Huge (for us) tax bill. What went wrong?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Are you making that income for the first time? Is it the first time you owe so much in taxes? How come you didn’t realize that your take home per pay period had increased by that much?
25k is an insane amount to owe at that income.

No, same amount last year and we owed $6k. So we adjust up and now here we are with $26k.

No investments minus 401(k).

And you didn't notice that your take home paycheck was substantially higher than last year? The blame is entirely on you.
I would understand if the difference was lower, $2k or $3k. But $25k??? There is no way you missed that on your paycheck.

So my take home wasn’t higher, in fact it was a little lower. My take home is approximately $4800/ pay period. After 401(k)/FSA/ etc my gross income was $170k.

Assuming your AGI before the standard deduction is 170k and DH is 40k (though likely lower), that puts your AGI at 185k after taking the standard deduction. For married filing jointly, your total tax owed for $185K would be $32070.

There's no way you could owe $25k, as that would mean you only had $7k in taxes withheld during the year.

OP could have significant interest income, which would be taxed at ordinary rates. It's not out of the realm of possibility with interest rates pushing 5%.

There's a lot of hypothetical out there. But then we'd be assuming that OP forgot to disclose a shit ton of income in her original post.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Are you making that income for the first time? Is it the first time you owe so much in taxes? How come you didn’t realize that your take home per pay period had increased by that much?
25k is an insane amount to owe at that income.

No, same amount last year and we owed $6k. So we adjust up and now here we are with $26k.

No investments minus 401(k).

And you didn't notice that your take home paycheck was substantially higher than last year? The blame is entirely on you.
I would understand if the difference was lower, $2k or $3k. But $25k??? There is no way you missed that on your paycheck.

So my take home wasn’t higher, in fact it was a little lower. My take home is approximately $4800/ pay period. After 401(k)/FSA/ etc my gross income was $170k.

If you didn’t change your income significantly or your tax withholding significantly something is being calculated wrong. How much was withheld from your paycheck compared to last year you can look at this year and last years W2 to compare.

On a per paycheck basis, 4800 net (assuming you are paid 24 times per year?) your gross pay from 190k should be 7916, minus your 401k/fsa you should have around 6850 taxable. So you’re paying about 2850 in other deductions (healthcare, dental, etc…) and taxes. How much federal tax is withheld from that?

I don’t think anyone is paid 24 times per year, are they? It’s either 12 or 26.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Are you making that income for the first time? Is it the first time you owe so much in taxes? How come you didn’t realize that your take home per pay period had increased by that much?
25k is an insane amount to owe at that income.

No, same amount last year and we owed $6k. So we adjust up and now here we are with $26k.

No investments minus 401(k).

And you didn't notice that your take home paycheck was substantially higher than last year? The blame is entirely on you.
I would understand if the difference was lower, $2k or $3k. But $25k??? There is no way you missed that on your paycheck.

So my take home wasn’t higher, in fact it was a little lower. My take home is approximately $4800/ pay period. After 401(k)/FSA/ etc my gross income was $170k.

If you didn’t change your income significantly or your tax withholding significantly something is being calculated wrong. How much was withheld from your paycheck compared to last year you can look at this year and last years W2 to compare.

On a per paycheck basis, 4800 net (assuming you are paid 24 times per year?) your gross pay from 190k should be 7916, minus your 401k/fsa you should have around 6850 taxable. So you’re paying about 2850 in other deductions (healthcare, dental, etc…) and taxes. How much federal tax is withheld from that?

I don’t think anyone is paid 24 times per year, are they? It’s either 12 or 26.

Military is. Pay dates are the 1st and 15th of each month.

[Anonymous]

Good thing the IRS is hiring 80,000 agents, they'll be able to answer those phones and hold your hand while you digest your new tax bills. I love big government!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Are you making that income for the first time? Is it the first time you owe so much in taxes? How come you didn’t realize that your take home per pay period had increased by that much?
25k is an insane amount to owe at that income.

