Withholding Advice

[rduell]

I'm sort of freaking out here and need some advice.

I just ran my Quicken Tax Planner and it says we're going to owe $2278 to the government when we do our taxes!!! Now, I see a problem in the Tax Planner that I can't find out how to fix. For some reason it says that DH's next paycheck is due in August 2007! He gets paid weekly. This info is grayed out and I can't find where to change it. I don't now if that affects this or not.

I went to the IRS site and it says we'll owe about $700.

Toward the beginning of the year we increased our withholdings from 2 to 5 in DH's paycheck so that he was bringing home more money. Last year we ended up getting over $4,000 back. There are 7 of us total. Children's ages: 19, 18, 16, 14, and 13.

I went to Paycheck City and that tells me we should be claiming 10!!! What a difference! That's what it told me earlier this year when we were trying to figure out how much to increase our withholding by so we went half way to be 'safe' thinking we'd get a small refund and not have to pay in.

I claim 0 for my withholdings.

DH did make quite a bit more this year because of overtime. It will probably be just over $16,000 by the end of the year.

[rduell]

Re: Withholding Advice

I just redid the calculator on the IRS website and this is what it said:

Based on the information you previously entered, your anticipated income tax for 2006 is $1,469, and your projected withholding is $3,420. Your anticipated overpayment is $1,951

[ren]

Re: Withholding Advice

You know, for fairly simple withholdings (like mine -- single, no kids, no house), I think the IRS site is pretty dead on, but I'm willing to bet it misses some things on people with kids/houses/etc. Frankly, there's not a lot you can do between now and the end of the year (even if your husband 'corrects' his holdings, the next couple weeks won't make much of a difference), so you might just see what happens come tax time and adjust from there.

I know, you probably wanted a better answer than that, but it's the best I have. Anyone else want to give it a go?

[creditcardfree]

Re: Withholding Advice

I'm guessing that the irs website was a very close estimate. You did much better this year as far as withholding. You gave half as much to the government to hold for you! It still looks like you could adjust those withholdings up a couple more...maybe to 7 or 8 for 2007 and still not owe the government.

[vishenda]

Re: Withholding Advice

Most of the free software to guess at your tax refund is worth about what you paid for it! The number of allowances to claim is a game played by millions and still the best tool to "guess" ( and it is a guess) is the worksheet with the W-4. Your situation may have changed from last year if your 19 yr old is not going to college as he may drop off as a dependent. As each of your children age the credit that you have enjoyed come to an end. As they do you will need to increase your allowances to get the same refund. All of that said there are tons of other factors that could play a part in determining your potential refund. It may be time to engage a tax professional. Good luck.

[mbhunter]

Re: Withholding Advice

I don't get the title of the thread. It doesn't appear as if people are withholding advice.

But seriously, how much you prepay to Uncle Sam is a matter of taste. Personally, I like the cushion it provides. I could claim more exemptions, but if I'm wrong then I get hit.

[rduell]

Re: Withholding Advice

I don't get the title of the thread. It doesn't appear as if people are withholding advice.

But seriously, how much you prepay to Uncle Sam is a matter of taste. Personally, I like the cushion it provides. I could claim more exemptions, but if I'm wrong then I get hit.

LOL! I've been wanting to use that smilie for a while now. You finally gave me the opportunity.

I agree. I guess since this is the first time we've ever raised our withholding above 2, it scared me to see that we might owe. I think I've calmed down now and am ready to wait it out.

[Elgin526]

Re: Withholding Advice

If you're worried you may owe a large amount, start putting a little extra aside to help pay the tax bill if you get one. If you don't owe, or don't owe much, then use your extra savings to do something fun for the family, or use it to increase your overall savings.

[rduell]

Re: Withholding Advice

That is a good idea. We can always roll it into our emergency fund.

[boefixepa]

Re: Withholding Advice

Honestly I think you will be fine unless there is some other write off/ income you have not mentioned. I am single and with the right offs I get (house, donations) I can claim betwenn 4-6 without having to owe.

So at a minimum you can claim one for every person 6-7 depending on wether or not you can claim the 19 year old. Plus 1-2 more if you have mortgage interest you can write off.

So I don't think you will have to worry. Do your taxes as soon as you can and then yoy know before April 15th where you stand. I have a hard time understanding why people wait until the 15th to do their taxes...it's not like you have to pay them the second you do them...you can wait until the 15th. Personally Ii can't stand not knowing.