| Posted By |
Message |
LIMOMx2
...
Member since 5/05 24989 total posts
Name:
|
? - Why would people owe soo much money for taxes?
Just curious?
|
Posted 3/15/07 11:02 AM  |
| |
|
Long Island Weddings
Long Island's Largest Bridal Resource |
MrsPornStar
Partners in crime
Member since 10/05 14656 total posts
Name:
Mama
|
Re: ? - Why would people owe soo much money for taxes?
We owed a lot in the past because we worked 2 jobs and were not taxed appropriately.
|
| Posted 3/15/07 11:02 AM |
| |
|
Jesaroo
is not the girl you knew
Member since 5/05 14266 total posts
Name:
Jes
|
Re: ? - Why would people owe soo much money for taxes?
maybe they get more in their weekly checks
|
| Posted 3/15/07 11:03 AM |
| |
|
nov04libride
big brother <3
Member since 5/05 14672 total posts
Name:
Me
|
Re: ? - Why would people owe soo much money for taxes?
We made a bunch of interest from bank accounts.
|
| Posted 3/15/07 11:04 AM |
| |
|
Bxgell2
Perfection
Member since 5/05 16438 total posts
Name:
Beth
|
Re: ? - Why would people owe soo much money for taxes?
My husband owns his own company, so he doesn't pay taxes like a regular salaried employee would, instead he has to make "tax estimates" every quarter, and send a certain percentage of his earnings to the IRS in anticipation of what he would owe at the end of the year.
THe problem is his salary fluctuates a great deal, as did mine in the last year. So, the estimates are rarely, if never, on target, and are usually less than what we end up owing, so at the end of the fiscal year, after we look at our final salaries, and what we paid to the IRS, we usually discover we're under by several thousand.
This time it wasn't so bad - we only owe about $2k, BUT, at the same time, we have to make our first 2007 quarterly estimate, which is another $7k.
Make sense?
|
| Posted 3/15/07 11:04 AM |
| |
|
Christine
2nd verse same as the 1st
Member since 5/05 15287 total posts
Name:
|
Re: ? - Why would people owe soo much money for taxes?
Large capital gains or investment income that is not accounted for with estimated taxes.
Incorrect withholdings from pay checks. Large year end bonuses can through you into the next tax bracket that was not accounted for in payroll during the year.
Having too many deductions on your W-4.
IRA or 401(k) withdrawls.
|
| Posted 3/15/07 11:06 AM |
| |
|
LIMOMx2
...
Member since 5/05 24989 total posts
Name:
|
Re: ? - Why would people owe soo much money for taxes?
Thanks for clearing that up
|
| Posted 3/15/07 11:06 AM |
| |
|
MarathonKnitter
HAPPY
Member since 2/07 17374 total posts
Name:
EMBRACING CHANGE
|
Re: ? - Why would people owe soo much money for taxes?
the short answer is: they didn't pay enough during the year.
why that happens? soooooo many reasons!!
like stated above: being self-employed, not withholding enough. sometimes it could be because of a change in life-style... like getting married.
|
| Posted 3/15/07 11:08 AM |
| |
|
Maathy317
Grammie's Little Man
Member since 2/06 3235 total posts
Name:
D
|
Re: ? - Why would people owe soo much money for taxes?
There's the dreaded Alternative Minimum Tax which was introduced by Congress a few years back. It was supposed to make sure that the rich paid their fair share. However, Congress failed to pass new legislation that would amend it and, because they didn't, alot of families are falling into this category.
|
| Posted 3/15/07 11:10 AM |
| |
|
~Colleen~
my loves...
Member since 5/05 9129 total posts
Name:
guess
|
Re: ? - Why would people owe soo much money for taxes?
Posted by Christine
Large capital gains or investment income that is not accounted for with estimated taxes.
That was us last year - we cashed out some stock. But we knew what we'd owe so we put 1/3 aside so we had the money come tax time.
Previous years DH had to pay for various reasons. I evened us out our first year married but we still owed about $1k.
|
| Posted 3/15/07 11:13 AM |
| |
|
MsMBV
:P
Member since 5/05 28602 total posts
Name:
Me
|
Re: ? - Why would people owe soo much money for taxes?
Posted by hmpena
We owed a lot in the past because we worked 2 jobs and were not taxed appropriately.
This is what happened to us when we had to pay. DHs bookkeeper at his job was effing everyone's paycheck up & the whole place owed
|
| Posted 3/15/07 11:14 AM |
| |
|
cazhley
I ♥ cheesiness.
Member since 1/07 1429 total posts
Name:
Cassie
|
Re: ? - Why would people owe soo much money for taxes?
as Bxgell said, goes for me to.
I pay estimated taxes throughout the year (quarterly) as self-employed. it's kind of like withholding, but it's an estimate.
income fluctuates. if you make more this year than last, you owe more.
as long as you pay an estimated amount equal to the previous year, you're fine.
i ended up owing about 1K this year, which is fine. (i say, better that it was in my savings for a coupla months before going to the gov't.)
|
| Posted 3/15/07 11:18 AM |
| |
|
MrsS2005
Mom of 3
Member since 11/05 13118 total posts
Name:
B
|
Re: ? - Why would people owe soo much money for taxes?
This is the first year I didn't get $ back. This was due to the marriage penalty and not withholding extra money. Also, we don't have any deductions (house, kids, etc).
I don't mind owing now instead of having more taken out of my paycheck throughout the year. As my tax professor pointed out, why give the government "free" money? This also applies if you withhold too much. You can invest that extra money and earn interest throughout the year. This may not work for everyone, but for now, it works for us.
|
| Posted 3/15/07 11:38 AM |
| |
|
Bxgell2
Perfection
Member since 5/05 16438 total posts
Name:
Beth
|
Re: ? - Why would people owe soo much money for taxes?
Posted by MrsS2005
I don't mind owing now instead of having more taken out of my paycheck throughout the year. As my tax professor pointed out, why give the government "free" money? This also applies if you withhold too much. You can invest that extra money and earn interest throughout the year. This may not work for everyone, but for now, it works for us.
We have the same perspective - I'd rather invest the money now for myself than have the government hold onto my money for 12 months, earn interest and then give it back to me.
Same goes for paying our taxes - we use the code to the best of our ability to pay ourselves instead of the IRS. Last year we bought a new car through the tax code, putting $10k towards the car instead of the IRS. This year we put $10k into our IRA accounts to reduce our tax liability - money into our own retirement accounts instead of the IRS.
|
| Posted 3/15/07 11:49 AM |
| |
|
