PiLfan Posted February 21, 2008 Share Posted February 21, 2008 Oh the joys of tax season. Any of you out there file jointly, where both you and your significant other earn income? This isn't a ***** a moan thread about the dreaded marriage penalty (though that pisses me off too), but rather about how you report your status and # of allowances on your W-4. After I got married, my wife and I, being the studious and honest citizens that we are, updated our W-4s from single to married. Realizing that this would probably decrease our withholdings, I wanted to make sure we still had enough taken out so we wouldn't end up with a nasty tax bill come April. So I had both of us minimize our allowances to zero. Little did I know...apparently zeroing out your allowances doesn't do nearly enough to increase your withholdings...not by a long shot. Even after itemizing our deductions to the maximum amount allowed by the IRS, we still owe nearly $4000! WTF? After doing some research, I found out that apparently withholding rates escalate for married couples well beyond those who are single (even more than I had presumed), and that you need to accomodate for this by requesting additional amounts be withheld...OR, we can change our status on the W-4 back to single (yes, apparently you CAN do that ) to futher increase our withholdings. Anybody else get caught off guard by this? Considering the hugely dramatic impact getting married has on taxes, withholding amounts and tax rates, it's interesting how little is made of this or communicated to the public at large. You make an honest change to your W-4, zero out your allowances, and figure things will turn out similar to how you filed when you were single, typically with getting a refund. I've fixed our withholding amounts now so this shouldn't be an issue next year, but finding this out the hard way is a major bowl of piss in my morning cornflakes let me tell you. :mad: :mad: :mad: Link to comment Share on other sites More sharing options...
dwbiggs Posted February 21, 2008 Share Posted February 21, 2008 I am in the same situation and for a few years claimed too many allowances and last year owed something like 3,000.00. This past year I claimed 2 or 3 and I think the wife claimed 1, and we maxed out our 401K's. I just did my taxes and we are getting 75.00 back from Fed and 385.00 back from VA. I may knock off another alowance for this year. We also have a daughter to claim. Link to comment Share on other sites More sharing options...
dchogs Posted February 21, 2008 Share Posted February 21, 2008 why do you want to overpay uncle sam for 12 months, let him get the interest on your extra payments, and then take back the extra payments that are given to you like they're a gift? i take as many exemptions as i can (legally and ethically). i'd rather owe uncle sam some money after making interest on it for a year (theoretically). in my mind the gov't is doing married couples a favor... as long as they know about it and the fact that they'll likely owe some money in april. Link to comment Share on other sites More sharing options...
skinstzar Posted February 21, 2008 Share Posted February 21, 2008 Dude you're doing your taxes all wrong. My wife and I filed Jointly, we claim little to no allowances and we are getting back 16K. Get an accountant. Best money I ever spent. Link to comment Share on other sites More sharing options...
PiLfan Posted February 21, 2008 Author Share Posted February 21, 2008 why do you want to overpay uncle sam for 12 months, let him get the interest on your extra payments, and then take back the extra payments that are given to you like they're a gift?i take as many exemptions as i can (legally and ethically). i'd rather owe uncle sam some money after making interest on it for a year (theoretically). in my mind the gov't is doing married couples a favor... as long as they know about it and the fact that they'll likely owe some money in april. because, as far as i understand it, you want to avoid paying penalties for underpayment if possible. if you claim too many allowances and you owe too much (theoretically not a bad idea, so long as your planning for it and intently earning interest on the amount you will owe come April), you'll get snagged with "underpayment" penalties for claiming too many allowances or not paying enough estimated taxes. Link to comment Share on other sites More sharing options...
twa Posted February 21, 2008 Share Posted February 21, 2008 Dude you're doing your taxes all wrong. My wife and I filed Jointly, we claim little to no allowances and we are getting back 16K. Get an accountant. Best money I ever spent. It even is deductible It does sound like he's screwing up somewhere. Link to comment Share on other sites More sharing options...
