Tax Withholding

[clutter]

It was the reverse for us. We owe the feds $1100, but we're getting back $900 from the state.

I would REALLY like it if I could somehow make it come out even!

It's pretty simple. Change your federal W-4 and your state form as well. In your case, you'll want to drop an exemption from fed (if you're cliaming 5 change it to 4) and increase your exemptions for the state. The number of exemptions you claim doesn't have to relate to the number of people in your home. You can adjust based on your deductions. So Bicker, I'd change yours to maybe 5 or 6 exemptions for Fed, and check your state and have an additional $90/month withheld.

 

[Nette]

Yeah, but then you would have to live in Texas.

I Texas... especially since there are no state income taxes... But really only Austin.

 

[bicker]

Do you always have so much extra withheld on the federal taxes???

We don't have anything (specifically) "extra withheld" for federal taxes -- only for state taxes.

if so, that might be your problem.

The federal situation is easy to resolve, afaic, and not really the context of my concern. Rather, I'm concerned about how the one setting which my employer allows me results in such a disparity between federal and state, with one a big refund, and one an amount due, close to incurring a penalty.

When you did your taxes LAST year, you deducted the amount of taxes withheld on your MA state tax form (as taxes paid). This year, you had to "claim" the big refund (since you deducted it last year as taxes paid, but the taxes really weren't paid, because the feds sent it back to you) Therefore it looks like you made more money than what was withheld. Make sense???

No, that's not actually the situation. In the case of state taxes, I owed (a lot) last year, and owed (almost "a lot") this year. No change. In the case of federal taxes, I had a big refund last year, and a really big refund this year.

 

[bicker]

Our overall tax burden is higher then "Taxachusetts" so I don't really feel sorry for you Mass. isn't even in the top 20 for overall tax burden.

http://money.cnn.com/2009/04/10/pf/taxes/state_tax_rates/index.htm

Yeah, that is indeed the case. As much as I have this little bit of frustration with my employer effectively underwithholding for state taxes, otherwise, this is a great state to live in, with regard to services to the citizens and the tax burden on both individuals and businesses. I have a few friends who moved to New Hampshire 10-15 years ago to escape "Taxachusettes" who are kicking themselves in the butt for having been so short-sighted.