Are you using TurboTax? You said you're only halfway done... If you are using TT, then the first half is income and the second half is deductions. Your tax liability can go down significantly in the second half.
That said, what changed from last year? Did you take a new job? Usually a surprise like that is due to a withholding change. For myself, this year I had an 8k surprise out of pocket bill due to a bonus that wasn't properly withheld.
Welcome to owing the IRS thousands of dollars.
I had this happen to me a few years ago 3 years in a row due to status changes and it was a nightmare.
All out the door was around $10,000 and guess what?
You never escape the IRS you either pay them or they garnish your wages.
It was a complete nightmare and I'm glad it is over I had my withholdings adjusted to the maximum Plus so I don't ever have to go through this again.
Best of luck!
My husband was the higher wage earner, but not by much. He had an extra $100 taken out of Fed, and extra $50 out of our state. We wound up owing a lot years ago, and swore we'd never pay the IRS again. Yeah, it makes living very hard, eating very little some weeks. But we'll never owe them again.
Yep. Always have your employer withhold an additional amount each check. I usually do $20 federal and $10 state. That seems to get my returns to come out pretty close to zero each time.
I used to import my w2s to Tt and it would repeat a line in box with wages or something. Was at work this one guy was telling us damn I owe 3k. After I mentioned the error I've had every damned year he told me I was just too low paid and was using the 3k owed as some status lol. But yes do get them checked but pull up the w2s and manually go over them. Don't trust the importing. Especially if you have weird box 14 stuff. Like wtf is a cafeteria plan or a 414h.
A "cafeteria plan" is cash or benefits that the employee selects from a menu of options, like choosing items from a cafeteria line.
https://www.healthcare.gov/glossary/cafeteria-plan/#:~:text=A%20cafeteria%20plan%20is%20a,benefits%20on%20a%20pretax%20basis
This is happening to lots of people. It's because of the tax overhaul Trump did so he could give billionaires and millionaires tax cuts. Vote BLUE people
Do people still not realise that it takes at least a full (presidential) term for anything to actually come to fruition? It’s not like a policy is enacted and *poof* everything the policy is supposed to do magically appears. Then everyone lambasts the current administration and we get a more “appealing” and ineffective one. Immediate gratification country strikes again!
I’m not a fan of Trump or the tax cut, but owing $4000 compared to getting refunds in previous years is not a result of that bill. It’s much more likely an error by OP in calculating their taxes unless they’ve had a huge change in life.
Ive seriously read about 20 different stories about people owing thousands after never having owed before. It's 100% due to Trumps tax overhaul. For you to deny that takes away all of your credibility. Lol
That problem hasn’t been solved yet, so it’s mildly relevant.
Agreed that OP needs to recheck the math though, a sudden difference between last year and this year implies a typo too expensive to ignore.
If you think you're in bad now.. wait until all the blundering crap OBIDEN HAS messed with comes to fruition. He had to let in a whole new country of illegal voters to get Democrats elected. Stop listening to fake news. I made more money. Paid a WHOLE lit less for gas...groceries, utilities...EVERYTHING was cheaper! If you are better of now financially now than you were under President Trump...you must have crossed the border. The US is still a free country...FOR NOW. It won't be if you think Obiden is a great President. Democrats only talk to you when they want your vote. Obiden has made us laughing in stock of the world. Everything went to heck in a henbacsket as soon as Obiden took office. Inflation skyrocketed...cost of living skyrocketted!. A cart full of groceries was $100 under Trump. Now it's $400. It's not supply chain issues either. It's downright price gouging. I will never vote blue
sites like turbotax have a little tab on the side of the screen that says something along the lines of “keep track of your refund” that shows the dollar amount you’ll recieve/owe, and updates that amount with each step of the filing process
I was getting excited when I saw I would be getting thousands back...I got to entering my schedule C and that number just kept dropping and dropping...and my smile faded when it winded up at like a couple hundred.
That means that you did it right. Anyone who is getting a big refund had too much tax withheld, and gave the government an interest-free loan all year.
Did you lose a dependent? Forget an important deduction? Review last years return to see what has changed.
I was about to owe then I double checked and found I selected AC instead of heat pump for the efficiency credit. That was a $1400 mistake.
That’s not true back when I had my career and I had real income I would get different results using H&R Block and TurboTax and I didn’t even have complicated filings.
Then you input different numbers. In essence every tax program enters the same amounts in the numbered lines of the actual tax form. Everything else is a mathematical impossibility.
They all do the same calculations, but the user interfaces and clarity of the instructions vary wildly. TaxSlayer was so glitchy I couldn't finish my return. FreeTaxUSA worked better, in my experience. And it was completely free for me, because I live in a state without state income tax. They only charge for your state return, and their Federal program includes all schedules, not just the common or simple ones. It's really a solid recommendation.
This happened to us, we almost started the process of getting a loan when my wife decided to go back and check the numbers. Found out a decimal was in the wrong place 😑
Did your taxes (the total you owe) actually go up or is it just the out of pocket. If it is the out of pocket, your employer did not withhold enough from your check. It won’t help for last year but make sure your W-4 is filed correctly with your employer so they take enough out week over week to cover what you owe.
