The government wants more money from me!!—Tax question??

[CityGal]

While filing my income tax with Turbo Tax, they said I may owe NYS taxes. How can this be?! My roommate and I make nearly the same amount (give or take a thousand) and she doesn’t have to pay anything. I’ve been filing for years now and I have never owed them money. My W-4 claim has always been 0, so, how can I owe them money now???? Thinking about filling out the paper form to make sure but I did it with Turbo Tax twice now and it still comes up the same number. Also, it says I am owed a huge number for a federal refund which doesn’t seem likely since I never deduct anything. Is this a common thing with Turbo Tax or should I just use someone else?

[SpaceMonkey]

I would try another online service just to see if it gives you the same results. You usually don't have to pay anything unless you actually e-file.

[MetFanL]

I would try another service, but I've totally gotten a federal refund before and ended up owing the State some money. This usually happened when I had a 2nd, part-time job and they underwithheld for my total salary b/c they based it on what I made with them, not on my total annual earnings.

[analogman]

Generally speaking if you claim 0 exemptions and only have one job with no investments, you should not owe money.

You say you are getting a federal refund, this seems normal (since you are allowed 1 exemption but you claimed 0, so you've been overpaying taxes). Did your employer not withhold any NY state taxes (doesn't seem likely since they withheld federal taxes). Do you work in a different state than the one you live in? Something doesn't sound right but I don't think it's TurboTax.

[nikorock28]

I don't think it has anything to do with TurboTax. It is very much possible that you are due a large refund and have to pay state taxes. Your roomie may make the same as you, but there are many other factors. Pre-tax retirement contributions, school loan interest, SS contributions (not all employees pay into SS), interest accounts, all other investments, etc. are all taken into account. Surely, your roomie and yourself are not the same on every basis. Also, there are two separate forms: the W-4 is strictly for federal withholding and there is another form in which you elect the percentage withholding for state. Apparently, you did not withhold enough for the state and now owe.

[capella]

Generally speaking if you claim 0 exemptions and only have one job with no investments, you should not owe money.

Really? Because I claim 0 and my husband claims 0 (plus he has another 30 a check withheld) and we still owe 230 bucks this year??? It must be a married no kids thing because I don't get it.

OP, I would try another source or muddle through it yourself.

[lostindc]

If you claim 0 exemptions on your federal W-4 it has nothing to do with your state withholdings. In fact the number of federal exemptions do not have to match the number of state exemptions declared on your w4. Therefore it is very possible that you get a large refund from the federal gov't (because of the zero exemptions) but owe money to state if you have make even a couple hundred dollars in interest or dividends which are often not subject to withholding.

Disclaimer: I am not a tax professional and this post should not be construed to contain any valid legal or tax advice. Individual circumstances may vary. See a tax professional immediately if any of the following should occur as it may be a sign of a more serious condition and should not be left untreated. Common side effects include headaches, upset stomach, or fatigue. If you experience insomnia (a condition of sleeplessness lasting more than 4 hours) - seek attention immediately (even if it is from TV infomercials). If you can't afford your tax advice someone else might be able to help. Talk to your Big Box Store associate about Tax Software.

[dacrunkest]

I am going to start having to file two state returns soon (I live in Missouri and work in Kansas). That is going to be as fun as a root canal.

*disclaimer: I have never actually had a root canal, so my comparison is somewhat meaningless to me. But it sounds painful.

[SpaceMonkey]

I am going to start having to file two state returns soon (I live in Missouri and work in Kansas). That is going to be as fun as a root canal.

Mwahaha. I have to file in three states this year!

[wordsmith]

I am going to start having to file two state returns soon (I live in Missouri and work in Kansas). That is going to be as fun as a root canal.

*disclaimer: I have never actually had a root canal, so my comparison is somewhat meaningless to me. But it sounds painful.

A root canal isn't that bad. Wisdom teeth extraction, on the other hand....ugh. And both pale in comparison to the agony of paying for either out of pocket. :rolleyes:

[dacrunkest]

Mwahaha. I have to file in three states this year!

lemme guess: DC, Maryland, Virginia?

