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  1. #1

    Angry Ridiculous High Amount in Taxes Owed

    I worked at the same place for all of 2009 and I started working there in late 2004. When I filed out the tax form that you are given when you start a new job where you claim dependents and all that I followed the instructions in the form and I didn't claim anything that I wasn't entitled to.

    While I was married from 2004 to 2009 my ex-wife did the tax filing, since she knew about that better than me (I immigrated here in 2003). For the 2008 taxes, I ended up owing a little bit in federal taxes (around $65 I think) and I got a small refund from the state (NC). That was the last time I filed jointly.

    Today I prepared the taxes with Turbo Tax Freedom edition online and it says I owe $1759 in federal and $337 in state taxes. There has to be something wrong in this. I double checked that entered all the amounts correctly from the W2 form. My wages for 2009 are $29278.08 according to the W2.

    I don't understand how is it possible, if I had taxes taken off my paycheck all year long, that now I owe $2096. It's ridiculous. Even worse, I don't have a way to pay for this, even if I had a job currently, but I don't, because I recently had to quit because of a harsh working environment that was taking a toll on my health, so currently I have less than the amount owed, and I have to use that to survive until I find another job.

    What can I do? If there are no errors and it turns out I owe this huge amount that currently I have no way of paying for, does the IRS and NC state agency offer some kind of differed payment option?

  2. #2
    Join Date
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    Default Re: Ridculous High Amount in Taxes Owed

    What are you stating? That you had your wife listed as a dependent all year, even though you have divorced, and that as a consequence your pay was determined based upon your claim of two dependents instead of only yourself?

  3. #3

    Default Re: Ridculous High Amount in Taxes Owed

    Quote Quoting Mr. Knowitall
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    What are you stating? That you had your wife listed as a dependent all year, even though you have divorced, and that as a consequence your pay was determined based upon your claim of two dependents instead of only yourself?
    I don't think I had my wife listed as a dependent. If I remember correctly, when I filled out that form in 2004 that in the instructions it said that I wasn't supposed to enter a deduction for my wife so I didn't. But just to make sure I called my former employer and they will make a copy of that form so I can check for myself.

    During 2009 we were legally married but separated (NC requires being separated for one year before you can file for divorce). I was told If I wanted I could file jointly because these are the 2009 taxes when by law we were still married, but she says that her mother (with whom she's been living most of 2009) claimed her as a dependent and if I file jointly then the IRS would audit both her and me. I don't know if this is true because I'm ignorant when it comes to taxes.

    One thing that strikes me as a little odd is that looking at the 2008 W-2 and the 2009 all withheld amounts are almost the same except for the Federal income one, which was $1088.40 in 2008 but went down to $451.50 in 2009. However, at no point I asked my former employer to make any changes in my tax deductions, or filled out any forms. This makes me think that it can be one reason to why my tax due is to high.

  4. #4
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    Default Re: Ridculous High Amount in Taxes Owed

    It's difficult to believe you would owe as much tax as you do if your W2 were correct. Make sure it is, so this doesn't happen again next year.

  5. #5
    Join Date
    Oct 2006
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    Default Re: Ridculous High Amount in Taxes Owed

    Quote Quoting Ikeepgettingscrewed
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    I don't think I had my wife listed as a dependent. If I remember correctly, when I filled out that form in 2004 that in the instructions it said that I wasn't supposed to enter a deduction for my wife so I didn't. But just to make sure I called my former employer and they will make a copy of that form so I can check for myself.

    During 2009 we were legally married but separated (NC requires being separated for one year before you can file for divorce). I was told If I wanted I could file jointly because these are the 2009 taxes when by law we were still married, but she says that her mother (with whom she's been living most of 2009) claimed her as a dependent and if I file jointly then the IRS would audit both her and me. I don't know if this is true because I'm ignorant when it comes to taxes.