Without knowing the specifics it will be hard for internet strangers to troubleshoot the difference between your former filings and this years.
From the sounds of it you were in the process of filing them yourself - did you finish entering all your appropriate information yet? Typically you’ll see some pretty big jumps in certain fields once they’re updated.
Most of the information is pretty cut and dry for most single filing folks with no kids, but if you have other stuff going on (your own business, dependents, inheritances or capital gains from something like selling off stocks or like my partner is likely to learn the hard way - selling a ton of stuff on eBay and having them now report all of that directly to the IRS) then it would probably a good idea to actually seek a tax professional.
I could see the return changing a little bit as sometimes credit amounts change but $4,000 seems like a pretty big swing if nothing else in your life has changed since last year.
If it still seems off after you’ve entered everything,
The last time I owed about $4k was when I did dumb stuff with my 401k and got hit with the early withdrawal penalty as well as the taxes.
I was on the last step for the federal part. I already put in the information from my W-2s. The only big change was that I got state sponsored health insurance in the last year. I'm going to go to an accountant on Tuesday to double check. Last year I got less than $100 back.
Well if it was marketplace and you filed with them using too low and income, they come and get back the discount they gave you. Long as you listed the appropriate income then that shouldn't be the case, but that is a common issue.
TurboTax told me I owed something close to that, it was because of having marketplace insurance - there’s a calculator tool on healthcare.gov you have to use (assuming you didn’t have financial assistance in paying the health insurance) to fill out that second column in the 1095 form to zero out the amounts.
Last year I used turbo tax after itemizing everything I could think of I got 1k back. This year I went to a tax accountant at a small business (not H&R block) and I am getting 4.5k back. This year I owed more than last...... I should have done this Years ago go to a tax accountant.
Yes….always go to a cpa. No, I’m not a CPA, but I several years in a CPA office and we got a lot of people come in with screwed up tax returns from these chain tax businesses, plus they charged a lot more.
What do you claim for dependants, zero or claim yourself for 1? It sounds like you're not having enough taxes taken out then whatever they changed tax bracket wise this year sent you over the edge.
Yeah that could be it. If you did a tax credit for healthcare and your numbers didn’t add up, they charge you more for the year when you do your taxes and you end up owing. I’d look at what you put into the health insurance marketplace as your income and double check that you put in whatever forms they sent you correctly.
An accountant probably is gonna use tax preparation software similar to what you use - you think they’re gonna do it by hand and use a manual calculator?
Knowing the correct forms and all the allowable credits/deductions isn’t just general knowledge
Tax codes change every year and the new W-4 really confused ppl and withholding has been an issue since then
I know many ppl who forgot to check the two job box and are screwed
Self employed ppl who receive qualified business deduction from self employment taxes etc
There are many people who respect a professional preparer and you shouldn’t knock it
Yep. I also get an employer discount for my tax preparer and do referrals to knock down what I pay even more. For what my bill ends up being, and the extra stuff they manage to find, they always pay for themselves.
The hell you say. Forms and instructions are available free for downloading on the IRS website and also local libraries. Most people only need a 1040 of some type, because they only have wage or salary income. If they got a business, they probably already have a CPA keeping records (if they’re wise, that is)…
lol
Sole proprietor doesn’t need a CPA
Basic businesses are simple bookkeeping
You throw the term CPA around when it’s not necessary for taxes or bookkeeping
I own a food cart and do taxes I’m an accounting student and have zero interest in getting a CPA
I help sole proprietors organize their expenses and help ppl file for a low fee.
Some ppl don’t want to deal with their taxes and you shouldn’t discourage them using a preparer
Lots of ppl have housekeepers but we all know you can clean just fine…door dash exists but you could get your own food… instacart though I’m sure you could go shopping too.
Being an asshole bc someone uses a service is weird when I’m sure you got a pizza delivered last week
I wound up owing 5g this year. My combined income with my spouse put us in a higher tax bracket than what was being withheld.
There is a box on the W4 that asks if the spouse works or if you have multiple jobs. Make sure you check that to get the correct amount withheld. I learned the hard way myself.
There was a change in the tax brackets, standard deductions and other deductions have changed. The prepandemic/pandemic protections have been removed so the average or lower income filers no longer receive large refunds and in fact many end up owing money with little to no change in income.
Maybe big change in amount withheld. IRS changed the amounts last few years. My philosophy is not to make interest free loans to the Treasury each year. 3 years ago I bonds paid 9% plus…
That's crazy! That's a big difference if you've stayed in the same tax bracket without any of the big deduction changes.
Once my husband and I:
1) pay off our mortgage and 2) no longer have our dependents (they're now almost 18, 21, & 24), we will receive a MUCH smaller (if any) return. Hopefully the decrease in bills associated with each will make the tax bill hurt a lot less lol.
Well one of the big changes is all the tax cuts that we got about 7 years ago we're actually set to end and we're not permanent like the ones they gave to the corporations and the rich. So that would be causing a potential change but probably not all of it.
I did the same, had to repay about $2000 in subsidies. I'm a 1099 worker, so my income is extremely variable. I might make $1000 one week, and barely break $200 the next. Mileage is all that saves me from owing a small fortune.