China Posted February 21, 2008 Share Posted February 21, 2008 Oh the joys of tax season.Any of you out there file jointly, where both you and your significant other earn income? This isn't a ***** a moan thread about the dreaded marriage penalty (though that pisses me off too), but rather about how you report your status and # of allowances on your W-4. After I got married, my wife and I, being the studious and honest citizens that we are, updated our W-4s from single to married. Realizing that this would probably decrease our withholdings, I wanted to make sure we still had enough taken out so we wouldn't end up with a nasty tax bill come April. So I had both of us minimize our allowances to zero. Little did I know...apparently zeroing out your allowances doesn't do nearly enough to increase your withholdings...not by a long shot. Even after itemizing our deductions to the maximum amount allowed by the IRS, we still owe nearly $4000! WTF? After doing some research, I found out that apparently withholding rates escalate for married couples well beyond those who are single (even more than I had presumed), and that you need to accomodate for this by requesting additional amounts be withheld...OR, we can change our status on the W-4 back to single (yes, apparently you CAN do that ) to futher increase our withholdings. Anybody else get caught off guard by this? This happened to us. First we zeroed our allowances and that was enough for a couple years. Then we had a year like you where we owed big, and we began taking out additional money. It's all a big guessing game. You want to have them take out enough so that you don't owe big, but not too much because if you're getting a big refund then essentially you're loaning the government money during the year and they're getting the benefit of any potential investment interest instead of you. Link to comment Share on other sites More sharing options...
AzSkinsFan63 Posted February 21, 2008 Share Posted February 21, 2008 Did you get hit with the AMT?? I am finding it hard to believe you owe $4,000.00 with W-4's having zero exemptions when you could of and should have claimed 2 (1 each) and married status. Link to comment Share on other sites More sharing options...
skinstzar Posted February 21, 2008 Share Posted February 21, 2008 It even is deductible It does sound like he's screwing up somewhere. You know it does sound that way and I have to admit I was skeptical the first year we did it. The guy has been a CPA for 30 years. He is a former employee of the IRS. He does corporate and personal taxes. In his 30+ years doing taxes he has been audited less than 5 times. Only one of those held up and it wasn't even for the full amount the IRS was after. I have at least 10 friends and associates that use him as well and we all trust him 100%. The first time I met with him I came out and told him I had some concerns. He said everyone does. The problem is that the IRS code is so extensive and so complex that you have to really be a CPA to understand it all. He said the majority of Americans grossly overpay and that the IRS doesn't really have checks and balances to stop them. There are so many things that reduce your Total Taxable Income it is mind boggling. As part of the fee for his services he garauntees to represent you should you be audited, after all he does put his name on your returns as the preparer. His process takes about an hour and he probes you to find out what money you spend. You'd be amazed at what is deductible. Link to comment Share on other sites More sharing options...
techboy Posted February 21, 2008 Share Posted February 21, 2008 My father deals with this by making estimated payments every quarter. Personally, I like owing, because it means that rather than me giving the feds an interest free loan for a year, they gave me one. Penalties aren't a problem if you don't underpay by more than 10%. You can also avoid a penalty if you ensure that you pay at least as much as you did in the previous, non-penalty year. Link to comment Share on other sites More sharing options...
pjfootballer Posted February 21, 2008 Share Posted February 21, 2008 We file joint but claim zero single on our W-4. We'll get about 5K back this year. Link to comment Share on other sites More sharing options...
dwbiggs Posted February 21, 2008 Share Posted February 21, 2008 Dude you're doing your taxes all wrong. My wife and I filed Jointly, we claim little to no allowances and we are getting back 16K. Get an accountant. Best money I ever spent. Thats unreal! What are some of the heavy hitter deductions you have? I assume you have no kids either? Can't imagine there being that many deductions you could claim. Link to comment Share on other sites More sharing options...
portisizzle Posted February 21, 2008 Share Posted February 21, 2008 YYou'd be amazed at what is deductible. Try me. Link to comment Share on other sites More sharing options...
Zguy28 Posted February 21, 2008 Share Posted February 21, 2008 I claim 5 and Married on my W4. I'm getting a $3000 back from the feds and $1500 from MD. Link to comment Share on other sites More sharing options...
Major Harris Posted February 21, 2008 Share Posted February 21, 2008 i claim 0. i have a wife and 2 kids. we got about 5700.00 back. to those of you wisely saying i'm stupid as i'm basically loaning the gov't. money, you're right. but i'm protecting myself from me. that extra 400-500 a mo./ or whatever, wouldn't be invested. i'd spend less wisely. Link to comment Share on other sites More sharing options...
