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Started By
Message
2013 Taxes: MFJ w/ 0 allowances, still have tax balance
Posted on 3/24/14 at 2:30 pm
Posted on 3/24/14 at 2:30 pm
So the wife and I are doing our taxes, thinking we will be getting a refund, b/c both of us have been witholding at MFJ 0 for all of 2013. We add up our income, subract standard deduction, student loans, and claim ourselves (no children). Our AGI was around 105k. We withheld around 14.5k.
Looking at tax form 1040, we're shocked when we figure out our tax liability is 17.75k. That's a tax balance of 3.3k!
Has this happened to anyone else?
Looking at tax form 1040, we're shocked when we figure out our tax liability is 17.75k. That's a tax balance of 3.3k!
Has this happened to anyone else?
3
Posted on 3/24/14 at 2:50 pm to NYNolaguy1
Your AGI is over 100k and you think 17% tax rate with no kids is high?
You might want to make sure enough is actually being held.
You might want to make sure enough is actually being held.
This post was edited on 3/24/14 at 2:50 pm
Posted on 3/24/14 at 2:51 pm to ell_13
quote:
Your AGI is over 100k and you think 17% tax rate with no kids is high?
Posted on 3/24/14 at 3:17 pm to ell_13
quote:
Your AGI is over 100k and you think 17% tax rate with no kids is high?
Considering between NYC, NYS, and federal income taxes we withheld a total of 25k (that's not including Social Security or Medicare)... yes I think it's ridiculous. Yes- I also realize it's not the IRS's fault for me living in a money sucking place.
quote:
You might want to make sure enough is actually being held.
I guess I just always assumed that if we had no allowances, that we'd be playing it safe. This is the first full year we've been married. I'm the first person I know that will have to be asking my employer to withhold more, or go back to filling out my W4 as if I were single again. What's the point of Married Filing Jointly if their tables are totally off?
Posted on 3/24/14 at 3:46 pm to NYNolaguy1
i claimed married on the W2 when I first got married and never again. Single 0 that shite or you will be paying come april
Posted on 3/24/14 at 4:25 pm to NYNolaguy1
I feel your pain, there is a big difference on just GA state tax here when one can't itemize versus taking a standard deduction, it is significant money.
You can start, or contribute more, to traditional 401k's or deductible traditional IRAs as one way to reduce taxable income or have your employers withhold additional amounts per pay period.
You can start, or contribute more, to traditional 401k's or deductible traditional IRAs as one way to reduce taxable income or have your employers withhold additional amounts per pay period.
Posted on 3/24/14 at 4:31 pm to CE Tiger
Ahh, the marriage penalty.
The MFJ withholding tables assume one spouse makes all the money. When both spouses make money, the tables don't work as well. Why? Because the tables only look at what you make, not what your spouse makes. And remember, the more money each of you make, the higher rate you'll pay together on each additional dollar of income.
Think of it this way. Each of you make 50K. Each of you withhold as MFJ. MFJ tables think each of you, as a couple, only make 50K. However, you make 100K. And both of you withhold MFJ. So the MFJ tables are going to withhold whatever the tax rate is at 50K, times 2. However, due to marginal tax rates, the tax on 100K is more than the tax on 50K times two.
Lesson learned, hopefully you got the cash to pay it. Switch back to single withholding, or, ask your employer to withhold extra. If you are the only one of your friends dealing with that, congrats, you make more money as a married couple with no kids than the rest of them in that situation do.
The MFJ withholding tables assume one spouse makes all the money. When both spouses make money, the tables don't work as well. Why? Because the tables only look at what you make, not what your spouse makes. And remember, the more money each of you make, the higher rate you'll pay together on each additional dollar of income.
Think of it this way. Each of you make 50K. Each of you withhold as MFJ. MFJ tables think each of you, as a couple, only make 50K. However, you make 100K. And both of you withhold MFJ. So the MFJ tables are going to withhold whatever the tax rate is at 50K, times 2. However, due to marginal tax rates, the tax on 100K is more than the tax on 50K times two.
Lesson learned, hopefully you got the cash to pay it. Switch back to single withholding, or, ask your employer to withhold extra. If you are the only one of your friends dealing with that, congrats, you make more money as a married couple with no kids than the rest of them in that situation do.
Posted on 3/24/14 at 4:39 pm to NYNolaguy1
Your situation is not that uncommon. Your combined incomes place you squarely in the 25% tax bracket. Your separate incomes are still in the 15% tax bracket. Thus, you have income taxed at 25%, but you are still withholding at 15%.
Posted on 3/24/14 at 4:45 pm to LSUFanHouston
quote:
Poodlebrain
&
quote:
LSUFanHouston
Thank you for the simplified explanation. We can come up with the money through some creative financing, but it won't be pleasant. I had read that failure to pay penalty was like 0.5% of whatever you owe per month, which wouldn't be terrible, but I'd rather not go there. I'll have to let my employer know that I am single again.
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