2009 taxes

[jIM_Ohio]

I am looking for some tax advice... if any of the tax specialists on the board read this, feel free to comment or send me an email.

I use turbo tax, and am beginning to question that logic

In 2008 we received an $1800 refund in part because I did not plan on getting child tax credits.

According to 2009 taxes, we owe $2600+ which is a $4400 swing in taxes. Is this part of the stimulus?

I am trying to find a way to compare returns line for line in TT, but the software has not shown me the 2009 return as I have not paid for it yet.

I see a $4000 reduction in the "taxes paid" section of TT, but it does not let me see the details of what was included in 2008 and the same lines for 2009. I have my 2008 return in front of me, and the line on the TT summary is not actually an entry anywhere on tax form (looked already) to try and do math on my own.

[creditcardfree]

I do know that the making work pay credit, $800 for filing joint, is added to taxes you had withheld from paychecks. Both of these show up in the Payment section on the 1040. Making work pay is on line 63 of the 1040. Additional Child Credit also shows up in the payments section,line 65, which you may qualify for depending on income.

I'm not familiar with Turbo Tax, so I can't give any advice there. I hope I helped in some way.

[zetta]

You need to compare apples to apples -- how similar are your AGI, withholdings, and deductions between the two years? Did you have a llot of medical deduction in 2008? Are you getting into an income level where the credits are phasing out?

[jIM_Ohio]

Zetta-
I cannot see return, but most numbers were very similar (as I entered them TT tells me how it compared to previous year)- gross income was about same
mortgage interest was within $100 of previous year...

I cannot see the 1040 yet (I need to pay to see it) and I either need to cave and pay $60 to TT, or decide to go into HR block and probably pay $100-$150 (I assume) to see it.

TT gives a federal summary and on income taxes paid, it shows I was $4000 more in 2008 than in 2009 (2008 was 11k and 2009 was 7k). If it turned out Obama's stimulus was the reason for me owing $2600 this year, he better hope he does not drive by a grassy knoll anytime soon, and whoever believes he would not raise taxes on anyone earning under $250k needs to know he LIED thru his teeth.

I am so pissed right now I can barely think straight

[kv968]

Since you used Turbo Tax last year, did you by chance maybe use something by them to reduce your withholdings so you wouldn't get so much back this year? Since you try to keep yourself in such a low tax bracket maybe the withholding's change, if there was any, was too much?

[creditcardfree]

Another idea...use another tax program to see if you get the same results. I used taxact.com and had good results. You can't see the form until you pay, but it is less expensive. At the very least fill it all out to see if the results are the same, for free. It could be a math issue. I actually had it happen one year. I can't remember if it was Turbo Tax or HR Block's online site.

Or go print off the 1040 form from the IRS website and start plugging in numbers. Use last year's copy to see what line items you typically fill in. You'll need to pull up the instructions too, but don't print that off, it is a huge document. You can keep it up on your computer as a pdf file.

[kork13]

kind of an odd idea, but what if you plugged in all of your numbers from last year? taxes haven't changed too much over the last year... if your AGI is similar this year, putting in last year's numbers and comparing it to what you're getting with this year's numbers might be telling.

[jIM_Ohio]

kind of an odd idea, but what if you plugged in all of your numbers from last year? taxes haven't changed too much over the last year... if your AGI is similar this year, putting in last year's numbers and comparing it to what you're getting with this year's numbers might be telling.

I will enter last year's numbers in and see what gives...
I am guessing the stimulus was based on allowances, and because I claim 14 to withhold not much on federal side, it screwed me when they did the stimulus.

I will be writing my senators and congress people on what an anti stimulus is. Dumba$$es. I now need to withhold another $250 per month and stop spending enough to find $2600 to pay the government. Two vacations are being cancelled too. Stimulus my a$$.

[wnlbutterfly]

First off, you aren't the only one that is seeing this kind of situation due to the stimulus. When they start changing the withholding tables at your place of employment, it makes it really hard to plan ahead.

I would say most likely, thanks to the change in the withholding table this year (so that you were getting this wonderful stimulus cash during the year to boost the economy), you had $4k LESS withheld. If you HAD paid that in you would have been looking at a refund around $1,400, pretty close to last year.

You already know this, but I do agree that is what happened. You need to fill out a new W-4 for work. You can set up payments with IRS if you need to.

I tried to tell everyone I knew about this possibility, and they (powers that be) even mentioned it was a small "problem" that it could happen to tax payers, but they never really got the word out.

Try to explain to people (I do taxes), that even though they are getting this "Make Work Pay" credit, why they have a smaller refund.

[jIM_Ohio]

One other change is the HSA contributions according to W-2 were 100% from employer, and that is not correct (most were mine).

The HSA changed the amount owed from $2600 to $1900.
some other deductions took it down to $1700.

[creditcardfree]

One other change is the HSA contributions according to W-2 were 100% from employer, and that is not correct (most were mine).

The HSA changed the amount owed from $2600 to $1900.
some other deductions took it down to $1700.