No, same amount last year and we owed $6k. So we adjust up and now here we are with $26k.

No investments minus 401(k).

And you didn't notice that your take home paycheck was substantially higher than last year? The blame is entirely on you.
I would understand if the difference was lower, $2k or $3k. But $25k??? There is no way you missed that on your paycheck.

So my take home wasn’t higher, in fact it was a little lower. My take home is approximately $4800/ pay period. After 401(k)/FSA/ etc my gross income was $170k.

If you didn’t change your income significantly or your tax withholding significantly something is being calculated wrong. How much was withheld from your paycheck compared to last year you can look at this year and last years W2 to compare.

On a per paycheck basis, 4800 net (assuming you are paid 24 times per year?) your gross pay from 190k should be 7916, minus your 401k/fsa you should have around 6850 taxable. So you’re paying about 2850 in other deductions (healthcare, dental, etc…) and taxes. How much federal tax is withheld from that?

I don’t think anyone is paid 24 times per year, are they? It’s either 12 or 26.

Plenty of people are paid bimonthly. Maybe you should stay away from financial advice forums if you don't know this?!

[Anonymous]

Anonymous wrote:Good thing the IRS is hiring 80,000 agents, they'll be able to answer those phones and hold your hand while you digest your new tax bills. I love big government!

Hopefully they can do something other than explain how to work around the messed up withholding system that the Trump admin created to replace a system that worked perfectly well for many decades.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Are you making that income for the first time? Is it the first time you owe so much in taxes? How come you didn’t realize that your take home per pay period had increased by that much?
25k is an insane amount to owe at that income.

No, same amount last year and we owed $6k. So we adjust up and now here we are with $26k.

No investments minus 401(k).

And you didn't notice that your take home paycheck was substantially higher than last year? The blame is entirely on you.
I would understand if the difference was lower, $2k or $3k. But $25k??? There is no way you missed that on your paycheck.

So my take home wasn’t higher, in fact it was a little lower. My take home is approximately $4800/ pay period. After 401(k)/FSA/ etc my gross income was $170k.

If you didn’t change your income significantly or your tax withholding significantly something is being calculated wrong. How much was withheld from your paycheck compared to last year you can look at this year and last years W2 to compare.

On a per paycheck basis, 4800 net (assuming you are paid 24 times per year?) your gross pay from 190k should be 7916, minus your 401k/fsa you should have around 6850 taxable. So you’re paying about 2850 in other deductions (healthcare, dental, etc…) and taxes. How much federal tax is withheld from that?

I don’t think anyone is paid 24 times per year, are they? It’s either 12 or 26.

Plenty of people are paid bimonthly. Maybe you should stay away from financial advice forums if you don't know this?!

Ah fair enough. I forgot about military and my spouse and I have always been paid 12 or 26 times. PP had assumed OP was paid 24 times and I have to say OP’s situation is a head scratcher so I was trying to puzzle it out myself, but my assumption was 26 times since that’s so familiar to me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Are you making that income for the first time? Is it the first time you owe so much in taxes? How come you didn’t realize that your take home per pay period had increased by that much?
25k is an insane amount to owe at that income.

No, same amount last year and we owed $6k. So we adjust up and now here we are with $26k.

No investments minus 401(k).

And you didn't notice that your take home paycheck was substantially higher than last year? The blame is entirely on you.
I would understand if the difference was lower, $2k or $3k. But $25k??? There is no way you missed that on your paycheck.

So my take home wasn’t higher, in fact it was a little lower. My take home is approximately $4800/ pay period. After 401(k)/FSA/ etc my gross income was $170k.

If you didn’t change your income significantly or your tax withholding significantly something is being calculated wrong. How much was withheld from your paycheck compared to last year you can look at this year and last years W2 to compare.

