Re: 0 dependents on W-2, still paying high taxes


"Les Ismore" <DetroitMetroGnome@xxxxxxxxx> wrote
I am married and have two kids. My wife works as well. We earn average
salaries for people in the IT industry. In my W-2, I have specified 0
dependents. In my wife's W-2, she has specified 1 dependent. I would
assume that, with this approach, our taxes should either be low at the
end of the year or we should be expecting a refund. However, when I
entered all the information in TaxCut, it shows that I owe almost
$3000. What's up with that? We have a house and we have entered the
mortgage interest we paid along with the real estate taxes. I
participate in 401K, but my wife does not. My 401K contributions are
very low, though. We don't have any other significant income. Does
anybody know why we would owe so much? Am I missing something very
obvious here?


Short of the payroll program being used is not computing the withholding
correct, or they have it entered wrong, it's hard to say.

Double check with the payroll people to be sure that everything is entered
correctly, withholding exemptions as well as the pay frequency. The reason
for the pay frequency is that if the program is showing you coded as a
monthly slary, yet you are being paid twice weekly, it'll not withhold
enough on each check.

If that isn't the problem (everything is right), then increase withholding
by droping the exemptions to "0" for both of you, or have one at the
"married but withhold at the higher single rate".

That or send in quarterly estimates.

Scroll through Pub 15 to see if your withholdings are close to what the Pub
tables show. Don't expect them to be exact, but they should be close
enough. If one of the withholdings is ~~WAY~~ off, then you know which
employer to be looking at to fix their problem.

http://www.irs.gov/pub/irs-pdf/p15.pdf

Be sure you are on the right table.



--
Paul Thomas, CPA
paulthomascpapc@xxxxxxxxxxxxx









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