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  1. #1
    Join Date
    Oct 2014
    Posts
    8,238

    Default Re: Owe the IRS and Not Sure Why

    Quote Quoting free9man
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    That isn't really a legal question. That's one for a CPA.
    I disagree that it is not a legal question. After all, tax law is still law.

    However, without looking at the entire return for this year and last I cannot comment on what the difference was that caused the balance due this year versus the refund last year. But I will note that the withholding exemptions for a job are computed assuming that the income from that job is the only income you have. With two incomes, the tax rates can get higher so that even if the exemptions were right if all you had was that one job it may not be right once you add the two together. Then throw in the various other income like sales commissions (which might have been subject to self-employment tax as well as income tax) and the sick pay and the withholding may well have been too low.

  2. #2
    Join Date
    Dec 2015
    Posts
    272

    Default Re: Owe the IRS and Not Sure Why

    Thanks Taxing Matters. I understand all the variables that can affect taxable income and plan to have this all looked over by a CPA. Are you able to direct me to 2014 Form 1040 tax tables? I have searched for hours and can only locate the 2015. Thinking back, I'm wondering if my return from last year is wrong. Based on the 2015 tax table, with the taxable income that we have, the tax liability is close to $12,000. Last year, with practically the same taxable income (less $1,500), our tax liability was only $8,500. I cannot find the 2014 tax tables to verify the taxable income of $63,400. Did federal taxes increase from 2014 to 2015?

  3. #3
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Owe the IRS and Not Sure Why

    Quote Quoting KBoy420
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    Thanks Taxing Matters. I understand all the variables that can affect taxable income and plan to have this all looked over by a CPA. Are you able to direct me to 2014 Form 1040 tax tables? I have searched for hours and can only locate the 2015. Thinking back, I'm wondering if my return from last year is wrong. Based on the 2015 tax table, with the taxable income that we have, the tax liability is close to $12,000. Last year, with practically the same taxable income (less $1,500), our tax liability was only $8,500. I cannot find the 2014 tax tables to verify the taxable income of $63,400. Did federal taxes increase from 2014 to 2015?
    To expand on what Taxing Matters said:

    Your wife had three W2s. Each one of those jobs withheld taxes based as if each of those jobs was her only income for the time period she was working. If she had any of those jobs at the same time, that automatically made her withholding too low. On top of that she had 1099-MISC income which likely resulted in some self employment tax, and no withholding. Then there was the third party sick pay with no withholding either.

    You, on the other hand, had the more stable income yet you took 2 exemptions, which means that your withholding was more designed for break even than a refund. So there was nothing left over in your withholding to help cover your wife's insufficient withholding, and your child was not enough of an added benefit to overcome that.

    Rather than comparing this year's income with last year's income, you should compare this year's total withholding to last year's total withholding...relative to total income. I think that you will find that relatively speaking you had much less withholding this year.

    As far as finding last year's tax tables, go to irs.gov and search for 2014 1040 instructions.

  4. #4
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Owe the IRS and Not Sure Why

    Quote Quoting KBoy420
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    Are you able to direct me to 2014 Form 1040 tax tables? I have searched for hours and can only locate the 2015.
    Here's Publication 17 for 2014. The tax tables are in there.

    https://www.irs.gov/pub/irs-prior/p17--2014.pdf

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