On a per paycheck basis, 4800 net (assuming you are paid 24 times per year?) your gross pay from 190k should be 7916, minus your 401k/fsa you should have around 6850 taxable. So you’re paying about 2850 in other deductions (healthcare, dental, etc…) and taxes. How much federal tax is withheld from that?

I don’t think anyone is paid 24 times per year, are they? It’s either 12 or 26.

Plenty of people are paid bimonthly. Maybe you should stay away from financial advice forums if you don't know this?!

Semi-monthly, but yes, this is very common. My current employer is biweekly, but each of my prior three jobs were semi-monthly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Are you making that income for the first time? Is it the first time you owe so much in taxes? How come you didn’t realize that your take home per pay period had increased by that much?
25k is an insane amount to owe at that income.

No, same amount last year and we owed $6k. So we adjust up and now here we are with $26k.

No investments minus 401(k).

And you didn't notice that your take home paycheck was substantially higher than last year? The blame is entirely on you.
I would understand if the difference was lower, $2k or $3k. But $25k??? There is no way you missed that on your paycheck.

So my take home wasn’t higher, in fact it was a little lower. My take home is approximately $4800/ pay period. After 401(k)/FSA/ etc my gross income was $170k.

If you didn’t change your income significantly or your tax withholding significantly something is being calculated wrong. How much was withheld from your paycheck compared to last year you can look at this year and last years W2 to compare.

On a per paycheck basis, 4800 net (assuming you are paid 24 times per year?) your gross pay from 190k should be 7916, minus your 401k/fsa you should have around 6850 taxable. So you’re paying about 2850 in other deductions (healthcare, dental, etc…) and taxes. How much federal tax is withheld from that?

I don’t think anyone is paid 24 times per year, are they? It’s either 12 or 26.

Military is. Pay dates are the 1st and 15th of each month.

DH is paid 24 times per year, he’s at a publicly traded tech company.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our calculations are way off too and we’re in the same bracket. We fill out the W4 every year and have still owed over $10k for the past two years. Even better, I just got a bill from the IRS for 2021 for an ADDITIONAL $4,500.

What’s happened in the past two years….hmmmmmm

Absolutely nothing in terms of tax legislation. This is all from the Tax Cuts and Jobs Act of 2017.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Are you making that income for the first time? Is it the first time you owe so much in taxes? How come you didn’t realize that your take home per pay period had increased by that much?
25k is an insane amount to owe at that income.

No, same amount last year and we owed $6k. So we adjust up and now here we are with $26k.

No investments minus 401(k).

And you didn't notice that your take home paycheck was substantially higher than last year? The blame is entirely on you.
I would understand if the difference was lower, $2k or $3k. But $25k??? There is no way you missed that on your paycheck.

So my take home wasn’t higher, in fact it was a little lower. My take home is approximately $4800/ pay period. After 401(k)/FSA/ etc my gross income was $170k.

If you didn’t change your income significantly or your tax withholding significantly something is being calculated wrong. How much was withheld from your paycheck compared to last year you can look at this year and last years W2 to compare.

On a per paycheck basis, 4800 net (assuming you are paid 24 times per year?) your gross pay from 190k should be 7916, minus your 401k/fsa you should have around 6850 taxable. So you’re paying about 2850 in other deductions (healthcare, dental, etc…) and taxes. How much federal tax is withheld from that?

I don’t think anyone is paid 24 times per year, are they? It’s either 12 or 26.

Lots of people are paid 24 times a year -- the 15th and the first.

We just switched to biweekly two years ago but for the first 10 years at my company it was twice a month.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Are you making that income for the first time? Is it the first time you owe so much in taxes? How come you didn’t realize that your take home per pay period had increased by that much?
25k is an insane amount to owe at that income.

No, same amount last year and we owed $6k. So we adjust up and now here we are with $26k.

No investments minus 401(k).

And you didn't notice that your take home paycheck was substantially higher than last year? The blame is entirely on you.
I would understand if the difference was lower, $2k or $3k. But $25k??? There is no way you missed that on your paycheck.