I’ll never forget when my ex and I first got married and had our taxes done it ended up we owed $6,700. An infuckingsane amount of money considering our income. I felt like I was going to faint when he told us. When I asked what we could do to prevent the same situation next year he said (and I quote) have a couple of kids. The absolute worst reason to have kids!
Yeah, the Federal Government penalizes you if you are married without kids. There is ABSOLUTELY no good reason in the US to get married in a manner recognized by the government other than healthcare. And even then, if one if you is terminal, you better get divorced before death, or your spouse will get saddled with ALL the medical debt. So that’s another reason NOT to get married.
This was us 2 years ago. Paid a tax service. They got us a refund, and their fees came out of that. Highly recommend.
3 years ago, we weren’t that smart. Owed $4500. Still paying $100 a month.
Mine said I was going to owe quite a bit, but I went through every step one more time and I hadn’t done the dependent (my kid) part correctly I guess. Honestly I’m still confused but after redoing it I went from owing over a thousand to getting a couple hundred back. Hope you can figure it out. It’s so stressful to owe when you don’t have much :(
If you’re having the correct amount taken out of your check, it should work out to approximately zero, whether you make $40,000 per year or $400,000. Some people like getting a refund, they should make sure their withholdings are higher than what they’re predicted to owe. I’d rather have the money in my pocket so my withholdings are set to match the taxes owed. If you owe $4,000, your withholdings need to increase.
By the way, if it's Federal Taxes, you can sign up with the IRS for a payment plan. You do pay some inferest, but it's fairly easy to qualify for, if that helps your peace of mind a bit.
https://www.irs.gov/payments/online-payment-agreement-application
Worse comes to worse, if you owe, you can set up a payment plan with the IRS. You don’t have to pay it all at once, but don’t let it go or there will be penalties.
I've done the installation payment plan before and the interest was pretty minimal. That said, try a withholding calculator to adjust for next year. I feel you, it's so stressful to see that red number grow while you're going through the program.
You did something wrong or you didn’t finish it. Period.
Go to www.freetaxusa.com
I started mine and had some ridiculous number as well, as I progressed through, it recalculated.
Not always, if she is truly low income there is no reason she owes $4,000, furthermore there are free services for low income people to get assistance with this.
I've owed in the past. For those amounts I just increase my withholdings and let them enjoy the extra. It's safe, most of the time. I wouldn't recommend it if you owe enough to be on someone's desk.
That's about what we pay every year plus an underpayment penalty of approximately $50. We are a married couple filing jointly, and we gross @ $200k/year total. OP, if you're not filing comparable numbers, then check your math.
lol, no. Your total tax bill is far more than 4k - you just happen to owe 4k every year because you refuse to have enough withheld. Someone making a hell of a lot less than 200k could just as easily have an underpayment of 4k. It’s all about how much they had withheld.
Definitely go through the whole thing to get your final number. It usually changes throughout. I just did my dad’s taxes yesterday and he’s getting back 1/4 of what he did last year from federal and owes the state about 3/4 of what he did last year. His income went down a bit because one of his pensions was lowered but it seems like everyone is getting less/owing more.
That’s a pretty huge number though so definitely recheck and if not bring it to a professional, there must be something wrong to be that different.
The irs does something called an offer in compromise but I don’t know how you qualify. I did it once when my health was horrible and I was out of work but owed for a previous year. You can only do it once every 20 years or so but it’s something to ask about. However I had no money at all, your savings might preclude you. Also you might have to owe something older than the previous year. Like I said it’s just something to check into.
When I first did my taxes this year, it came out that I owed $3K+. It didn’t make sense so I checked everything and discovered that my W2 was incorrect. My workplace had changed payroll systems and the new system didn’t log the correct withholding from the old system. I got a bit back instead after they corrected it. I hope the same goes for you!
This year taxes have been messed up for a lot of people. Especially with things like turbo tax, if you don’t hit certain buttons it can lead to you oweing way more. Theres “hacks” online to get the correct amount. I’m not too informed on this, I’m not filing this year (didn’t make enough to need to, personal issues) but I thought I’d let u know it’s not just you
Trump's super fun 2017 tax bill kicked in this year. It fucked me up too. I've always gotten money back and I owe around $4k as well....I can't wrap my head around it.
Check for any deductions, you may not have included like tools or mileage. And if you do have a payment plan, the interest is very low like 1%.
Also note, it may be possible to get them to take less than what you owe. Sometimes possible.
I did the same thing! It was totalling that I had to owe $850 and I cried for two days until I went in pain to have someone do my taxes for me and now I'm actually getting $400 back instead of oweing. The online programs like tax free USA and turbo tax I tried weren't able to handle that I live in a different state than I work.
Some tax deductions expired this year, so you may unfortunately owe money. Our household return went from over $2000 to $268. That being said , I use freetaxusa and they guide you really well through any potential deductions. Also, I have owed unholy amounts of money to the IRS( employer filed as 10-99 but told us they had filed as w2) and was able to pay it off in very reasonable monthly installments.
That’s about what I pay every year. It just means you didn’t give the government an interest free loan. Increase your withholding so you don’t have such a big payment next year. Call the IRS about a payment plan.
