This does not make any sense.They arent taking out the right %.
The only way you should owe anything at the end of the year if you claim no deductions and then AFTER you claim deductions still owe is if they arent taking the right % out of your checks to begin with.Well not the "only way" the other way is if you had any other additional sources of income that had zero withholding taken out such as profit on the sale of a stock or a home(2nd home that is) alimony ..child support ..etc...
Or in our case since our taxes are estimated for the current year are based on last years income if we make more than the year pervious or if we have less deductions etc..
Do you have an accountant.Because what you are saying doesnt make any sense.Unless they arent taking enough out.No one who gets paid hourly or on salary by the way has any "deductions" counted off their paychecks(except counting your self as a depentent or not).Its all based on your income and then you write stuff off when it comes to filing .And if after that you owe a signficant % of your income more than what you have paid then they arent witholding enough throughout the year.
But either way it would equal the same amount Kathryn.Its not "extra" after you have paid in the propper amount.You can not convince me that thoughtout the year they are witholding the right % based on yoru earnings and then charging you more on top of that.That doesnt make any sense .If that is true you need to hire an expert to figure it out.
Love
Dallas
Dallas, maybe we're saying the same thing but approaching it from different directions.
What I am saying is that even though I claim zero deductions on my W-4 with my employer - AND have them withhold some extra per pay period (though apparently not enough, damn it) we still owe money at the end of each year. You're right - whether they withhold at the zero deduction rate PLUS some or just at the zero deduction rate - it's gotta be paid.
I know I have to pay my taxes. The point I am trying to make is that I am not sure if many people really KNOW just how much in taxes the middle class has to pay - the class of people that Obama promises not to raise taxes on.
You may know this already but:
When you go to work someplace, you have to fill out a mandated form called a W-4. On this form you list the number of exemptions you want to claim, so that your employer can figure out the percentage of federal tax to take out of your check. Many people on that form claim the number of exemptions they are going to claim on their 1040 form at the end of the year when figuring taxes. Not everyone does though. In our case, we claim zero exemptions.
The more exemptions you claim, the less tax is withheld - because the figure is that you are going to claim those same exemptions on your tax return at the end of the year. Many people prefer to use their own money during the year and hope to break even at the end of the year - and in many cases, come out ahead.
On our W-4s my husband and I claim ZERO exemptions. In other words, we don't even claim OURSELVES as an exemption. That way, our employer sends the IRS the maximum amount of taxes throughout the year. Often we resubmit this form to have the IRS hold out even MORE of our paycheck each pay period, to offset the amount of tax we are STILL going to owe, IN SPITE OF CLAIMING ZERO DEDUCTIONS all year. (In fact, this year I just resubmitted my W-4 to my employer asking for them to withhold more money than required out of each paycheck for taxes.)
If you go to
www.irs.gov and search W-4 worksheet, you will find a worksheet that will help you figure out how much MORE money you need to have withheld, even with zero exemptions claimed, based on your income. This is optional of course. But what does it matter? Pay more now or pay more in April - the bottom line is that even with claiming zero deductions and paying the maximum rate, if you fall in a certain combined income bracket, you'll pay a much higher tax rate than other people.
According to this worksheet - in addition to the amount of taxes that we pay each pay period at the zero deduction level, in order to break even at the end of the tax year (forget about ever getting a REFUND), we would have to send in about $1000 more PER PAY PERIOD. Yes, folks - that's over $2000 more PER MONTH. IN ADDITION to the federal tax that we're already having deducted at zero exemptions level.
Our COMBINED incomes put us in a higher tax bracket with a higher tax RATE. So in other words, not only are we paying MORE taxes than most Americans, we are also paying a higher PERCENTAGE of our earnings in taxes.
The unpleasant (or pleasant - depends on whether it's income tax time or not!) fact is that we fall into an income bracket where we are required to pay the US government tens of thousands of dollars each year - even though we claim zero exemptions all year long.
Someone has to pay ADDITIONAL taxes and not get a "refund." And someone has to make up for all the "refund" checks the government sends out every year. Contrary to the media spin, it's not just the millionaires who have to send in checks every April (or quarterly) - it's middle aged middle class people as well.
I've hired accountants for many years. I checked behind them and usually found even more deductions than they gave us credit for, so for the past couple of years I haven't hired an accountant. But when I did - guess what - we still sent in money every April.
Just to clarify - we don't have any income that hasn't already had taxes taken out of it.
And like I've stated again and again - I am not opposed to paying taxes to live in the United States of America. I AM opposed to calling a redistribution of wealth a tax REFUND - when the recipient didn't even pay in the amount of the refund check!
I also think it's good for people to realize how much of their year they spend paying taxes before they actually begin working for themselves. IN my case, my husband and I work for the federal government till sometime in April of every year. Or you could put it another way - my husband works for us all year, and my entire paycheck (yes, the equivalent of my entire annual salary as a full time banker!) goes only to paying our taxes.
If I really thought about it, I could get very depressed! Sheeze, even I never realized that till just this minute.
Just to let you know - we considered the option of me not working at all, but my husband has a very good job. Even if I quit working to lower our tax bracket, he would still pay over $20,000 a year in taxes.
We are however, working on a plan to do this. We have to sell our place and downsize though - and my car is nearly paid off, and our house is on the market. Hope it sells.
Hope that clarifies things.
