Talk To Me About Taxes

[renbee]

I know, such a thrilling topic.

I always feel like DH and I pay a lot of taxes. The first year we filed jointly and were both employed full time, I was shocked when we owed like $1,500 at tax time. I ended up taking a look at our W4s and when I filled out the two earners worksheet, found out that not only did we need to claim M0 (which we already were), but one of us also needed to elect to withhold an extra $50 or so per paycheck. DH is a teacher and I work for a nonprofit, so it's not like we make a ton of money. We have no kids but we own our home, so we itemize to take advantage of those deductions.

Is anyone else in this same boat? What do you do for withholding on your W4s? Is there something I'm missing? Do you usually owe or get money back at tax time?

[easilyunamused]

I always claim 1, and I don't own a home or have kids. I've always gotten a refund back. I've heard that the closer you are to a $0 return means you are getting the right amount of taxes back.

[cavewmninbrit]

I am an expat and my taxes are always fucked up... I am a teacher and DH is a post doc so on a list of people the IRS wants to track down for foreign a accounts we aren't one

[kariann12]

MH has done our taxes since we got married, but I do know that we both claim 0, we both have them take an extra $50 per paycheck and we got a huge refund each year. We like doing it this way since we can do things each spring with a big refund, like paying off debt or going on vacation. But as for why you guys have to pay in, I have no fucking clue.

[renbee]

Jan 24, 2015 14:18:43 GMT -5 @sluttybigb00bz said:

My husband claims S0 and I claim M0 plus $100. I started MH out last year at S0 plus $150 then dropped him down Later in the year after doing a mid year check in. I have a greater state tax withheld than he does.

We got our asses kicked the first year we were married. The only other time I wrote a check larger than that was the down payment on our house.

easilyunamused is correct. The last thing I want is a huge refund because it means the government was earning interest off my money instead of ME. We were pumped the year we owed $26, it was perfect.

We aim to pay at least what our total tax liability was the year before to avoid penalties and usually have a plan in place on what to do if we owe a few grand.

Ok, this sounds very similar to us. Glad to hear I'm not alone! I've talked to several friends/coworkers in real life about this and they are always baffled at out situation, so I started to wonder if I was missing something. We also have adjusted after that first "surprise" year and I think last year we got like $100 back, so that was good.

[joy]

I believe we both claim the minimum so we have the most taken out of paychecks. I always thought this was savvy (as I was never hit with a bill in April), however these boards have made me realize that it's not the best plan. The government has a loan from me all year that is interest-free. Once I realized that, I cringed.

Unfortunately, this doesn't exactly address your question except to say that yes, I paid a lot of taxes even when I was a graduate student making peanuts.

[Deleted]

You scared me R@renbee lol. I don't want to have to owe

We may need to owe because DH and I both claimed like 1 or 2 instead of 0. We always get a refund, but DH doesn't think we will this year. We are seriously tight right now because I just paid off my medical bills from years ago to fix my credit, and then we lost a weeks pay for both of us, with dh being in the hospital. Meh.

[renbee]

Jan 24, 2015 14:28:15 GMT -5 @sangriapirate said:

You scared me R@renbee lol. I don't want to have to owe

We may need to owe because DH and I both claimed like 1 or 2 instead of 0. We always get a refund, but DH doesn't think we will this year. We are seriously tight right now because I just paid off my medical bills from years ago to fix my credit, and then we lost a weeks pay for both of us, with dh being in the hospital. Meh.

I hope you don't owe! It was not a fun April in our house that year

[Ray]

We usually get a couple hundred bucks back. The year we went out east we owed a lot but my tuition credits brought it back and saved us. Moving back to ontario we got a couple grand back due to income tax differences between provinces and tuition credits. We'll probably get a couple hundred back again this year n

[Deleted]

Ugh. We owe a lot this year since MH is self employed and made a lot more than expected this year. It's a good problem to have, but I get sad writing that check when it could go to better things...

[mishy2010]

Ugh just thinking about this makes me cringe. I effed up our taxes two years ago which caused us to owe what we were supposed to get back as a refund last year. Then for 2014 I made a mistake on our dependent care FSA contributions so we are going to owe on that. I think we are going to hire someone to do our taxes this year since I really cannot be trusted.

[ghostmonkey]

Jan 24, 2015 14:03:17 GMT -5 renbee said:

I know, such a thrilling topic.

I always feel like DH and I pay a lot of taxes. The first year we filed jointly and were both employed full time, I was shocked when we owed like $1,500 at tax time. I ended up taking a look at our W4s and when I filled out the two earners worksheet, found out that not only did we need to claim M0 (which we already were), but one of us also needed to elect to withhold an extra $50 or so per paycheck. DH is a teacher and I work for a nonprofit, so it's not like we make a ton of money. We have no kids but we own our home, so we itemize to take advantage of those deductions.

