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re: General Income Tax Question
Posted on 9/24/24 at 8:18 am to Hammond Tiger Fan
Posted on 9/24/24 at 8:18 am to Hammond Tiger Fan
It will also throw you off if you have other income, such as interest, mineral royalties, dividends, etc. that are paid without withholding any taxes. You'll need to jack up payroll withholding to account for the taxes ultimately due on those payments.
0
Posted on 9/24/24 at 10:41 am to Clint Torres
Why?
Posted on 9/24/24 at 10:45 am to Hammond Tiger Fan
I had the same thing happen after our first kid. Claimed a 1 for the kid, then the wife made more than expected and my company withheld not near enough. Ended up owing 7k. I'll probably have over compensated this year. We'll see.
Taxes are a crapshoot every year
my goal is to avoid giving the govt a short term loan.
Taxes are a crapshoot every year
my goal is to avoid giving the govt a short term loan. Posted on 9/24/24 at 12:01 pm to Hammond Tiger Fan
The withholding calculation is old fashioned. It assumes if you file MFJ, that only one spouse works.
The new W-4 has tried to fix that, but like most things the IRS does, it just makes it worse.
This is one of MANY reasons why we need to get rid of married filing statuses and just have everyone file individiually. What your spouse earns should have ZERO impact on the tax you pay, but it does.
This was a fine system when 95% of women were stay at home moms, but it no longer works for most people.
If a single person has one source of income, the system works extremely well. But when you add in multiple sources of income (either from one person or two people) AND each individual payer only has the limited information, it doesn't take long to get off the rails.
Consider using the W-4 tool on the IRS website. For a government website, it's actually fairly helpful.
LINK
The new W-4 has tried to fix that, but like most things the IRS does, it just makes it worse.
This is one of MANY reasons why we need to get rid of married filing statuses and just have everyone file individiually. What your spouse earns should have ZERO impact on the tax you pay, but it does.
This was a fine system when 95% of women were stay at home moms, but it no longer works for most people.
quote:
Based solely on theory, one would think the government would take out the correct amount of taxes and we wouldn't how anything (or very little). What's the point of making a selection on your W4 form if the right amount of taxes aren't deducted? I understand that when you file at the end of the year some people will eventually itemize deductions to reduce their tax burden. However it seems like if you follow at minimum the recommended standard published by the IRS regarding your withholdings, you should at least be close to the taxes that are due. I just don't get how I was $10,000 in the hole last year.
If a single person has one source of income, the system works extremely well. But when you add in multiple sources of income (either from one person or two people) AND each individual payer only has the limited information, it doesn't take long to get off the rails.
Consider using the W-4 tool on the IRS website. For a government website, it's actually fairly helpful.
LINK
Posted on 9/24/24 at 4:02 pm to LSUSUPERSTAR
quote:
Because it's a scam to try and get people to underpay throughout the year so they can add penalties.
And what do you suppose over-withholding to get an end-of-year refund is?
Posted on 9/24/24 at 9:32 pm to NC_Tigah
Lately all my W4 are electronic with no instructions
Posted on 9/24/24 at 9:56 pm to Weagle25
quote:
quote:I tried to call the IRS directly to get and explanation, but since it's not tax season, the wait time was over 1.5 hours
You said this like 1.5 hours is a long wait time because it’s not tax season. That is the shortest wait time I’ve heard in years. I’m surprised you even got put on a wait list. When it gets over 4 hours they just answer and say “we’re too busy. Try calling another time” and hang up on you.
My favorite part of the comment is that it’s September 24th.
Posted on 9/27/24 at 3:29 pm to Weagle25
Don’t be a dumbass. Yes you most certainly have to report all household income on your W4s if you want the withholdings to be as accurate as possible.
I own two CPA firms and process over 1,000 tax returns each year.
I’m trying to help the OP. Don’t be a smug fricking a-hole. I guess that’s typical for a sleazy Auburn fan.
I own two CPA firms and process over 1,000 tax returns each year.
I’m trying to help the OP. Don’t be a smug fricking a-hole. I guess that’s typical for a sleazy Auburn fan.
This post was edited on 9/27/24 at 5:59 pm
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