Ugh! Do you need to have your employer correct your W2 before you file?

[MonkeyMama]

Ugh! Do you need to have your employer correct your W2 before you file?

Agreed.

This is not 100% a stimulus issue. Sounds like a W-4/employer issues. If you did not qualify for "making work pay" credit, at most you could have been under-withheld was $1600 ($800 per employer). I am assuming you qualified though, and that would only account for a possible $800 under-withholding.

[jIM_Ohio]

Agreed.

This is not 100% a stimulus issue. Sounds like a W-4/employer issues. If you did not qualify for "making work pay" credit, at most you could have been under-withheld was $1600 ($800 per employer). I am assuming you qualified though, and that would only account for a possible $800 under-withholding.

$1000 less was withheld this year compared to last.

In addition the HSA was tagged differently on W-2 in 2009 than in 2008, causing TT to change how it deducted it on return.

Monkey Mama- can you give me a W-4 tutorial on how to take $40,000 of schedule A deductions and make sure I am not getting a large refund?

I claimed 14 allowances and it appears those allowances made the making work pay credit withhold more money?

My general payroll tax plan would be to break even on tax refund without any tax credits (meaning the $2000 we get for child tax credits is the "buffer" between the changing tax code year over year. For example last year the refund was $1800, we would have owed money ($200) if the tax credits did not exist. I am OK with that.


In addition, are employer HSA's and HDHPs treated differently on the 1040 than if the HSA was something a retiree purchased on their own?

In 2008 I had to manually enter in a few HSA related things to TT and I saw its effect on refund the moment I input it (reduced taxable income). In 2009 the HSA was listed on my W-2 as "employer contributions" when I know $4400 of the contribution was mine and $1500 was employers (but TT interpreted it as $5900 was all employer).

THX!

[MonkeyMama]

$1000 less was withheld this year compared to last.

In addition the HSA was tagged differently on W-2 in 2009 than in 2008, causing TT to change how it deducted it on return.

Monkey Mama- can you give me a W-4 tutorial on how to take $40,000 of schedule A deductions and make sure I am not getting a large refund?

I claimed 14 allowances and it appears those allowances made the making work pay credit withhold more money?

My general payroll tax plan would be to break even on tax refund without any tax credits (meaning the $2000 we get for child tax credits is the "buffer" between the changing tax code year over year. For example last year the refund was $1800, we would have owed money ($200) if the tax credits did not exist. I am OK with that.


In addition, are employer HSA's and HDHPs treated differently on the 1040 than if the HSA was something a retiree purchased on their own?

In 2008 I had to manually enter in a few HSA related things to TT and I saw its effect on refund the moment I input it (reduced taxable income). In 2009 the HSA was listed on my W-2 as "employer contributions" when I know $4400 of the contribution was mine and $1500 was employers (but TT interpreted it as $5900 was all employer).

THX!

1 - Simplified way to determine allowances. Total deductions, divided by exemption amount ($3650 for now). 40000/3650 = 11. Add 1 deduction for each exemption reported on your tax return (4 people) = 15. I would think 14 is reasonable.

Your withholding choices have nothing to do with the making work pay credit. I think this year, the withholding is reduced $600-ish per married person. So, with 2-incomes, this means too much is reduced, for most working couples. ($1200 reduction in tax withholding for average couple, though credit is only $800). The problem is there is nowhere to mark on your W-4 whether you have a working spouse or what their income is, etc.

Anyway, 14 exemptions seems reasonable. I am wondering if you claimed 14 and your wife claimed 1 or 2. This would cause a problem. SHould be 14, combined. THat being said, if you are subject to phase-outs, etc., this could also reduce your "true deductions."

If your tax rate is 25%, in general, reducing 1 exemption on your W-4, should net you about $900. (one $3650 exemption x 25% = 912.50). Maybe, bring your exemptions down to 10? It is not an exact science, at all. Employers use different software and withholding tables, all the time. This is why I recommend starting with where you are at now (14), and working down from there.

2 - Employer HSA contributions are a tax-free benefit.

Individual contributions to a HSA (privately) are tax-deductible - on the 1040 form.

What is sticky is if you contribute HSA dollars, pre-tax. Your income on your W-2 is reduced by this amount (sort of like a 401k). It is correct to report it as an "employer benefit" since you already got the tax deduction, and can not deduct it on your tax return, again. They report all pre-tax employer contributions, and employer contributions, the same. The only reason it is really a separate item on your W-2, at all, is so you can enter it into TT and make sure your total contributions (self and employer) do not exceed the allowed maximum contribution by law.

[jIM_Ohio]

What is sticky is if you contribute HSA dollars, pre-tax. Your income on your W-2 is reduced by this amount (sort of like a 401k). It is correct to report it as an "employer benefit" since you already got the tax deduction, and can not deduct it on your tax return, again.

How can I be sure it was not taxed the first time.

I agree no double tax benefit, I want to make sure I received a single tax benefit. The W-2 are not consistent, so either I received a bad refund in 2008, or the W-2 is wrong in 2009.