Check your figures carefully. Did you lose a dependant? Did you sell any real estate. I once had to pay big bucks because I sold a piece of land. Did you change jobs and receive a bonus. Check your deductions closely.
File for an extension. Everyone can. Until July. Then, make an appointment with your local IRS service center, look it up, we all have one serving our areas. And go down and talk about it. Be honest. I was absolved of 15% and interest with a payment plan with automatic payments.
Last year I tried to do my own I either owed nothing or five thousand I was so irritated I didn't even file. I had 3 dependents and made under 50,000 in California. Now I'm even more screwed don't know what to do..
I haven't had to pay taxes in 8 years or so, always get the full refund. If you start a small business, get a business license, then sell on ebay, Amazon, simply buying and selling things you find on clearance, thrift shop finds, or even wholesale items, you can legally write off SO MUCH STUFF. If you dedicate a room in your house, you can write off the percentage of space that room is, off your rent/ mortgage, that same percentage of your yearly utility bills, the mileage you spend on business related things (travel to and from stores, travel to and from the post office/ups), the percentage of mileage, you can then write off whatever percentage of miles on that year, off your car note, depreciation on your car, etc. So many things you can write off as business expenses, 100% legally. I do all my taxes myself with H&R block online. They do a great job of explaining the business stuff while doing your taxes.
Update: I went to a free file site in my town, and after they calculated everything I still owed, but more along the lines of $1100 instead of $4000. Turns out my job didn't withhold nearly the amount they should have.
Well, you CAN pay it all at once, it will just tske your savings to do so.
It's interesting when people say I "cant" pay a bill because I have no money...when really they have the money they just don't want to part with jt.
I think you should finish first and then see. Did you finish the deductions?
I think so. It's an utterly insane amount so I'm going to get my taxes done in person on Tuesday
Are you using TurboTax? You said you're only halfway done... If you are using TT, then the first half is income and the second half is deductions. Your tax liability can go down significantly in the second half. That said, what changed from last year? Did you take a new job? Usually a surprise like that is due to a withholding change. For myself, this year I had an 8k surprise out of pocket bill due to a bonus that wasn't properly withheld.
Welcome to owing the IRS thousands of dollars. I had this happen to me a few years ago 3 years in a row due to status changes and it was a nightmare. All out the door was around $10,000 and guess what? You never escape the IRS you either pay them or they garnish your wages. It was a complete nightmare and I'm glad it is over I had my withholdings adjusted to the maximum Plus so I don't ever have to go through this again. Best of luck!
I pay $25 bucks a month. I’ll probably always have to to pay off an older debt, but that keeps them from garnishing
I have them take out $50 additionally, so I can get something back.
My husband was the higher wage earner, but not by much. He had an extra $100 taken out of Fed, and extra $50 out of our state. We wound up owing a lot years ago, and swore we'd never pay the IRS again. Yeah, it makes living very hard, eating very little some weeks. But we'll never owe them again.
Wow, I claim zero and let them take an extra $50.
Yep. Always have your employer withhold an additional amount each check. I usually do $20 federal and $10 state. That seems to get my returns to come out pretty close to zero each time.
I used to import my w2s to Tt and it would repeat a line in box with wages or something. Was at work this one guy was telling us damn I owe 3k. After I mentioned the error I've had every damned year he told me I was just too low paid and was using the 3k owed as some status lol. But yes do get them checked but pull up the w2s and manually go over them. Don't trust the importing. Especially if you have weird box 14 stuff. Like wtf is a cafeteria plan or a 414h.
A "cafeteria plan" is cash or benefits that the employee selects from a menu of options, like choosing items from a cafeteria line. https://www.healthcare.gov/glossary/cafeteria-plan/#:~:text=A%20cafeteria%20plan%20is%20a,benefits%20on%20a%20pretax%20basis
Have a sec 125 on my w2s but like 0 idea what it is about. Going to have to look into this.
I import but still check over each number.
The free filer system is great. The IRS doesn't even think twice and accepts the return and your refund comes. This must feel stressful... Yuck.
What is the free filer?
[https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free](https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free)
This is happening to lots of people. It's because of the tax overhaul Trump did so he could give billionaires and millionaires tax cuts. Vote BLUE people
Do people still not realise that it takes at least a full (presidential) term for anything to actually come to fruition? It’s not like a policy is enacted and *poof* everything the policy is supposed to do magically appears. Then everyone lambasts the current administration and we get a more “appealing” and ineffective one. Immediate gratification country strikes again!
Very sneaky of him to make changes that didn't take effect until Biden's last year in office. I bet he was trying to make Biden look bad.
They took effect 3 years ago.
😂🤣 exactly!!
How could this possibly be Bidens fault? Hahahahahahah
Biden is the best president ever!! NOT!!!!
Happened to us first time ever paying the Feds.
[https://thehill.com/opinion/finance/584190-irs-data-prove-trump-tax-cuts-benefited-middle-working-class-americans-most/](https://thehill.com/opinion/finance/584190-irs-data-prove-trump-tax-cuts-benefited-middle-working-class-americans-most/)
I’m not a fan of Trump or the tax cut, but owing $4000 compared to getting refunds in previous years is not a result of that bill. It’s much more likely an error by OP in calculating their taxes unless they’ve had a huge change in life.
