I claimed 1 and still owe almost $800 in taxes this year - is that normal?

Question

I am single, and made $61,430 last year. I claimed 1 on my W4. I just did my taxes and I see that I owe $800. I'm just confused - does this sound right? Am I supposed to be claiming 0? Help! I just want to know if this sounds normal.

Answer 1

If your income was uneven through the year, it could well be normal. If you made pretty much the same amount every pay period, then that does sound a little high if your W-4 was filled out properly. Your tax on that income, if you don't have any deductions other than the standard deduction, would be $9801. If less than that was withheld, then you'd owe the difference.

Answer 2

No, that doesn't sound normal at all. If you have only one job and no other taxable income that isn't subject to withholding you would normally expect a small refund regardless of your income if claiming 1 exemption on Form W4.

If you had more than one job it's entirely possible, though, as employers base the withholdings on the assumption that your employment with them is your only job. This also happens with married couples if one has much higher income that the other.

Without knowing all of your finances -- W2 wages, the number of W2s you received, interest and dividend income, exemptions, deductions, etc. it's not possible to say why you had a tax balance due this year.

Answer 3

It could be normal under many circumstances. If you worked all year for the same employer and did not get a significant raise, then you would expect to break even or get a small refund. Otherwise, it is possible to owe, in your case, an additional 1.5% of your pay.

Easy to happen when you are in the 25% tax bracket.

Answer 4

The fewer deductions you claim with your employer, the more money they will take out of each check to cover your estimated tax liability. If you would rather put a bit of money into a savings account each month, earn a little bit of interest on it, then owe the government at tax time then claim more deductions. But if you would rather let the government use your money interest free and get a refund, claim fewer deductions.