Can someone please help me with a tax question?

[RachelEllen]

The problem you may also be having is that it isn't so simple to determine what is "your" tax burden vs "his" tax burden. Because taxes aren't flat, you are taxed on a lower rate for some income and a higher rate for other income. So, the fairest thing might be to determine your total tax burden and then divide that between the two of you, either equally or based on your total incomes. But, that's still a made-up number. And, it's hard to do since his income will be subject to self employment tax, and so will be taxed at a higher rate.

Then, you have to take into account deductions. Which deductions are "hers" vs "his" vs "ours"? Since "his" deductions still lower "her" tax burden (by removing taxable income from the highest bracket, which is higher rate than her "imaginary" rate taking half the total tax burden)....you see the problem. (Or, I've made a mess of explaining it and you don't. In which case, sorry!)

Your accountant might not have had such a bad idea if you can negiotiate your finances that way. If you can take on the entire tax burden with your withholding, your husband doesn't have to bother with quarterly payments. Can you count that as one of the "bills" that is paid out of your income and match it with "bills" that are paid out of his? Just a thought.

As far as married filing separately, you should definitely run your taxes that way to check, but there are very few situations where it is beneficial. For most people, you end up paying substantially more.

 

[eeyoresmom]

DH pays estimated taxes each quarter.The way we divide financial responsibilities at home, I can't take on the entire tax burden with my witholding, because then I'd have almost no take home pay. Right now I am paying 32% in state, SS and federal taxes. I suspect that I may be carrying a little of DH's tax on his income, but don't feel comfortable mentioning it because the last time I did, accountant told me I should be paying between 20 and 25% to federal alone. So, maybe he is right. ccgirl had a good point. I should just tell DH I want part of this years refund to help pay off my car. I'm just afraid he'll think (maybe rightly), that HE was the one who overpaid if we get a refund.

 

[bumbershoot]

When you're self-employed, you're paying your SS taxes etc. There's almost no chance it could be found that he's OVERpaying.

You were paying 9% and had to pay.

Now you're having money sent quarterly to cover DH's taxes AND you're sending more money from your income; the money the acct said to use was based on NOT sending quarterly. So IMO you're sending far too much with each paycheck. Why not just cut it down?

Did you use the tax calculator someone mentioned in the first or so reply?

We are a single income household, but we used to be double. And back then we were a "single pot" household. It worked for us. I know that many people don't do it that way, because it works for them. Honestly, this doesn't sound like it's working for you. You want to pay off your car but your husband might "take" the money you overpaid. You don't like your accountant but your husband insists on keeping him. etc. Is this working for you at all?

 

[pam95]

I agree. It does sound like you may be having too much withheld. I hope you're able to figure it out.

 

[vicki_c]

Without heading too far down the marriage counselor path (don't want to go there really) - I don't get the whole "I'm paying the taxes or might pay the self-employment taxes" but my DH might think the overpayment is his when I want it for my car. I mean you're either a unit or you're not, right?

 

[eeyoresmom]

Yes, I don't think the accountant does a good job at all. Every year we catch things he missed. My only recourse there is to file seperately I guess. If I told DH I wanted the tax refund to help pay down my car, he probably wouldn't have a problem with it.

 

[msmayor]

Ummm, thank you but I didn't know I could ask for that. I'm a nurse not a tax expert, otherwise I wouldn't be asking for help here Four years ago we ended up owing about 4,000. This accountant told me it was my burden because at the time I was only having about 9% of my gross withheld. He told me I should have at least 20% in just Federal withheld, in fact I think he advised 25%. So that is what I have been doing for the past 4 years. I just figured out I am paying 32% in taxes, which includes state and ss on a salary of 50,000. All I am asking is if this sounds about right. If that can't be answered I am okay with that.

No disrespect to anyone who posts here, but this is really not the community to look for specific tax advice on your situation.

We are homemakers, nurses, firemen, office workers, etc. and you have no idea how much knowledge anyone has about taxes.

Again, NO ONE can tell you if 32% in taxes is 'right' for your situation without reviewing your previous tax returns and completely understanding your personal situation. Its impossible based on a few posts to a message board.

 

[eeyoresmom]

Without heading too far down the marriage counselor path (don't want to go there really) - I don't get the whole "I'm paying the taxes or might pay the self-employment taxes" but my DH might think the overpayment is his when I want it for my car. I mean you're either a unit or you're not, right?

That's a little harsh since you really don't get the whole picture. We are a unit on some things and, on the things that we diagree about, we are not a unit. For example, DH does not beleive we need any retirement savings outside of our real estate holdings. I disagree. So I put money aside specifically for retirement and he continues to invest in real estate. If he has a good year sales wise he pays more to our mortgage that year. I put a rather large portion of my take home pay into a retirement account. Just because we are married doesn't mean we have to agree on or have the same exact goals. In the end, we will both benefit or not by our individual decisions.

 

[eeyoresmom]

No disrespect to anyone who posts here, but this is really not the community to look for specific tax advice on your situation.

We are homemakers, nurses, firemen, office workers, etc. and you have no idea how much knowledge anyone has about taxes.

Again, NO ONE can tell you if 32% in taxes is 'right' for your situation without reviewing your previous tax returns and completely understanding your personal situation. Its impossible based on a few posts to a message board.

That is why I wasn't looking for SPECIFIC tax advice.

 

[msmayor]

That is why I wasn't looking for SPECIFIC tax advice.

I realize that, but you're asking if the percentage of taxes being taken out of your check sounds 'reasonable'. It may be reasonable, it may not be...it all depends on your specific tax situation.

Contributions to 401(k) plans and FSA plans vary widely among employees; some may have only 3-4% withheld for that and others may have almost 20%. The percentage of tax-free deductions affect the percentage of tax withheld from a gross salary amount.

You may be subject to a local tax in addition to state and federal taxes; we don't know that (nor should you really share that...its none of our business). Your state income tax rate may not be the same as someone elses state, and therefore your percentage withheld may be higher or lower than theirs. If they say "35% doesn't seem right" it may very well NOT seem right - to them - but it may be perfectly normal for you.

The point is - you simply shouldn't depend on even the 'general' answers here because they won't really have any meaningful relationship to your specific situation.

 

[mistysue]

With an AGI just over $110,000 and two children our federal withholdings tax paid for 2009 was just under 15%. Because he is self employed, you (as a couple) will owe an extra 10% or so (matching SS and med) on just his income. So if his income is about half, you will probably overall pay somewhere around 20% and technically a little more of that 20% is "his" than "yours."

If you have more than 20% withheld it is probably safe to say you are paying an unfair portion, but I don't know all the details obviously.

 

[prncess674]

How many kids do you have? If you have two (or any even number) then it should be easy to divide your deductions, etc. Your income is nearly even so you create the same tax burden so just take your prior year return and divide all your deductions in half and use only your income and withholdings to calculate your liability. This should let you know how much of the refund is yours.