[SpaceMonkey]

lemme guess: DC, Maryland, Virginia?

Not even that logical. DC, New York, and Oklahoma.

[capella]

If you claim 0 exemptions on your federal W-4 it has nothing to do with your state withholdings. In fact the number of federal exemptions do not have to match the number of state exemptions declared on your w4. Therefore it is very possible that you get a large refund from the federal gov't (because of the zero exemptions) but owe money to state if you have make even a couple hundred dollars in interest or dividends which are often not subject to withholding.

Disclaimer: I am not a tax professional and this post should not be construed to contain any valid legal or tax advice. Individual circumstances may vary. See a tax professional immediately if any of the following should occur as it may be a sign of a more serious condition and should not be left untreated. Common side effects include headaches, upset stomach, or fatigue. If you experience insomnia (a condition of sleeplessness lasting more than 4 hours) - seek attention immediately (even if it is from TV infomercials). If you can't afford your tax advice someone else might be able to help. Talk to your Big Box Store associate about Tax Software.
Yeah, but I don't even have state income taxes to worry about. Something just isn't adding up here. I don't understand why we owe... again! We need a kid or something. :evil: I'm talking federal returns. And 18K of mortgage interest. What the hell?? I'm taking every deduction I can find and still we owe!

[nikorock28]

Yeah, but I don't even have state income taxes to worry about. Something just isn't adding up here. I don't understand why we owe... again! We need a kid or something. :evil: I'm talking federal returns. And 18K of mortgage interest. What the hell?? I'm taking every deduction I can find and still we owe!

Be sure to deduct 2 personal exemptions (one for you and one for your husband). I'm sure you are already doing this though =)

[slimjim]

Yeah, but I don't even have state income taxes to worry about. Something just isn't adding up here. I don't understand why we owe... again! We need a kid or something. :evil: I'm talking federal returns. And 18K of mortgage interest. What the hell?? I'm taking every deduction I can find and still we owe!

If you don't mind revealing, what was your AGI, how much in deductions are you taking and what was your calculated Taxable income???

[CityGal]

Thank you all for your help. My boss and I figured it out. Apparently my job never witheld NYC taxes from my 2006 (and even 2007) paychecks. The system that does payroll didn't register my response to the county I entered--NY county. It only recognizes Manhattan. So instead of paying federal and state tax, I also have to pay city taxes. Seems like a lot of taxes!

[capella]

If you don't mind revealing, what was your AGI, how much in deductions are you taking and what was your calculated Taxable income???
I don't really mind. But sorry in advance for the threadjacking.

AGI- $66,958 (after $1183 in straight deductions... teacher expenses deduction and student loan interest)

2 exemptions claimed (one for me and one for the spouse)

$23,640 in deductions (mortgage interest, property taxes, state sales tax deduction since we don't have state income taxes, donations, misc. job expenses [union dues])

Which leaves $43,318 in taxable income and owing $5,744 but we only had $5,514 withheld last year with 0 exemptions claimed on our W-4. Argh!!!

[redav]

AGI- $66,958 (after $1183 in straight deductions... teacher expenses deduction and student loan interest)

2 exemptions claimed (one for me and one for the spouse)

$23,640 in deductions (mortgage interest, property taxes, state sales tax deduction since we don't have state income taxes, donations, misc. job expenses [union dues])

Which leaves $43,318 in taxable income and owing $5,744 but we only had $5,514 withheld last year with 0 exemptions claimed on our W-4. Argh!!!
Maybe I'm missing something you have already included, but if you have $18k in mort int + 2x $3300 for exemptions right away takes you to under $43k taxable income, and that is ignoring any other deductions, like sales tax.
(I guess the ~$18k mort int is actually all your itemized deductions, then add exemptions to get to ~$24km, right?)


The IRS has a withholding calc online that will help you figure out if you're withholding the correct amount:
http://www.irs.gov/individuals/article/0,,id=96196,00.html
Here is another one:
http://www.pensoft.com/taxcalc.asp

I don't know why they would be withholding too little if you listed zeros on your W-4.

