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Anyone else getting slammed with a huge tax payment this year?!
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Anonymous
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I just don't understand why this is happening.
In the past we always got back a small refund, though last year we owed about $1000.00. Even though we increased our withholding, this year we owe over $4000 on our federal tax! 
Has this happened to anyone else? And I'm wondering if part of the problem is that our health insurance premium deductions were paid with pre-tax dollars, so we couldn't list them as a deduction this year. 
Please let me know if you have experienced a similar situation! |
Anonymous
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Not here. As for the pre-tax health care it should have worked to your benefit.
A lot of people are surprised the first time they owe taxes on a return, but withholding is not an automatic guarantee that you won't owe at the end, especially if you have income from sources other than your job. The only way to answer your question is to line up your tax returns and see what changed. Usually someone's income is higher and they forgot to account for it (especially interest/dividends) or they didn't have as many deductions as in prior years. It could be a tax change but you would probably know. Lastly, if all your income and deductions are the same as last year and your withholding truly is higher, then it is possible you made a mistake entering data either on this year's return or last year's. You can't just blindly accept and sign the tax return as the software calculates it. You have to be able to read it and make sure it makes sense to you. |
Anonymous
| Did you get hit with the AMT? That's what killed us. |
Anonymous
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no actually we got a huge refund this year. we have a lot of mutual funds so the capital gains reported varies greatly from year to year which makes it hard to predict how much to withhold. Drives me crazy which is why i'm switching to ETFs over time.
Did you do your taxes yourself? did you get hit with AMT this year? We pay over $7000 in AMT taxes (typically every year). If you didn't do them yourselves you should ask your tax preparer. If you used turbotax every year, it should show a comparison from last year to this year which is very helpful. Also look at your total withholding vs total tax. I suspect there is an error somewhere so please get to the bottom of why the big jump before sending it in. |
Anonymous
| Another question: have you finished your taxes, or are you currently in the middle of working through Turbo Tax? When I did mine (through Turbo tax), it showed that I owed X amount of taxes almost until the end, when I put in my deductions, then it "righted" itself. Up until that point, I had thought that my pre-tax dollars for childcare had somehow made me owe; in the end, TT accounted for it and my tax requirement was reduced. |
Anonymous
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OP here,
Thanks for the responses. Doing taxes in a hurry this year for multiple reasons. It appears we are getting hit because of the changes in the withholding tables due to the new Making Work Pay Credit. It boosted our take-home pay, but now we are taking a huge hit. Apparently we should have increased our withholding further to counteract the actions of the government! Aargh!
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Anonymous
| Yes, we got an 8k tax bill for Fed. Our tax guy said that with the upcomming changes that are sure to happen for us to expect, if we get raises, to only count on 50% of that hitting our pockets...but heck, I hear that "the rich" don't pay their fair share....maybe us forking over 70% of our income will placate the masses. |
Anonymous
50%? We made just over $250K and paid roughly 20% in taxes. Then again, who knows how much we would pay if we made more. |
Anonymous
| yes 50% on the marginal income. Top tax rates are going up to 39% and when you add medicare and state taxes and the effect of the AMT and PEP and Pease that adds up to close to 50%. That's before the additional health care tax. |
Anonymous
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Making Work Pay can't matter more than $800. That's the maximum change to the withholding tables.
8:19 - TurboTax can't know about things like deductions and credits until you type it in. It's always nice to see your "taxes owed before credits" - kinda helps you understand what policies you will benefit from. Try saving right before your mortgage interest info is entered, and then right after - you will see what that beni is worth to you. |
Anonymous
| I suspect the OP is making this up and just has an agenda. We make over 300K and have not seen an increase in our federal taxes. The tax on higher end health care plans would not go into effect until 2014. |
Anonymous
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OP here, and I had to laugh because I seriously have no agenda!
I am just a procrastinator doing her taxes at the last minute and freaking out! And actually, I owe it to one of the PPs who recommended I go back and double check everything. When I did that, I was able to reduce my tax by about $1000. So thanks to everyone who replied, and I think it's hysterical that anyone could think that poor mild mannered last minute me could have any agenda other than getting this mailed off today! |
Anonymous
| OP - last minute? last minute? I will be filing an extension on the 14th. |
Anonymous
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The tax on healthcare is planned to start next year and the benefits not until 2014
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Anonymous
| Nope -received a nice healthy refund, in part due to the tax credits for "green" renovations. |