If you make 300K or more do you always end up writing 15-20k+ check to the IRS?

[Anonymous]

Is this just the way it is?

We have our exemptions down to 2 and still end up writing a large check at the end of the year.

[Anonymous]

Um, no. Clearly you're not withholding enough!

[Anonymous]

You can make additional payments beyond the automatic formulas. Do you have no mortage, no children and no tax deductible donations?

[Anonymous]

When we were at 280k, we ended up owing $7k, which resulted in an underwithholding penalty. So after adjusting our withholding for this year, we're hoping we don't own anything else.

[Anonymous]

No, of course not. We lowered our exemptions to zero and have extra withheld. It's called planning.

[Anonymous]

It's that "extra withholding" that tripped us up a few years ago with a $230k HHI. Never had quite had it explained before then that standard exemptions (even down to zero) might not be good enough. Kind of like where you are now.

[Anonymous]

I thought exemption was 1 per person, we are family of 4 and have about 30k mortgage interest deduction + 12k in real estate taxes.

[Anonymous]

We had about $75,000 in MID so that helped.

[Anonymous]

The IRS has an easy to use withholding calculator that will tell you how to set your exemptions so you come out owing close to $0.

[Anonymous]

Anonymous wrote:No, of course not. We lowered our exemptions to zero and have extra withheld. It's called planning.

Same here: no exemptions and extra withholding each month. It's painful to do this but we don't end up owing money at the end of the year. We recalculate every year based on what we think our income will be and then check again in the fall to make sure that nothing has changed.

If you owe 15-20k+ aren't you getting hit by penalties for under-withholding?

[Anonymous]

Anonymous wrote:I thought exemption was 1 per person, we are family of 4 and have about 30k mortgage interest deduction + 12k in real estate taxes.

It is not straightforward if you are a two-earner family with high incomes. It is straightforward if you are a one earner family. And, if you fall into AMT category then you deduction for real estate taxes (and state taxes) goes away.

If you are making $300,000 a year and you can't figure out your withholding on your own, why don't you make an appointment and spend an hour with an accountant who can help you?

[Anonymous]

Zero exemptions and extra several hundred dollars per paycheck.

[Anonymous]

Anonymous wrote:I thought exemption was 1 per person, we are family of 4 and have about 30k mortgage interest deduction + 12k in real estate taxes.

But clearly this isn't working, so try harder.

[Anonymous]

Yeh I will have to adjust this can't believe that with fecal and state taxes close to half is going to taxes. I guess that's the problem with barely making over the rich line in pure income. I guess we are rich but it sure doesn't feel like it.

[Anonymous]

Anonymous wrote:Yeh I will have to adjust this can't believe that with fecal and state taxes close to half is going to taxes. I guess that's the problem with barely making over the rich line in pure income. I guess we are rich but it sure doesn't feel like it.

Best typo ever.