Is anyone else in this same boat? What do you do for withholding on your W4s? Is there something I'm missing? Do you usually owe or get money back at tax time?

Unless you paid more in interest and property taxes than the standard deduction (which for 2014 is $12,400) itemizing isn't helping you. It's costing you a lot of money. 

Otherwise it sounds like your combined AGI must push you up a tax bracket and your withholding is at the lower bracket. Some of you changing to S-0 would likely solve your issue. Any accountant worth a shit should have told you that. You did consult an account to double check your numbers, right? (H&R Block is not an accountant.)

[squeakyduck]

Ugh. We always owe a lot. We keep trying to fix our withholding, but it hasn't worked yet. GM's accountant idea is excellent, and i'm judging myself for not thinking of it before. (The first year they were prepared by a professional, but we've been on our own since then.)

[juliayadda]

Jan 24, 2015 21:48:51 GMT -5 @sluttybigb00bz said:

<--- has a masters in accounting, has done tax prep for a cpa, still pays a cpa to do our taxes each year

I cant wait to start talking IFRS and GAAP with you SBB... such sexy topics.

[renbee]

Jan 24, 2015 21:23:34 GMT -5 ghostmonkey said:

Jan 24, 2015 14:03:17 GMT -5 renbee said:

I know, such a thrilling topic.

I always feel like DH and I pay a lot of taxes. The first year we filed jointly and were both employed full time, I was shocked when we owed like $1,500 at tax time. I ended up taking a look at our W4s and when I filled out the two earners worksheet, found out that not only did we need to claim M0 (which we already were), but one of us also needed to elect to withhold an extra $50 or so per paycheck. DH is a teacher and I work for a nonprofit, so it's not like we make a ton of money. We have no kids but we own our home, so we itemize to take advantage of those deductions.

Is anyone else in this same boat? What do you do for withholding on your W4s? Is there something I'm missing? Do you usually owe or get money back at tax time?

Unless you paid more in interest and property taxes than the standard deduction (which for 2014 is $12,400) itemizing isn't helping you. It's costing you a lot of money. 

Otherwise it sounds like your combined AGI must push you up a tax bracket and your withholding is at the lower bracket. Some of you changing to S-0 would likely solve your issue. Any accountant worth a shit should have told you that. You did consult an account to double check your numbers, right? (H&R Block is not an accountant.)

We use turbo tax online to do our taxes. We have several other deductions besides interest and property taxes, and for the past few years it has added up to be more than the standard deduction, so we have itemized.

I have not consulted with an accountant on our taxes (other than myself I suppose - I have an accounting degree). Honestly, our return is fairly straightforward, and when I have looked into accountants I didn't think it was worth the expense.

You're correct - we do fall into lower tax brackets individually than we do combined, so that is why we have to withhold extra on our W4s.

[butlerfan]

Jan 24, 2015 21:23:34 GMT -5 ghostmonkey said:

Jan 24, 2015 14:03:17 GMT -5 renbee said:

I know, such a thrilling topic.

I always feel like DH and I pay a lot of taxes. The first year we filed jointly and were both employed full time, I was shocked when we owed like $1,500 at tax time. I ended up taking a look at our W4s and when I filled out the two earners worksheet, found out that not only did we need to claim M0 (which we already were), but one of us also needed to elect to withhold an extra $50 or so per paycheck. DH is a teacher and I work for a nonprofit, so it's not like we make a ton of money. We have no kids but we own our home, so we itemize to take advantage of those deductions.

Is anyone else in this same boat? What do you do for withholding on your W4s? Is there something I'm missing? Do you usually owe or get money back at tax time?

Unless you paid more in interest and property taxes than the standard deduction (which for 2014 is $12,400) itemizing isn't helping you. It's costing you a lot of money. 

Otherwise it sounds like your combined AGI must push you up a tax bracket and your withholding is at the lower bracket. Some of you changing to S-0 would likely solve your issue. Any accountant worth a shit should have told you that. You did consult an account to double check your numbers, right? (H&R Block is not an accountant.)

All of this,..I have a degree in accounting and trust me I had classes on oincome tax and got to study the tax code and quote/ recite it.

[Deleted]

I keep reading the title of your thread as Talk To Me About Texas.

