W-4 Advice?

by BASixxer on February 10th 2011, 5:55 pm

Ok, so every year, my wife seems to screw us over on Taxes. I do my taxes, and normally break even on the business and then get about $900 back from federal and $200 from state. However, when I add my wife (she only makes $20k a year, I make $50k), my taxes take a dump, and I end up getting back $300 federal and PAYING $870 to state. Add in all the tax credits and my student feeds, and we ended up with getting $1120 back from federal, and paying $870 to state. After the costs of Turbotax and efiling charges, I only get back about $100...

sounds peachy overall, just don't get why her income is making us take such a dump...

my theory is her W-4 is wrong. I made $47k taxable income (less 401k), and they took out 1177 in State taxes... she made $20k, and they only took out $200...

doesn't seem right... if anything, her not making as much would give us MORE back, not take an extra thousand...

I have no idea how she files, but something isn't right... I think right now she claims 0, I claim 2... no kids...

ideas?

by 07Shelby500 on February 10th 2011, 6:05 pm

It's your claiming 2 that's hurting u if your looking for a return at the end of the year. Otherwise your about even which is where you want to be.

by BASixxer on February 10th 2011, 7:22 pm

To me the refunds don't really matter... balanced is good... just don't understand why we have such a high return from federal and have to pay so much state...

by BMMC1 on February 10th 2011, 8:19 pm

The key and I posted it before... is to get as close to a $0 refund as possible. But McKay is right... Why are you claiming 2? That hurts you with no kiddos. She's claiming 0 is helping you more than anything. She's paying more out through out the year. Your state seems high... probably you're claiming 2.

There are way to many variables in taxes to answer your questions in general. But please don't disclose anymore info... this is a public forum...

The best thing to is consult a CPA. I always have a CPA do mine. But I have many many variables which I won't get into here. But for the cost of a CPA I've saved tons more... Tax laws change every year and for me it's worth it to pay someone that keeps up with those changes.

Here's a good program to use to estimate your taxes. While not exact, but will get you close. You can play with the figures to see what works best for you next year.
http://turbotax.intuit.com/tax-tools/calculators/taxcaster/

by BASixxer on February 10th 2011, 8:23 pm

Oh i know. The 2 claim was at the advice if a friend, and i recently changed it back to 1... will see how it goes...

by Guest on February 10th 2011, 10:35 pm

Just dont pay

by MrClark on February 11th 2011, 1:10 am

shodown wrote:Just dont pay

Agreed

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