    One thing that strikes me as a little odd is that looking at the 2008 W-2 and the 2009 all withheld amounts are almost the same except for the Federal income one, which was $1088.40 in 2008 but went down to $451.50 in 2009. However, at no point I asked my former employer to make any changes in my tax deductions, or filled out any forms. This makes me think that it can be one reason to why my tax due is to high.
    Less was withheld due to the Making Work Pay credit...however that much less seems a bit much.

    Your bigger problem is that you are filing married filing separately, and that is what is causing your taxes to be so high. Once you get your divorce, that problem will go away, but you really need to re-examine your withholding.

    A single person with no dependents and no particular credits, really shouldn't claim more than 1 exemption, and sometimes needs to claim 0 exemptions.

  6. #6

    Default Re: Ridculous High Amount in Taxes Owed

    Quote Quoting llworking
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    Less was withheld due to the Making Work Pay credit...however that much less seems a bit much.

    Your bigger problem is that you are filing married filing separately, and that is what is causing your taxes to be so high. Once you get your divorce, that problem will go away, but you really need to re-examine your withholding.

    A single person with no dependents and no particular credits, really shouldn't claim more than 1 exemption, and sometimes needs to claim 0 exemptions.
    I'm not filing as married. I followed the wizards on both the H&R Block and Turbo Tax online free apps and I selected in both that my status was legally separated in 2009, so they both said that I have to file as single. I already got my divorce, in March of this year. (in case there's any confusion, NC has this idiotic law by which you can't file for divorce until you've been separated for one year and one day).

    Looking at the W4 online I believe I entered three deductions, all of them according to my situation both in 2004 that didn't change until March of this year. The item A says: "A Enter “1” for yourself if no one else can claim you as a dependent" so entered 1 for that since it's true. I also entered 1 under item B since I was in the category "You are married, have only one job, and your spouse does not work". Although separated, for all of 2009, I was legally married (not by choice, but because of the stupid law I mentioned above). And finally, item C says: "Enter “1” for your spouse. But, you may choose to enter “-0-” if you are married and have either a working spouse or more than one job." Well, I had a spouse and I was legally married during 2009. So I didn't fill out anything that I wasn't entitled to.

  7. #7
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    Oct 2006
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    Default Re: Ridculous High Amount in Taxes Owed

    Quote Quoting Ikeepgettingscrewed
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    I'm not filing as married. I followed the wizards on both the H&R Block and Turbo Tax online free apps and I selected in both that my status was legally separated in 2009, so they both said that I have to file as single. I already got my divorce, in March of this year. (in case there's any confusion, NC has this idiotic law by which you can't file for divorce until you've been separated for one year and one day).

    Looking at the W4 online I believe I entered three deductions, all of them according to my situation both in 2004 that didn't change until March of this year. The item A says: "A Enter “1” for yourself if no one else can claim you as a dependent" so entered 1 for that since it's true. I also entered 1 under item B since I was in the category "You are married, have only one job, and your spouse does not work". Although separated, for all of 2009, I was legally married (not by choice, but because of the stupid law I mentioned above). And finally, item C says: "Enter “1” for your spouse. But, you may choose to enter “-0-” if you are married and have either a working spouse or more than one job." Well, I had a spouse and I was legally married during 2009. So I didn't fill out anything that I wasn't entitled to.
    I really hate those worksheets. They almost never work properly for anyone.

    Sure you were legally allowed to claim those exemptions, but your end result did not work out well for you.

    I have been a tax professional for over 25 years. Take my word for it. A single person with no dependents should claim no more than 1 exemption on their W4 if they want a good result at the end of the year, and 0 exemptions if they want to be guaranteed not to have to pay in any tax at the end of the year.

  8. #8

    Default Re: Ridculous High Amount in Taxes Owed

    Quote Quoting llworking
    View Post
    I really hate those worksheets. They almost never work properly for anyone.

    Sure you were legally allowed to claim those exemptions, but your end result did not work out well for you.