Tastes Like Chicken Posted February 21, 2008 Share Posted February 21, 2008 OP do you own or rent, and what are the terms of your mortgage(s) if applicable? Link to comment Share on other sites More sharing options...
dwbiggs Posted February 21, 2008 Share Posted February 21, 2008 claim 5 and Married on my W4. I'm getting a $3000 back from the feds and $1500 from MD. How do you do it? I claimed 5 and owed 3000.00 last year. Married with kid. Link to comment Share on other sites More sharing options...
Zguy28 Posted February 21, 2008 Share Posted February 21, 2008 How do you do it? I claimed 5 and owed 3000.00 last year. Married with kid. I have three kids = 3 child tax credits own house my deductions are about 20k taxable income is less than 50k. Link to comment Share on other sites More sharing options...
dwbiggs Posted February 21, 2008 Share Posted February 21, 2008 Quote:Originally Posted by dwbiggs How do you do it? I claimed 5 and owed 3000.00 last year. Married with kid. I have three kids = 3 child tax credits own house my deductions are about 20k taxable income is less than 50k. OK...comprende now. Link to comment Share on other sites More sharing options...
skinstzar Posted February 21, 2008 Share Posted February 21, 2008 Try me. I got married in 07. At our wedding we invited 7 people who are strictly business associates, we don't hang out with them outside of work. They were obligated invites you might say. "Our guy" believes these to be deductible because they are business related. We spent a total of 250 dollars per person at our wedding. That right there is 1750 dollars in deduction. I'm required to wear a certain standard of dress at my job. This standard of dress requires dry cleaning. I do about 60 dollars a month. That is 720.00 My wife works for a cable network, she has to actually watch tv to do her job. So our cable bill becomes deductible. I have a job in the golf industry so my golfing expenses are job related. IE tax deductible. Link to comment Share on other sites More sharing options...
skinstzar Posted February 21, 2008 Share Posted February 21, 2008 i claim 0.i have a wife and 2 kids. we got about 5700.00 back. to those of you wisely saying i'm stupid as i'm basically loaning the gov't. money, you're right. but i'm protecting myself from me. that extra 400-500 a mo./ or whatever, wouldn't be invested. i'd spend less wisely. This is my philosophy as well. My accountant told me to bring him my forms and we would adjust accordingly to get more money each month. I said no thanks. I get plenty each month. If I had more I would waste it. I like getting the big lump sum at the end of the year. Link to comment Share on other sites More sharing options...
Zguy28 Posted February 21, 2008 Share Posted February 21, 2008 i claim 0.i have a wife and 2 kids. we got about 5700.00 back. to those of you wisely saying i'm stupid as i'm basically loaning the gov't. money, you're right. but i'm protecting myself from me. that extra 400-500 a mo./ or whatever, wouldn't be invested. i'd spend less wisely. This is my philosophy as well. My accountant told me to bring him my forms and we would adjust accordingly to get more money each month. I said no thanks. I get plenty each month. If I had more I would waste it. I like getting the big lump sum at the end of the year. Do you guys have direct deposit? If yes, then a lot of them can split it up. Have some go into a savings, or at least adjust and max out your retirement with the extra. Link to comment Share on other sites More sharing options...
jaxskins Posted February 21, 2008 Share Posted February 21, 2008 I filled jointly as well and recieved 1200.00+ back W4 - I claim 5 1 child 1 stay at home wife taking care of child 1 home (interest is deductable) I don't get state returns because Florida doesn't have a state income tax. Obviously your doing something wrong if you claim 1 or 0 you should be getting back money not owing. Before you go writing a check to the IRS better go have your taxes done by a proffessional. Link to comment Share on other sites More sharing options...
McMetal Posted February 21, 2008 Share Posted February 21, 2008 We got hosed our first few years, but you make it all back when you A) buy a house and start having kids. Then the breaks are more in your favor. My wife quit working last year so I am curious to see what the upshot is come tax time this year... Link to comment Share on other sites More sharing options...
RememberOsaka Posted February 21, 2008 Share Posted February 21, 2008 OP do you own or rent, and what are the terms of your mortgage(s) if applicable? That was my first question after reading the original post. My guess is that he is a renter with no mortgage deduction. A great reason to buy a house! Link to comment Share on other sites More sharing options...
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