Tax question about the amount I owe

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atl2005
Posts: 471
Joined: Wed May 15, 2013 4:34 pm

Tax question about the amount I owe

Post by atl2005 »

I have a tax question concerning my wife and my taxes for this year. We have both filed married filing jointly this year and maxed our 401k/simple IRAs for the year yet we still owe almost 5k in federal taxes. Does this seem right for the this type of filing? Our AGI is about 145k for the year, so either this type of filing doesn't take out enough federal taxes or the loss of the extra pre-tax deduction from the Simple IRA is the main reason?
brawlrats
Posts: 49
Joined: Thu Dec 02, 2021 1:06 pm

Re: Tax question about the amount I owe

Post by brawlrats »

If you selected married filing jointly on your W-4s you will usually be under withheld. When the IRS’s withholding calculator comes back online, you should run through it and adjust your withholdings.

https://www.irs.gov/individuals/tax-wit ... -estimator
pizzy
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Joined: Tue Jun 02, 2020 6:59 pm

Re: Tax question about the amount I owe

Post by pizzy »

What was your total withholding dollar amount?
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Topic Author
atl2005
Posts: 471
Joined: Wed May 15, 2013 4:34 pm

Re: Tax question about the amount I owe

Post by atl2005 »

pizzy wrote: Thu Jan 13, 2022 8:23 pm What was your total withholding dollar amount?
Our total federal withholding was about 13500 I don't have the exact number with me. What's strange is we both file the same married filing jointly with 0 deductions. I make about 25k more and we paid almost the exact same amount in federal tax for the year. I maxed a 401k and she maxes the simple IRA but I would have thought I would have paid several thousand more in than my wife.
secondcor521
Posts: 394
Joined: Wed Sep 10, 2014 4:11 pm

Re: Tax question about the amount I owe

Post by secondcor521 »

It's hard to say without looking at the whole picture. The amount owing is the bottom line number after a bunch of other numbers and math, so changes in any of the previous numbers can result in a change to the bottom line.

What might be helpful is to get out your previous tax return and this tax return and compare them side by side. Walk down the numbers and when you find a pair where there is a significant difference, then dig into why.

If you do that and then come back and say that your withholding dropped a bunch from 2020 to 2021, or your income went up a lot, or you received a credit last year that you didn't this year (or whatever you discover as the significant differences) then people here can probably comment in a more helpful manner as to why that difference may exist.
soxfan10
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Joined: Wed Jan 21, 2015 10:38 pm

Re: Tax question about the amount I owe

Post by soxfan10 »

As mentioned above, if both spouses of a married couple select married, 0, they will almost always be underwithheld. The withholding tables assume no other income for the couple so each employer is wtihholding very little tax. 401k should be accounted for before the withholding (i.e., doesnt show up as taxable wages for withholding purposes). I believe the same is the case for a simple IRA.
Katietsu
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Joined: Sun Sep 22, 2013 1:48 am

Re: Tax question about the amount I owe

Post by Katietsu »

Did you follow the instructions on the W-4 in Step 2?

If you skip Step 2, the withholding is done assuming that you spouse does not work. But since both you and your spouse work, you need to complete Step 2.
MrJedi
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Joined: Wed May 06, 2020 11:42 am

Re: Tax question about the amount I owe

Post by MrJedi »

Sounds like you didn't do W-4's right. I don't like the way it is setup and many people mess it up, so this is not uncommon.
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arcticpineapplecorp.
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Re: Tax question about the amount I owe

Post by arcticpineapplecorp. »

plug in your info here and see what you get in terms of tax calculator:
https://engaging-data.com/tax-brackets/

the specific example is $145k MFJ for 2021:

https://engaging-data.com/tax-brackets/ ... 000&cg=NaN

shows income tax is $18,024. If you paid $13,500 in withheld taxes, that would have left $4524 in taxes owed (plus penalties for underpayment of taxes).

if $145k is agi, that's before standard deduction, but after the 401k contributions, right?

Or are you saying the $145k is before the 401k contributions?
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SnowBog
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Re: Tax question about the amount I owe

Post by SnowBog »

soxfan10 wrote: Thu Jan 13, 2022 11:51 pm As mentioned above, if both spouses of a married couple select married, 0, they will almost always be underwithheld. The withholding tables assume no other income for the couple so each employer is wtihholding very little tax. 401k should be accounted for before the withholding (i.e., doesnt show up as taxable wages for withholding purposes). I believe the same is the case for a simple IRA.
+1

Took me a few years to figure this out, but it's exactly correct.

The "good news" is the new withholding form - if used properly, helps get a lot closer than the old forms did.
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