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ChickenCheeks7 OP t1_j69z8ki wrote

Reply to comment by Em_Adespoton in LPT Request: Why is my tax return so low? by ChickenCheeks7

I put $20 in the extra withheld on a W-4 so you’re saying that was about right to put?

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Em_Adespoton t1_j69zkwg wrote

Seems like it.

I generally get my company to do standard witholdings and then I donate to charity and top up my tax free savings, and so end up getting a nice chunk of money back each year. But that’s just money that really shouldn’t have been withheld in the first place.

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ChickenCheeks7 OP t1_j69zs92 wrote

Why would be different if I kept that $0. Would I end up owing money instead of getting more at the end of the year?

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Em_Adespoton t1_j6a09xu wrote

Yup. If you pay nothing up front, it’s up to you to hold back what you think you’ll need to pay at tax time.

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ChickenCheeks7 OP t1_j6a0ihg wrote

Oh okay I see. It’s more like you decide if you want your money during your paychecks and owe nothing at the end, or withhold more to get more of a refund. Is that kinda correct?

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Em_Adespoton t1_j6a1gj0 wrote

Yup. In low interest periods, there’s no difference. In high interest periods, it’s sometimes more profitable to keep the money yourself and collect interest on it.

But either way, you’re going to have to pay it, so don’t spend it.

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ChickenCheeks7 OP t1_j6a29lg wrote

Awesome! Thank you for the lesson it’s good to know all this! One more thing. I usually use turbo tax and I’m most certain I don’t owe the irs anything. But turbo says I owe them $79. Is that turbo tax’s fees and such or is that what I owe the irs?

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acgilmoregirl t1_j6b2h0l wrote

Use freetaxusa. They don’t charge for tax returns. Never pay to file your tax return unless you’re making a goodly amount of money or have a difficult situation.

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Em_Adespoton t1_j6acitx wrote

Best to ask someone who uses Quicken products in the US.

Thing is, it sounds like you’re not making enough money to be having to pay for tax returns; you should just be able to do the web-based free filing.

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UselessRube t1_j6olv52 wrote

It’s always in your best interest to get your money when you’re owed it. The goal is not getting a tax refund and also not owing any taxes.

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NofksgivnabtLIFE t1_j6mkptl wrote

This plus Tax breaks for the pleebs went away recently just not the tops break. Welcome to hell on earth.

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7lexliv7 t1_j6i8v7e wrote

If you elected to have $20 taken out of each paycheck in addition to the amount the W-4 calculation came up with then you played that very well.

If you hadn’t taken out that $20 a paycheck and if you’re paid each week you would be about $1000 short of the total tax amount you owe for 2022 and you would have to pay about $1000 by April 15

I find the “new” w-4 to be very confusing. I’m laughing at myself saying “new” as it’s like 4-5 years old now).

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ChickenCheeks7 OP t1_j6ie516 wrote

What was it like before?

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7lexliv7 t1_j6jppp5 wrote

You used to control your withholding by claiming allowances. It was just one number that you could adjust up or down to withhold less or more money (although you could also say withhold $x a paycheck in addition like you did with the $20)

Now it’s that full page - several sections. I guess it is better at estimating what you should withhold but more complicated.

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