State Taxes---vent

[torinsmom]

Okay, so how come I can get $2200 back in federal taxes, but yet have to pay $230 in NC state taxes? I just don't get it---they already have a sales tax of around 7% and tax us out the wazoo for buying a car, house, etc. Just doesn't make sense to me that I would have a nice refund from the federal, but have to pay part of it to the state. Anyone else in the same boat?

BTW, haven't actually filed my taxes yet, just put in the info I have on the taxact website. So, maybe I am overlooking some deductions somewhere. Guess I'll know in a few weeks.....

Marsha

 

[delmar411]

we always owe to state. Not sure why Dh's jobs have never been able to remove the correct amounts from his checks but there are very little deductions for state filing. It's been that way no matter what state we've lived in. I'm happy if we only owe around $50, means the company did a pretty good job of taking out taxes.

This year we are going to owe well over $1000 according to Taxact. Hopefully when his W2's come in we'll have paid in enough to offset a chunk of that.

 

[barbeml]

I can't remember the last time we got a refund.

In NJ we pay 7% sales tax, at least 2% state income tax and the highest property taxes in the nation.

 

[Karenj2]

That's the same with us - we usually get a refund from the IRS, and owe (usually under $500) to the state, and owe about $30 to our local.

I'm *trying* to get it so that we only get a little bit back from the IRS, but our lives keep changing, so it's hard to figure out how to get it closer to zero... This year is completely an unknown, because we've had high medical bills, so we're going to see if/what of that can be deducted. Next year will be another unknown, because we'll have our baby!!

 

[Poohbug]

I hear ya!


We always owe for State taxes and get Federal returns. On top of that the State of WI will add on a penalty if you end up owing them money. nice.

 

[Mary2e]

Okay, so how come I can get $2200 back in federal taxes, but yet have to pay $230 in NC state taxes?

You get federal taxes back because you're having too much withheld from your check, and in effect, giving the federal govt and interest free loan. You have to pay NC taxes because you don't withhold enough. However, since it's only $230, you may not want to bother adjusting the withholdings.

I just don't get it---they already have a sales tax of around 7% and tax us out the wazoo for buying a car, house, etc. Just doesn't make sense to me that I would have a nice refund from the federal, but have to pay part of it to the state. Anyone else in the same boat?

Sales taxes have nothing to do with income taxes.

FWIW - I would rather owe money to the govt than get a refund. I plan it that way. I'd rather earn interest on it for a year than give it to the govt only to get it back.

 

[terrier72]

You should look at how much in federal taxes you pay, in our state I paid almost 5 times more in federal taxes last year than state.

 

[yitbos96bb]

Okay, so how come I can get $2200 back in federal taxes, but yet have to pay $230 in NC state taxes? I just don't get it---they already have a sales tax of around 7% and tax us out the wazoo for buying a car, house, etc. Just doesn't make sense to me that I would have a nice refund from the federal, but have to pay part of it to the state. Anyone else in the same boat?

BTW, haven't actually filed my taxes yet, just put in the info I have on the taxact website. So, maybe I am overlooking some deductions somewhere. Guess I'll know in a few weeks.....

Marsha

Usually its because there are far more federal deductions than State deductions. We have a flat state tax in Illinois and I have had the issue of the employer not taking enough out... I usually have them take an extra $5-10 a paycheck out which usually keeps me from owing... sadly it usually is still a refund less than $100

 

[StitchandPooh'sMom]

We always owe NC taxes even if we get a federal refund. We e-file our federal return, get the refund, then mail the NC return at the last minute.

I don't know why the withholding is not set up similarly, but NC seems to disallow many of our federal deductions.

 

[yitbos96bb]

You get federal taxes back because you're having too much withheld from your check, and in effect, giving the federal govt and interest free loan. You have to pay NC taxes because you don't withhold enough. However, since it's only $230, you may not want to bother adjusting the withholdings.

