It's not fair that single people pay more taxes..ughh. Just finished filing and I see I owe money...for the first time. What can I do to avoid this next year.
2007-01-27 16:08:57 · 9 answers · asked by I Wanna Know 2 in Business & Finance ➔ Taxes ➔ United States
Put more money away in 401K if possible. 401k is pretax which lowers your income off the top. What you give to charity is tax deductible. Giving goods to United Way or veterans organizations is even tax deductible. Itemizing has helped me a lot throughout the years. If you own a house you get to deduct the mortgage interest which gives you a big deduction right there.
You may want to adjust your exemptions so a little more is being taken out throughout the year.
2007-01-27 16:28:21 · answer #1 · answered by Anonymous · 1⤊ 2⤋
Fill out a new W4 and submit it to your employer's payroll department. Claim '0' for everything. That usually works to give you a refund. Realize, though, that you're giving the government an interest-free loan by doing this. The gov't doesn't have to pay you back until the end of the year plus whatever processing time plus the time it takes your employer to get you a W2.
Of course if you suck at saving that's a good course of action. I suck at saving so much that I claim '0' and have payroll take out an extra $20. This year my refund is $1280 because of this setup.
If you make in the ballpark that I make it's not a big deal claiming '0' because the interest I'd make in a money market or CD would be a couple of bucks, if you make more than 75,000 I'd say claim zero half the year and 1 the rest of the year so your taxes will come out to zero and you can invest the difference when you claim 1 into a CD, money market, savings account or stocks. I recommend FUN (Cedar Fair). It's only around $28 and it pays $0.47 per quarter per share (great return).
2007-01-28 00:20:44 · answer #2 · answered by Joker 7 · 1⤊ 1⤋
It just means you didn't pay enough during the year and now just have to the pay remainder of what you owe now. It's not so bad as long you don't owe a huge amount you can't afford and/or that it's so much that the IRS will penalize you for underpayment.
In past years when you got a refund, all it meant was that you overpaid taxes during the year, and essentially gave the government an interest free loan; it's money you could have saved and earned interest on had you not overpaid during the year. Ideally, you should plan it so you owe just a little at year end, and if that's how it worked for you this year, congratulations.
Refunds are overrated, all refunds mean are you didn't plan well during the year. Deliberate over paying all year only makes sense if you don't trust yourself to save during the year, but if you're not going to save the refund either, the logic is flawed. Sure it's nice to get appears to be a windfall (even though it's not) but it's nicer to plan, save and earn interest.
2007-01-28 00:17:07 · answer #3 · answered by O'Shea 5 · 6⤊ 1⤋
I TOTALLY agree with you. I am single as well and have to pay the IRS. I was claiming 1 during the year, but now everyone says to claim 0. The more exemptions you claim, the less they take out of your check which makes you have to pay at tax time. I have 2 jobs, work my butt off and STILL have to pay.
Unreal! Then you have these single women who have babies, get $thousands of dollars back and don't use that for their children like they should!
2007-01-31 15:27:02 · answer #4 · answered by beckett's girl 3 · 0⤊ 0⤋
You still owe the IRS because you did not have enough money witheld from your wages. To avoid this happening next year you can either get married before December 31, or you can have your employer withold more from your paychecks (W-4). If you are self-employed, then you need to make bigger estimated income payments each quarter.
2007-01-28 00:24:21 · answer #5 · answered by arizona wolfman 5 · 1⤊ 2⤋
If you work for wages you can file a new W4 with your employer and have more federal income tax withheld from your wages every paycheck to avoid having to pay come april.
You can download a W4 from www.irs.gov or you can ask your employer for a copy to fill out.
2007-01-28 00:13:11 · answer #6 · answered by emeraldsky21 2 · 3⤊ 3⤋
Yeah, I don't like either. I know somebody, single, that made 60,000 dollars, paid 15,000 in taxes, do you think they would get a good refund? Nope, a lousy 1,000 dollars. It'll get worse with the democrats in office wanting to socialize everything.
2007-01-28 00:22:03 · answer #7 · answered by HAGAR!!! 6 · 0⤊ 5⤋
If you don't want to pay at the end of the year, have more withheld during the year.
2007-01-28 03:03:13 · answer #8 · answered by jseah114 6 · 1⤊ 3⤋
Vote Republican, Do Not vote Democrat
2007-01-28 00:14:09 · answer #9 · answered by Anonymous · 1⤊ 6⤋