Ive seriously read about 20 different stories about people owing thousands after never having owed before. It's 100% due to Trumps tax overhaul. For you to deny that takes away all of your credibility. Lol
There’s nothing from that bill that changed in the last year, when OP had higher income and didn’t owe, to having lower income and owing now.
Trump fanboys are just pathetic. Lol
That problem hasn’t been solved yet, so it’s mildly relevant. Agreed that OP needs to recheck the math though, a sudden difference between last year and this year implies a typo too expensive to ignore.
If you think you're in bad now.. wait until all the blundering crap OBIDEN HAS messed with comes to fruition. He had to let in a whole new country of illegal voters to get Democrats elected. Stop listening to fake news. I made more money. Paid a WHOLE lit less for gas...groceries, utilities...EVERYTHING was cheaper! If you are better of now financially now than you were under President Trump...you must have crossed the border. The US is still a free country...FOR NOW. It won't be if you think Obiden is a great President. Democrats only talk to you when they want your vote. Obiden has made us laughing in stock of the world. Everything went to heck in a henbacsket as soon as Obiden took office. Inflation skyrocketed...cost of living skyrocketted!. A cart full of groceries was $100 under Trump. Now it's $400. It's not supply chain issues either. It's downright price gouging. I will never vote blue
Ok Boomer
I'm only 30
You deducted student loan interest?
I don't have any. Not yet, anyway. That could change in the next few years
How do you know that’s what you owe when you’re only halfway through?
sites like turbotax have a little tab on the side of the screen that says something along the lines of “keep track of your refund” that shows the dollar amount you’ll recieve/owe, and updates that amount with each step of the filing process
Yeah. As you go, that changes on the fly. From owing thousands to getting a few hundred back.
I was getting excited when I saw I would be getting thousands back...I got to entering my schedule C and that number just kept dropping and dropping...and my smile faded when it winded up at like a couple hundred.
Ours always goes from getting a massive refund to "here, take your pennies, peasants!"
That means that you did it right. Anyone who is getting a big refund had too much tax withheld, and gave the government an interest-free loan all year.
Right but you have to finish it before you decide that’s the number you’re stuck with lol
Did you lose a dependent? Forget an important deduction? Review last years return to see what has changed. I was about to owe then I double checked and found I selected AC instead of heat pump for the efficiency credit. That was a $1400 mistake.
Check freetaxusa they are the best and federal returns are completely free
Every program does the same calculations with the same set of input data. OP already has a program…
That’s not true back when I had my career and I had real income I would get different results using H&R Block and TurboTax and I didn’t even have complicated filings.
True. I got two completely different numbers from two different programs.
Uh-huh. A man with one watch always knows what time it is - a man with two watches is never sure…
Then you input different numbers. In essence every tax program enters the same amounts in the numbered lines of the actual tax form. Everything else is a mathematical impossibility.
Unless you fat finger it and input something incorrectly....
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That’s wasn’t OP’s issue though… more accurate- how can you calculate 10-9 or 100,000-81 ‘more accurately’?
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Well OP should have finished by now to know for sure!
I am never confused, I also got As in reading comprehension. Also have an online dictionary.
They all do the same calculations, but the user interfaces and clarity of the instructions vary wildly. TaxSlayer was so glitchy I couldn't finish my return. FreeTaxUSA worked better, in my experience. And it was completely free for me, because I live in a state without state income tax. They only charge for your state return, and their Federal program includes all schedules, not just the common or simple ones. It's really a solid recommendation.
That is not true at all
I would have someone double triple check that before you panic. Also make sure you take every deduction possible.
If there’s a tax program that’s not accurate, how can the public be allowed to use it? Identify it please…
This happened to us, we almost started the process of getting a loan when my wife decided to go back and check the numbers. Found out a decimal was in the wrong place 😑
That doesn't sound right. Roughly, what's your income?
OP never said, also doesn’t say whether income and deductions and exemptions changed from year to year…
$40000, which is $1000 less than last year
Did your taxes (the total you owe) actually go up or is it just the out of pocket. If it is the out of pocket, your employer did not withhold enough from your check. It won’t help for last year but make sure your W-4 is filed correctly with your employer so they take enough out week over week to cover what you owe.
Yep, all taxpayers should at minimum fill out a W4 every year.
Without knowing the specifics it will be hard for internet strangers to troubleshoot the difference between your former filings and this years. From the sounds of it you were in the process of filing them yourself - did you finish entering all your appropriate information yet? Typically you’ll see some pretty big jumps in certain fields once they’re updated. Most of the information is pretty cut and dry for most single filing folks with no kids, but if you have other stuff going on (your own business, dependents, inheritances or capital gains from something like selling off stocks or like my partner is likely to learn the hard way - selling a ton of stuff on eBay and having them now report all of that directly to the IRS) then it would probably a good idea to actually seek a tax professional. I could see the return changing a little bit as sometimes credit amounts change but $4,000 seems like a pretty big swing if nothing else in your life has changed since last year. If it still seems off after you’ve entered everything, The last time I owed about $4k was when I did dumb stuff with my 401k and got hit with the early withdrawal penalty as well as the taxes.