Sales taxes have nothing to do with income taxes.

FWIW - I would rather owe money to the govt than get a refund. I plan it that way. I'd rather earn interest on it for a year than give it to the govt only to get it back.

In theory I agree with you... the problem is making sure you actually HAVE the money when its due....

 

[maxiesmom]

I have the same problem. I always have to pay extra to Michigan, but get a good chunk back from the Feds. It is wierd.

 

[kfeuer]

OP, this may not work in your situation but in the past I've found that sometimes we came out better overall by taking the standard federal deduction rather then itemizing. Using the standard deduction changed the state taxes for the better and federal for the worse, but overall we got more back. It's easy to check on TaxAct so it's worth a shot.

I'm glad I don't have to worry about filing state taxes anymore (don't worry, they get their pound of flesh in other ways ).

 

[dfchelbay]

Okay, so how come I can get $2200 back in federal taxes, but yet have to pay $230 in NC state taxes? I just don't get it---they already have a sales tax of around 7% and tax us out the wazoo for buying a car, house, etc. Just doesn't make sense to me that I would have a nice refund from the federal, but have to pay part of it to the state. Anyone else in the same boat?

BTW, haven't actually filed my taxes yet, just put in the info I have on the taxact website. So, maybe I am overlooking some deductions somewhere. Guess I'll know in a few weeks.....

Marsha

I have a silver lining for you:

If you did get a state refund, you would have to declare it on next years federal return...thieves.

 

[jmminarik]

Pennsylvania has a nice flat tax, with only a handful of deductions for work related expenses. Makes for a simple tax return. We typically owe a few bucks every year simply because the banks don't withhold for interest...and near as I can recall, I've never seen an option for withholding 'more' for the PA income tax through work.

Philly has a wage tax...another straight percentage. Not sure i ever even heard of a return for Philadelphia though I suppose there's something for the self-employed.

 

[minnie1928]

Pennsylvania has a nice flat tax, with only a handful of deductions for work related expenses. Makes for a simple tax return. We typically owe a few bucks every year simply because the banks don't withhold for interest...and near as I can recall, I've never seen an option for withholding 'more' for the PA income tax through work.

Philly has a wage tax...another straight percentage. Not sure i ever even heard of a return for Philadelphia though I suppose there's something for the self-employed.

I miss the ease of PA taxes. Nothing like a * b = c! I usually owed PA each year due to interest and dividends, but nothing terribly huge.

 

[torinsmom]

I LIKE getting a big refund. I know I could change my withholding and get say $100 more a month, but that would disappear. I use my tax refund for our summer vacation. I guess I just need to adjust my withholding for state for 2010.

MArsha

 

[DisneyLover83]

We are in NC also and we have the same issue every year. We get back a few hundred from federal and always owe the state around $500-530. You are not alone!

 

[mnrose]

Honestly, I've never understood the excitement over tax refunds. All a refund means is that the government has had interest free use of your money. Why is that good? I love paying in (well, love might be a strong word...) because it means I've had interest free use of money that I owed to Uncle Sam (and the state equivalent). If I get a refund, I feel like I've failed in maximizing the use of my money. I feel best when I owe the maximum I can owe without paying a penalty.

 

[mnrose]

FWIW - I would rather owe money to the govt than get a refund. I plan it that way. I'd rather earn interest on it for a year than give it to the govt only to get it back.

I should have read your answer first. My philosophy exactly.

And, it's actually easy to set money aside. If you previously had $200 a month taken (for example), and change your withholding to have only $150 withheld, take the extra $50 a month and put it in a savings account. It takes discipline, but it's better than the alternative in my book.

 

[Diabolicdesire]

I filed taxed in NC for the first time last year and had the same prob. I was using the same exemptions for Fed and state. For 2009 I left my Fed the same but lowered the state to 2, we'll see in a few short weeks if it did any good. I really hope I don't end up owing. I'm originally from FL and think this whole state tax is a crock