    I have been a tax professional for over 25 years. Take my word for it. A single person with no dependents should claim no more than 1 exemption on their W4 if they want a good result at the end of the year, and 0 exemptions if they want to be guaranteed not to have to pay in any tax at the end of the year.
    Yes, after talking to an IRS agent and a friend who was a tax auditor I learned that it's best to either claim one exception or none at all, but the way the whole thing is setup is outrageous. At the time I filled out the W4 in 2004 I claimed 3 exceptions because I read the instructions and that was what I was entitled to. But if you follow the instructions and still you end up owing money, then why do they write the instructions that way?

    Still, I learned that the main reason why I'm having to pay such a huge amount is that my ex-wife's mother screwed me up by claiming my ex as a dependent for 2009, which if she would have told me at the beginning of 2009 that she was going to do that, then I would have changed my W4 to single and taken out the exception on item C. Had I done that, they would have taken more tax out of my paycheck, but I wouldn't be faced with paying over $2000 in taxes now. Even though I became separated at the beginning of 2009, by law we were still married, so I didn't think I had to change anything, and besides this was the last year that I was going to be able to file jointly, since for all 2009 I was still legally married.

    This tax system is just ridiculous, I don't understand how can it be possible that married couples get a much higher standard deduction than singles, after all, married couples normally have two incomes and it would be easier for them to pay more taxes than a single person that struggles to pay rent or a mortgage, bills and groceries. It's just doesn't make any sense.

  9. #9
    Join Date
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    Default Re: Ridiculous High Amount in Taxes Owed

    I do the payroll where I am, and I just went through a meeting with an upset employee yesterday who had to pay $1,400 to the IRS this week. As employers, we give no advice to employees on how to fill out the W-4's, and this person had 3 allowances entered on it going back a few years.

    What I did was, suggest that she and some others at our employee to use a handy payroll withholding calculator, one that I found on the internet, and this does the state withholdings too, and I found the results close to actual withholdings calculated by our Quickbooks Payroll. The link is:

    http://www.yourmoneypage.com/withhold/ny.php

    You'll need to set it for your state (I'm in NY), and create a userID, and you're ready to go.

    For married couples though, it appears safer to put down single for both, else the withholdings would come out short.

    I hear you about taxes being unfair for singles. They did change the tax laws a few years back for married couples, because before the change, my wife made over 6 figures, i wasn't, and to withold properly, I had to withold over 60% of my paycheck. The lower income spouse's tax rate is taxed at the top rate then, around 38% as I recall, then state taxes at over 12%, and then add in social security and medicare.

    At the time, when I factor in the withholdings, gas going to work, suits I had to buy, cost of takeout because of our schedules, it made more sense for me to start a consulting gig with just $20K in revenues, that I can deduct 20K in expenses every year. Phasing in a correction for the marriage penalty worked for us, because without it, it made more sense for the lower income spouse to stay home and sleep. However, it seems unfair to singles.

    Anyway, good luck to you.

  10. #10

    Default Re: Ridiculous High Amount in Taxes Owed

    Another thing that didn't work out so well for tax year 2009 was that making work pay credit. We weren't given a choice as to whether or not we wanted it used to figure out withholdings, and when you deliberately claim married 0 (we are married with five children still at home) that can mess you up.

    It's also a good idea to submit a new W4 at the beginning of each year, AND make sure that no changes were made by the employer for the previous year. My sis learned the hard way that her hubby's employer had changed his W4 exemptions from married 0 (they have the same situation as we do, married with 5 children at home) to married/3, applied the making work pay credit, and massively messed up their planning. They did it at the same time BIL got a raise, so they attributed the increase in income to that, and never checked the withholding until they got his W2.

    I understand that a lot of tax pro's advise you to keep your withholding as close to your liability as possible (thus not 'loaning' your money to the gov interest free), but just a small change during the tax year can really mess you up come tax time.

    Good luck, and I hope that you get this figured out so that you don't have to deal with this situation again.

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