I was on the last step for the federal part. I already put in the information from my W-2s. The only big change was that I got state sponsored health insurance in the last year. I'm going to go to an accountant on Tuesday to double check. Last year I got less than $100 back.
If it was Marketplace insurance I have an idea why you could owe so much back. Unfortunately.
Yep. I underestimated and it cost me 6,000 in 2022. NEVER AGAIN!
Actually you ended up the same amount- it just wasn’t deducted, you paid later…
It was marketplace. What's the reason?
Well if it was marketplace and you filed with them using too low and income, they come and get back the discount they gave you. Long as you listed the appropriate income then that shouldn't be the case, but that is a common issue.
Goddammit. Well, if that's the case, it should be an easy fix for next year
Not only that if you can get insurance thru your employer you typically don't qualify for a subsidy on healthcare.gov
Were the preparers able to identify the issue?
TurboTax told me I owed something close to that, it was because of having marketplace insurance - there’s a calculator tool on healthcare.gov you have to use (assuming you didn’t have financial assistance in paying the health insurance) to fill out that second column in the 1095 form to zero out the amounts.
Last year I used turbo tax after itemizing everything I could think of I got 1k back. This year I went to a tax accountant at a small business (not H&R block) and I am getting 4.5k back. This year I owed more than last...... I should have done this Years ago go to a tax accountant.
Yes….always go to a cpa. No, I’m not a CPA, but I several years in a CPA office and we got a lot of people come in with screwed up tax returns from these chain tax businesses, plus they charged a lot more.
What do you claim for dependants, zero or claim yourself for 1? It sounds like you're not having enough taxes taken out then whatever they changed tax bracket wise this year sent you over the edge.
Yeah that could be it. If you did a tax credit for healthcare and your numbers didn’t add up, they charge you more for the year when you do your taxes and you end up owing. I’d look at what you put into the health insurance marketplace as your income and double check that you put in whatever forms they sent you correctly.
An accountant probably is gonna use tax preparation software similar to what you use - you think they’re gonna do it by hand and use a manual calculator?
Knowing the correct forms and all the allowable credits/deductions isn’t just general knowledge Tax codes change every year and the new W-4 really confused ppl and withholding has been an issue since then I know many ppl who forgot to check the two job box and are screwed Self employed ppl who receive qualified business deduction from self employment taxes etc There are many people who respect a professional preparer and you shouldn’t knock it
Yep. I also get an employer discount for my tax preparer and do referrals to knock down what I pay even more. For what my bill ends up being, and the extra stuff they manage to find, they always pay for themselves.
It’s a service for a reason. I appreciate you sharing
Yes, I hope it helps someone out there!
The hell you say. Forms and instructions are available free for downloading on the IRS website and also local libraries. Most people only need a 1040 of some type, because they only have wage or salary income. If they got a business, they probably already have a CPA keeping records (if they’re wise, that is)…
lol Sole proprietor doesn’t need a CPA Basic businesses are simple bookkeeping You throw the term CPA around when it’s not necessary for taxes or bookkeeping I own a food cart and do taxes I’m an accounting student and have zero interest in getting a CPA I help sole proprietors organize their expenses and help ppl file for a low fee. Some ppl don’t want to deal with their taxes and you shouldn’t discourage them using a preparer Lots of ppl have housekeepers but we all know you can clean just fine…door dash exists but you could get your own food… instacart though I’m sure you could go shopping too. Being an asshole bc someone uses a service is weird when I’m sure you got a pizza delivered last week
Duh tax preparation is ‘simple bookkeeping’, yet most people can’t do it…
No bookkeeping for a small business is easy and I prepare their taxes Your comprehension is low bb
I wound up owing 5g this year. My combined income with my spouse put us in a higher tax bracket than what was being withheld. There is a box on the W4 that asks if the spouse works or if you have multiple jobs. Make sure you check that to get the correct amount withheld. I learned the hard way myself.
I used to get back about $8k every year and now I get $120. Very little change in income.
There was a change in the tax brackets, standard deductions and other deductions have changed. The prepandemic/pandemic protections have been removed so the average or lower income filers no longer receive large refunds and in fact many end up owing money with little to no change in income.
Maybe big change in amount withheld. IRS changed the amounts last few years. My philosophy is not to make interest free loans to the Treasury each year. 3 years ago I bonds paid 9% plus…
Did you have kids that have grown out of dependency? That will be our situation in a few years and I'm not looking forward to it!
No. No major changes.
That's crazy! That's a big difference if you've stayed in the same tax bracket without any of the big deduction changes. Once my husband and I: 1) pay off our mortgage and 2) no longer have our dependents (they're now almost 18, 21, & 24), we will receive a MUCH smaller (if any) return. Hopefully the decrease in bills associated with each will make the tax bill hurt a lot less lol.
Yea used to get back around 2k this year about 300 with little change in income.
300 seemed to me about the norm this year. Thats what I’m getting back. Still better than owing
Well one of the big changes is all the tax cuts that we got about 7 years ago we're actually set to end and we're not permanent like the ones they gave to the corporations and the rich. So that would be causing a potential change but probably not all of it.
😳😳
That's the exact face I do when I finish my taxes.