[nikorock28]

I don't really mind. But sorry in advance for the threadjacking.

AGI- $66,958 (after $1183 in straight deductions... teacher expenses deduction and student loan interest)

2 exemptions claimed (one for me and one for the spouse)

$23,640 in deductions (mortgage interest, property taxes, state sales tax deduction since we don't have state income taxes, donations, misc. job expenses [union dues])

Which leaves $43,318 in taxable income and owing $5,744 but we only had $5,514 withheld last year with 0 exemptions claimed on our W-4. Argh!!!

It is not possible for your deductions to equal $23,640 because you have $18,000 in mortgage interest plus $6600 in personal exemptions, which is obviously greater than the amount stated. Did you deduct your personal exemptions to achieve the AGI you stated? An AGI doesn't include itemizable deductions.

[EmberMae]

It is not possible for your deductions to equal $23,640 because you have $18,000 in mortgage interest plus $6600 in personal exemptions, which is obviously greater than the amount stated. Did you deduct your personal exemptions to achieve the AGI you stated? An AGI doesn't include itemizable deductions.
I'm guessing she just rounded up, the $18k figure was the total amount of itemized deductions, rounded up, plus $6600 for personal exemptions brings it to about 24k in deductions. For the life of me I can't figure out why you're not getting enough withheld, most places I've worked tend to be overzealous about withholding. Not only that but your tax is lower b/c you're itemizing, you would have had several thousand dollars more taxable income if you'd taken the standard deduction. We are getting a huge refund this year, although part of that is because niether one of us worked fulltime throughout the year, but our taxes were taken out as if we were. I guess we'll see what next year brings, as we'll be filing as married for the first time and will both *hopefully* have worked fulltime all year.

[capella]

Nope, those figures are correct.

We made 67,562 and had 579 in taxable interest= 68,141

We had 500 in educator expenses as a MSA deduction (E), and 683 in student loan interest. Leaving 66,958 for AGI.

We had 23,640 in itemized deductions (state sales tax-1,741 [sales tax table was 746 and then we bought the car which had 900 in sales tax], 1,957 in property taxes, 18,974 in mortgage interest, 230 in donations, job expenses (union dues and some other materials necessary for work) 2077 of which we could deduct 738.00 because of the 2% rule, which totals 23,640 in itemized deductions.

Subtract and we have 43318 in taxable income, which is 5,744 in taxes. We had 5,514 withheld (I have no idea why it's so low!!!), and we owe 230 bucks. :mad:

I sincerely hope I did mess something up, but I've been over it again and again and again and the numbers stay the same. :rolleyes: Stupid taxes.

[capella]

WAIT!!! I didn't add the personal exemptions in on line 42!!!!!!! Lemme see about that! That should help right??

[redav]

Yes, it will help a lot. Without looking up the tables, if you are in the 15% bracket, that $6600 will save you $990.

Edit: I checked the tables, & it looks like your tax bill should be $4754 :)

[capella]

Sweet holy moly! Thank you Nikorock!! I missed the personal exemptions, which brings our taxable income down to 36,718 and owing 4754 in taxes. That means we get back 760 bucks!!! Happy damn Valentine's Day to me!!! :D :D :D

[slimjim]

Sweet holy moly! Thank you Nikorock!! I missed the personal exemptions, which brings our taxable income down to 36,718 and owing 4754 in taxes. That means we get back 760 bucks!!! Happy damn Valentine's Day to me!!! :D :D :D

Moral of the story: USE Turbo Tax!!!!!

[capella]

Nah. I think I just need to read every line. I used H&R Block one year and ended up paying for them to tell me what I had already figured out. I do my own taxes. :)

[nikorock28]

Sweet holy moly! Thank you Nikorock!! I missed the personal exemptions, which brings our taxable income down to 36,718 and owing 4754 in taxes. That means we get back 760 bucks!!! Happy damn Valentine's Day to me!!! :D :D :D

Thank redav too =) I am glad you figured it out :)

[capella]

Ah, yes. Thanks redav. :D