Help me with my taxes

If you got married last may, you’ll file married going forward and claim zero deductions, not one.

If you still need to withhold more, you can manually withhold “X” amount out of every normal payroll processing. The above should help you a lot, but if you think you’re still short, just add some additional withholding.

I know I’m going to owe every year so I just try to keep a rough estimate of what it’s going to be so I’m not surprised. A simple gross income - standard deduction for AGI input into tax tables will get you relatively close to your tax calculation and then just look at what has been withheld YTD to see where you stand

A shortfall or surplus in taxes shouldn’t be your primary concern.

Concern 1 is how to pay as little in taxes today and in the future as possible - that may sound like it contradicts my first statement, but it does not. You need to focus on your total tax liability (Line 24 on Form 1040) rather than how much you pay or get back each year in April (Line 34 or 37). I can get you a $15,000 refund if you’d like, but it will require you paying $15,000 more in tax withholding throughout the year and then getting your own money back in April. See the why that’s useless?

Concern 2 is how to make sure you don’t pay any penalties when you file. Easiest way to do that is to pay 110% of your previous year liability. For example, I “owed” $30,000 for 2023, but that was just because I didn’t withhold enough during the year. Had I withheld more during the year I would have had $30,000 less in my checking account. Withholding more or less didn’t chance my total liability as long as I withheld at least 110% of my previous year’s liability (line 24 of Form 1040). I did not owe any underpayment penalty.

As for concern 1, depending on your situation you should try to max out 401k and traditional/Roth IRAs, and once you’re doing that you can focus on more tax efficient non-retirement (non-qualified) investing.

For concern 2, make quarterly payments to adjust for the bonuses as they’re earned.

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gets a large amount back due to the 401k having to balance out company wide

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Wait, what? Please add more detail to this statement.

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After doing the math, the bonus's we get are not taxed correctly so this caused the shortfall in my taxes. I am filing as single (got married last may) and 1.

I asked chat gpt how I can make it to where I dont get taxed and it gave me a few different options. One was to take out 250 to 300 a check. The other was to max out my 401k to lower my taxable income. The option of requesting to have the bonus checks taxed hire is not available unfortunately.

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Bonuses are required to have a 22% withholding rate. Are you saying they withheld less than 22%? Either way, your payroll department should be able to change the withholding amount for you.

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tigerbait17

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Are you eligible to have an HSA ?

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Wait, what? Please add more detail to this statement.

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Non safe-harbor 401ks have to pass nondiscrimination testing to confirm plans do not disproportionately benefit highly-compensated employees. In the simplest terms that even Mingo can understand, rank and file employees must participate in the 401k at a satisfactory level with respect to both headcount and the amount of money contributed.

The coverage/headcount test is rarely a problem. Plans will the deferral/contribution test which usually results in “refunds” back to HCEs.

Plans that fail are still typically worthwhile for the match and tax deferral.

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I’d at least contribute enough to get the 401k match.

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Our 401k doesnt have a match with the company. Should have added this in the initial message

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OP is all over the place (filing single or does he mean withholding/claiming, unclear if his objective is pay less taxes or just to owe less at filing, doesnt fully understand his 401k etc...) I thought Slackster did well trying to address OP without asking for/waiting for needed clarification.

So what is it OP, trying to lower tax burden, avoid penalties for under withholding, or trying to dial it in to owe nothing at filing? What's your current tax bracket and future expectations? Traditional 401k/IRA may lower taxable income now but if you arent in a high bracket could be foolish move versus Roth.

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Fair point, I did leave out my whole goal. I would like to lower my tax burden overall. I feel like I will always have to pay but dont want to unexpectedly have to pay 7k again. I am just looking for the smartest way to do this.

I think OP is referring to 401k contribution limits for Highly Compensated Employees (HCE). If other employees dont participate at a high enough rate company may have to increase employer contribution or send back HCE contributions to get below limits. The intent is so HCEs dont over benefit from a plan without making it readily available or well known for typical employees. OP is likely either an HCE or erroneously thinks this also applies to him. If it is a bad plan, as OP states, the HCE administrator/management
types should be pushing for better for their subordinates' sake and themselves (thus the HCE rules.)

This is correct. We have over 2500 employees company wide. So an administrator contributing 15% or so will be significantly more than a housekeeper contributing 15% or more. It might be worth it for me but ever person who does it that I talk to get a refund check in the mail for a significant amount of money. They then have to figure out what to do with that.