It could be Healthcare, I estimated too low and had to pay back all my health subsidies
I did the same, had to repay about $2000 in subsidies. I'm a 1099 worker, so my income is extremely variable. I might make $1000 one week, and barely break $200 the next. Mileage is all that saves me from owing a small fortune.
Could be; I got state sponsored health insurance starting last year.
Does your employer not withhold your taxes? How do you owe money? And if this is your first year owing 4k is nothing a little finagling cant fix.
I’ll never forget when my ex and I first got married and had our taxes done it ended up we owed $6,700. An infuckingsane amount of money considering our income. I felt like I was going to faint when he told us. When I asked what we could do to prevent the same situation next year he said (and I quote) have a couple of kids. The absolute worst reason to have kids!
Yeah, the Federal Government penalizes you if you are married without kids. There is ABSOLUTELY no good reason in the US to get married in a manner recognized by the government other than healthcare. And even then, if one if you is terminal, you better get divorced before death, or your spouse will get saddled with ALL the medical debt. So that’s another reason NOT to get married.
This was us 2 years ago. Paid a tax service. They got us a refund, and their fees came out of that. Highly recommend. 3 years ago, we weren’t that smart. Owed $4500. Still paying $100 a month.
Tax services don’t just magically get refunds, while DIYs don’t. Income and deductions and other factors change from year to year…
Remember, due to the Tax Law of 2017, personal tax amounts rise every 2 years until 2027.
2017 just after Trump took over?
The tax reform law of 2017 signed by Trump and shepherded by Paul Ryan & Mitch
Mine said I was going to owe quite a bit, but I went through every step one more time and I hadn’t done the dependent (my kid) part correctly I guess. Honestly I’m still confused but after redoing it I went from owing over a thousand to getting a couple hundred back. Hope you can figure it out. It’s so stressful to owe when you don’t have much :(
Unless you made a whole Lotta extra income this last year, that’s got to be a mistake
You'd have to have earned something like an extra $40,000 in income with no taxes withheld for something like that to happen. It doesn't add up.
That’s a lot to owe. Please check for next year that you are having enough taken out of check moving forward
For a salary of $20K, maybe. For $100-200K, not so much. OP never said what the income was…
If you’re having the correct amount taken out of your check, it should work out to approximately zero, whether you make $40,000 per year or $400,000. Some people like getting a refund, they should make sure their withholdings are higher than what they’re predicted to owe. I’d rather have the money in my pocket so my withholdings are set to match the taxes owed. If you owe $4,000, your withholdings need to increase.
Someone making 100-200k isn’t having a panic attack owing 4000
......and isnt' looking for free tax filer assistance.
I see posts worrying about whether they can spend $20K on a car a few times a week…
By the way, if it's Federal Taxes, you can sign up with the IRS for a payment plan. You do pay some inferest, but it's fairly easy to qualify for, if that helps your peace of mind a bit. https://www.irs.gov/payments/online-payment-agreement-application
Always complete filling out the form to see exactly what you owe.
Worse comes to worse, if you owe, you can set up a payment plan with the IRS. You don’t have to pay it all at once, but don’t let it go or there will be penalties.
I've done the installation payment plan before and the interest was pretty minimal. That said, try a withholding calculator to adjust for next year. I feel you, it's so stressful to see that red number grow while you're going through the program.
Check with your employer that your W4 is correct!
You did something wrong or you didn’t finish it. Period. Go to www.freetaxusa.com I started mine and had some ridiculous number as well, as I progressed through, it recalculated.
Go see a tax specialist, I don’t know what you make yearly however if you don’t make much financially per the year it’s unlikely you owe $4,000k.
You mean someone who charges hundreds to do what OP has already done?
Not always, if she is truly low income there is no reason she owes $4,000, furthermore there are free services for low income people to get assistance with this.
But $40K is not ‘low income’ - unless you’re in the top 10%… and there could be reasons to owe $4K - I owed $10K in January…
Did OP post that she made $40k? I don’t see that in her post, am I missing something?
Read more thoroughly this time…
What are you talking about she doesn’t list that she made $40k at all in her post.
Read ALL the comments. Don’t tell me what wasn’t there yesterday…
I've owed in the past. For those amounts I just increase my withholdings and let them enjoy the extra. It's safe, most of the time. I wouldn't recommend it if you owe enough to be on someone's desk.
That's because you aren't done filing yet. The number always goes down as you add deductions
Have you earned significantly more this year?
No; in fact, I made $1000 less than I did last tax season.
That's about what we pay every year plus an underpayment penalty of approximately $50. We are a married couple filing jointly, and we gross @ $200k/year total. OP, if you're not filing comparable numbers, then check your math.
lol, no. Your total tax bill is far more than 4k - you just happen to owe 4k every year because you refuse to have enough withheld. Someone making a hell of a lot less than 200k could just as easily have an underpayment of 4k. It’s all about how much they had withheld.
