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Why would i owe taxes

why would i owe taxes

7 Answer s

That looks about right. You’re in the 15 percent tax bracket and you had 6 percent withheld. How did you file in the past to get money back?

Adirondackwannabe ( 36127 ) “Great Answer” ( 0

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Doing a thumbnail calculation here, it looks like the personal exemption for singles in 2012 is $3800, and the standard deduction (for those who don’t itemize) for the same status and year is $5950.

That looks like a reduction to the gross of $9750, so your “around” $29,000 gross would be reduced to a Taxable Income of “around” $19,250. The tax owed on $19,250 according to the 2012 tax tables is $2456.

Are you sure that you only owe $500?

Depending on prior years’ tax credits, you may have been able to reduce your “Adjusted Gross Income”, and if you had been able to itemize deductions to more than the standard deduction, you may have decreased your “Taxable Income”. Otherwise, this stuff is pretty well cut and dried.

I’m also curious about how you managed to reduce your tax in prior years, if the return is as simple as you present.

I think you may

want to file a new W-4 with your employer to ensure that “slightly more” tax is withheld each pay period. (I think you can also specify an amount of excess to withhold; in your case, $10 per week would do nicely.) But it’s been ages since I’ve done that, so the rules have probably changed.

In any case, I would definitely want to under-withhold (as you are, but maybe not by that much!) rather than over-withhold. I hate tax refunds.

CWOTUS ( 21443

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Can you go through last year’s tax return lne by line to find where the difference is? If your income is the same, then it seems there must be a difference in the threshold at which you are taxed, or in your credits, exemptions, or the amount of tax withheld by your employer. But we don’t know what any of those are – you will find them in your tax return.

Remember that tax laws changed very recently, and it’s possible you are either in a higher bracket or your percentage is higher. Of course this is only accounting for the numbers you put in the post.

Category: Taxes

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