxes. Social Security I will probably never see. Medicare, I do not use (and am grateful for that)...So, before other posters make comments like, "You are lucky enough that you make that much" think about if you would like to work your butt off and then have your money taken and given to others who are not working their butt off. Not saying this is always the case. But, I have seen it all too often to be the case to leave a bad taste in my mouth. Tax time always gets me frustrated. Flame away.

 

[twinboysmom]

Ccgirl, no flames here!

 

[Virgderon]

I feel you as far as paying more and more though. Last year I paid $14K in total taxes (Federal/state/SS/Mcare). I will still have to probably pay more in state taxes. Social Security I will probably never see. Medicare, I do not use (and am grateful for that)...So, before other posters make comments like, "You are lucky enough that you make that much" think about if you would like to work your butt off and then have your money taken and given to others who are not working their butt off. Not saying this is always the case. But, I have seen it all too often to be the case to leave a bad taste in my mouth. Tax time always gets me frustrated. Flame away.

I'm with you.... I really don't want to hear about how lucky I am at this time of the year. Our problem is a new one, caused by the fact that we rent our house in Chicago and can't claim the depreciation. Since there are now millions of people who own homes they can't sell, you would think the government would give us a break for renting it out (at a loss!) instead of walking away and letting another foreclosure hit the books.

But no, instead of getting a break, we get to pay out the nose for the privilege of losing money every single month.

Next year we will put the house on the market. We figure we can make it about 3 months paying for 2 houses ( we rent here ). After that, we will have to stop making the payments and see what happens. After all this pain, I'm afraid we are not going to make any money on the house anyway, and our credit will be destroyed.

So ... one more year of paying outrageous taxes and losing money. Then we let chips fall where they may.

Don't want to hear about how lucky I am to make good money. Luck has nothing to do with it. I also don't want to hear about how terrible of a person I am to walk away from my house if that ends up happening. Enough is enough.

 

[rchristiansen]

I'm with you.... I really don't want to hear about how lucky I am at this time of the year..

Right on! I keep asking my financial advisor how is it that we make more money and seem to have less of it. She said there is a strange window of income that causes the phenomenon. Our lawyers have told us that too.

 

[perdidochas]

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!

It's because she's not getting a tax refund, but rather is getting a tax credit from the government. It was enacted in 1975 for "fairness."