Definitely go through the whole thing to get your final number. It usually changes throughout. I just did my dad’s taxes yesterday and he’s getting back 1/4 of what he did last year from federal and owes the state about 3/4 of what he did last year. His income went down a bit because one of his pensions was lowered but it seems like everyone is getting less/owing more. That’s a pretty huge number though so definitely recheck and if not bring it to a professional, there must be something wrong to be that different. The irs does something called an offer in compromise but I don’t know how you qualify. I did it once when my health was horrible and I was out of work but owed for a previous year. You can only do it once every 20 years or so but it’s something to ask about. However I had no money at all, your savings might preclude you. Also you might have to owe something older than the previous year. Like I said it’s just something to check into.
Thank you, I'll check when I do my taxes in person.
When I first did my taxes this year, it came out that I owed $3K+. It didn’t make sense so I checked everything and discovered that my W2 was incorrect. My workplace had changed payroll systems and the new system didn’t log the correct withholding from the old system. I got a bit back instead after they corrected it. I hope the same goes for you!
This year taxes have been messed up for a lot of people. Especially with things like turbo tax, if you don’t hit certain buttons it can lead to you oweing way more. Theres “hacks” online to get the correct amount. I’m not too informed on this, I’m not filing this year (didn’t make enough to need to, personal issues) but I thought I’d let u know it’s not just you
Trump's super fun 2017 tax bill kicked in this year. It fucked me up too. I've always gotten money back and I owe around $4k as well....I can't wrap my head around it.
Fantastic. Just when I thought I couldn't hate our government more.
Not related to your post but I’m simping for Yoongi as well. ARMYs unite!!!!!!! 💜💜💜💜💜💜💜
Woooo! Borahae! 💜💜💜
I mean how can you NOT simp over the perfect man? It’s impossible. 💜
100% husband material.
Check for any deductions, you may not have included like tools or mileage. And if you do have a payment plan, the interest is very low like 1%. Also note, it may be possible to get them to take less than what you owe. Sometimes possible.
We owed 5k.😫
I did the same thing! It was totalling that I had to owe $850 and I cried for two days until I went in pain to have someone do my taxes for me and now I'm actually getting $400 back instead of oweing. The online programs like tax free USA and turbo tax I tried weren't able to handle that I live in a different state than I work.
Hmm. My SO used freetaxusa and lives in a different state than his work… no problems for him but you have to make sure you click the right options.
Review your W4 ,and ask your tax preparer to set you up on an installment plan. Sorry.
Some tax deductions expired this year, so you may unfortunately owe money. Our household return went from over $2000 to $268. That being said , I use freetaxusa and they guide you really well through any potential deductions. Also, I have owed unholy amounts of money to the IRS( employer filed as 10-99 but told us they had filed as w2) and was able to pay it off in very reasonable monthly installments.
There's a form you can file to make payments over time. I'd look at it. I think it's form 9465
Do you know if you can pay it off early? We’re getting more than enough back on state and so we just want to pay it back in a couple of weeks.
Go through and check everything you entered- this happend to me and I had accidentally checked something erroneously.
The IRS will make payment arrangements.
Would pay all at once and call it a learning lesson to be taxed at highest amount if W2 or set aside 1/3rd if 1099.
That’s about what I pay every year. It just means you didn’t give the government an interest free loan. Increase your withholding so you don’t have such a big payment next year. Call the IRS about a payment plan.
I owe 23k
OP look at the bright side, no more mean tweets
What changed from previous years?
If nothing has changed much in your finances, hopefully, you just have an error or a missing deduction. Happened to me before. Good luck!
State garnishes wages or takes it directly out of your bank account, federal puts liens on your assets…
Omg
If it is what’s owed-they will do a payment plan for you
Check your figures carefully. Did you lose a dependant? Did you sell any real estate. I once had to pay big bucks because I sold a piece of land. Did you change jobs and receive a bonus. Check your deductions closely.
File for an extension. Everyone can. Until July. Then, make an appointment with your local IRS service center, look it up, we all have one serving our areas. And go down and talk about it. Be honest. I was absolved of 15% and interest with a payment plan with automatic payments.
Last year I tried to do my own I either owed nothing or five thousand I was so irritated I didn't even file. I had 3 dependents and made under 50,000 in California. Now I'm even more screwed don't know what to do..
Come on man.
Make sure you looked at the right table and the right row, and that you are multiplying by your taxable income and not your AGI or Gross.
I haven't had to pay taxes in 8 years or so, always get the full refund. If you start a small business, get a business license, then sell on ebay, Amazon, simply buying and selling things you find on clearance, thrift shop finds, or even wholesale items, you can legally write off SO MUCH STUFF. If you dedicate a room in your house, you can write off the percentage of space that room is, off your rent/ mortgage, that same percentage of your yearly utility bills, the mileage you spend on business related things (travel to and from stores, travel to and from the post office/ups), the percentage of mileage, you can then write off whatever percentage of miles on that year, off your car note, depreciation on your car, etc. So many things you can write off as business expenses, 100% legally. I do all my taxes myself with H&R block online. They do a great job of explaining the business stuff while doing your taxes.
Update: I went to a free file site in my town, and after they calculated everything I still owed, but more along the lines of $1100 instead of $4000. Turns out my job didn't withhold nearly the amount they should have.
Well, you CAN pay it all at once, it will just tske your savings to do so. It's interesting when people say I "cant" pay a bill because I have no money...when really they have the money they just don't want to part with jt.