How come people end up?

Question

end up pay the IRS whne it come to tax time instead of reciving money from them???

Answer 1

It depends on how much money the person makes. People have to pay taxes on any assets or extra money they make. Some people who make a certain amount of money (under the max you can make) don't have to pay extra money and they just receive it.

Answer 2

Some people don't have enough tax withheld from their paycheck. This may or may not result in a penalty for underpayment of estimated taxes.

Some people make their money from sources other than wages, such as the self-employed, and people who earn a large amount of interest and/or dividends. These people have to pay quarterly estimated tax payments to the IRS. The rules and the methodology used to calculate the amount of the payments are quite complex, so often times the person owes money with their tax returns.

Answer 3

Most employees of companies have deductions coming out of their paychecks each pay period that goes to the tax man---at the end of the fiscal year when a person makes out their tax report (or some service does it for them) the figure they have earned in total and the amount they have paid in over time minus what deductions they have taken (or tax credits) will sum up to what their individual tax obligation was---- when what they owed in total is compared to what they've actually paid over the course of the year--- most people have actually over paid and THIS is the monies they receive back from the Federal government

But when an individual has ( for any reason) not paid in over the course of the year as they've earned---- or if they have not paid in enough---- at the end of the fiscal year when their tax reporting is done--- what they've earned and what they've paid in is out of balance--- and they find themselves having to get out the check book to settle up on what they owe !!

Answer 4

They are more concerned with 'getting more in my paycheck' and ignore their actually tax liability. Or maybe they actually do know their tax liability and arrange to owe a small amount instead of giving the government an interest free loan.

Answer 5

Sometimes people claim more than they can prove. example - Claiming 3 dependents, and they don't have them when they file their taxes. They have to return the money that they weren't taxed.

Answer 6

think of it this way

taxes deducted for wages earned - taxes paid by emplorer - deductions = final tax