So my take home wasn’t higher, in fact it was a little lower. My take home is approximately $4800/ pay period. After 401(k)/FSA/ etc my gross income was $170k.

If you didn’t change your income significantly or your tax withholding significantly something is being calculated wrong. How much was withheld from your paycheck compared to last year you can look at this year and last years W2 to compare.

On a per paycheck basis, 4800 net (assuming you are paid 24 times per year?) your gross pay from 190k should be 7916, minus your 401k/fsa you should have around 6850 taxable. So you’re paying about 2850 in other deductions (healthcare, dental, etc…) and taxes. How much federal tax is withheld from that?

I don’t think anyone is paid 24 times per year, are they? It’s either 12 or 26.

Military is. Pay dates are the 1st and 15th of each month.

DH is paid 24 times per year, he’s at a publicly traded tech company.

My husband has been paid 24 times a year for all but 3 years of his 20 year career. Both his job on the hill and his job in the private sector have paid bimonthly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Are you making that income for the first time? Is it the first time you owe so much in taxes? How come you didn’t realize that your take home per pay period had increased by that much?
25k is an insane amount to owe at that income.

No, same amount last year and we owed $6k. So we adjust up and now here we are with $26k.

No investments minus 401(k).

And you didn't notice that your take home paycheck was substantially higher than last year? The blame is entirely on you.
I would understand if the difference was lower, $2k or $3k. But $25k??? There is no way you missed that on your paycheck.

So my take home wasn’t higher, in fact it was a little lower. My take home is approximately $4800/ pay period. After 401(k)/FSA/ etc my gross income was $170k.

Assuming your AGI before the standard deduction is 170k and DH is 40k (though likely lower), that puts your AGI at 185k after taking the standard deduction. For married filing jointly, your total tax owed for $185K would be $32070.

There's no way you could owe $25k, as that would mean you only had $7k in taxes withheld during the year.

OP could have significant interest income, which would be taxed at ordinary rates. It's not out of the realm of possibility with interest rates pushing 5%.

Significant interest income to the point that their tax bill on that interest income is 25k? They must be earning a shit ton of money in interest. If that was the case, OP wouldn't be acting surprised.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Are you making that income for the first time? Is it the first time you owe so much in taxes? How come you didn’t realize that your take home per pay period had increased by that much?
25k is an insane amount to owe at that income.

No, same amount last year and we owed $6k. So we adjust up and now here we are with $26k.

No investments minus 401(k).

And you didn't notice that your take home paycheck was substantially higher than last year? The blame is entirely on you.
I would understand if the difference was lower, $2k or $3k. But $25k??? There is no way you missed that on your paycheck.

So my take home wasn’t higher, in fact it was a little lower. My take home is approximately $4800/ pay period. After 401(k)/FSA/ etc my gross income was $170k.

Assuming your AGI before the standard deduction is 170k and DH is 40k (though likely lower), that puts your AGI at 185k after taking the standard deduction. For married filing jointly, your total tax owed for $185K would be $32070.

There's no way you could owe $25k, as that would mean you only had $7k in taxes withheld during the year.

OP could have significant interest income, which would be taxed at ordinary rates. It's not out of the realm of possibility with interest rates pushing 5%.

Significant interest income to the point that their tax bill on that interest income is 25k? They must be earning a shit ton of money in interest. If that was the case, OP wouldn't be acting surprised.

You're right- she'd need to have approx 2 mil in cash to get that kind of tax bill but I've seen weirder things on here. Maybe she forgot about a Roth conversion, or sale of some property. There are ways to get there because we are in the hole a similar amount. However OP seems to only be selectively answering questions so I'm leaning towards a troll now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Did you get a large bonus during the year, OP?

No, I work a non profit who does not give out bonuses.

[/quote

$190k at a non profit? is that still quite high or just avg nowadays?