[expatmama11]

Jan 24, 2015 14:17:46 GMT -5 cavewmninbrit said:

I am an expat and my taxes are always fucked up... I am a teacher and DH is a post doc so on a list of people the IRS wants to track down for foreign a accounts we aren't one

Yes! Taxes as an expat are super confusing. My husbands employer hires Deloitte to take care of all of our stuff for us bc the tax codes are insane. We have to pay hypothetical taxes and then it gets figured out at the end of the year.

[babycowbell]

I think we're both at M1 plus we pay in addition to that each paycheck, and we owed a lot last year. I think we were more on top of it for 2014, so hopefully that doesn't happen again.

We're also both CPAs and we don't do our own taxes.

[rufus426]

We owed about $1,000 our first year married, but then we changed our W4's to S0 and ended up getting back a couple hundred dollars. It works for us to get a small amount back, rather than paying out anything after the holidays.

[Deleted]

Coming out of lurking for this question- what's the best thing to claim on your w4 to get the most back when married? Last year was the first full year we were married and we're getting fucked on our return.

[renbee]

Jan 25, 2015 10:02:18 GMT -5 @rutherily said:

Coming out of lurking for this question- what's the best thing to claim on your w4 to get the most back when married? Last year was the first full year we were married and we're getting fucked on our return.

If you each claim S0 on your w4s it will withhold the most taxes. I recommend looking at the two earners worksheet on the W4, it helps you determine the correct withholding for a couple with two incomes. Ideally you want to end up not owing and not getting any money back either.

[renbee]

So for these of you that pay an accountant to prepare your taxes - how much do you pay for this service? How did you go about finding an accountant that you liked and trusted?

[ghostmonkey]

Jan 25, 2015 10:16:15 GMT -5 renbee said:

So for these of you that pay an accountant to prepare your taxes - how much do you pay for this service? How did you go about finding an accountant that you liked and trusted?

If I paid someone to do mine, I have a friend in mind that does them for some of our other friends. I know at least one of them has passive income (which we have as well) and he's done a good job keeping them from owning from it. We still have a buttload of carryover loss, so I'm not overly concerned at this point. 

I also do a preliminary tax run a couple times a year, usually in August and again in late November so if we are getting to the point where we might owe we can make some quick changes to a W4 to prevent it and spread out the payment instead of it being a chunk. But I'm also a big nerd that enjoys doing that crap. And I grew up on a farm and my mom had to do that so they knew what they had to spend in December to not end up owing. 

[ghostmonkey]

My mom always had their essentially done as well, but still wanted someone else to look it over (and they would be more on top of changes to the codes than she was). Theirs were more than that since theirs are pretty complicated. I think ours as they are would run around $150-200.

[ghostmonkey]

Jan 25, 2015 11:37:33 GMT -5 jennykat said:

Now I'm terrified. MH and I just got married in November so this will be the first year we file together. We are both teachers. Neither of us has ever owed individually, but now I'm scared that we will owe this year after reading this thread. We are planning on buying a home this summer, so this is not good news.

Did you change your withholdings after you got married? If not, then you will likely be fine if you were pulling S0 or even S1. 

[ghostmonkey]

Also, any decent accountant (or software program for that matter) can show you the difference between filing together or separate. Depending on how your taxes were held, what deductions you have, and where your income ends up, filing separate does work out better for some.

[ghostmonkey]

Jan 25, 2015 11:41:38 GMT -5 jennykat said:

Jan 25, 2015 11:38:50 GMT -5 ghostmonkey said:

Did you change your withholdings after you got married? If not, then you will likely be fine if you were pulling S0 or even S1. 

Neither of us changed anything after (phew). When we have to fill out new ones for the new school year, should we watch out for that?

Yes. See where you end up this year and go from there. 

[Deleted]

Jan 24, 2015 22:03:09 GMT -5 @emilie818 said:

Jan 24, 2015 15:28:35 GMT -5 @spicymama said:

Ugh. We owe a lot this year since MH is self employed and made a lot more than expected this year. It's a good problem to have, but I get sad writing that check when it could go to better things...

Does YH pay his self-employment taxes quarterly?  Doing so prevents you from accruing and paying penalties.

I take extra witholding on my checks each payday to cover his taxes, but he made more this year than last year. We won't pay penalties this year since we paid in as much as we did last year. 

[renbee]

Jan 25, 2015 11:48:07 GMT -5 ghostmonkey said:

Also, any decent accountant (or software program for that matter) can show you the difference between filing together or separate. Depending on how your taxes were held, what deductions you have, and where your income ends up, filing separate does work out better for some.

This - the year we ended up owing on our federal taxes I did the calculations to file separately through turbo tax and it was worth it for us to file "married filing separately". We owed slightly less on our federal taxes, and got money back on our state taxes (instead of owing) this way.