got a negative tax return, is it normal?

Question

I am filling in my 2006 tax return by Turbo Tax on line. This is my first time to use this program. I was so surprised finally I got a negative return which means I will have to pay more tax. Is it normal?
I am married and submit the tax return with my spouse jointly. We bought a home last year and are still paying our mortgage. So we suppose we can get more return this year.

anyone has some comments?

Answer 1

I PLAN to owe the IRS a small amount each year. Why should I give them an Interest free loan? I prefer to have the money myself. If you learn how withholding works, you can actually decide at the beginning of the year the approximate amount you will owe or be refunded.

Answer 2

You don't "get" a "return". The return is the form you file with the IRS that lists your income, exemptions, deductions, etc. and shows your tax liability, payments, and either a refund or balance due.

If you owe at the end of the year it means that you did not have enough tax withheld during the year. It's pretty common for married couples to owe at the end of the year if they don't prepare the Forms W-4 at their employers properly. This is especially true of one makes significantly more than the other does.

You need to prepare your W-4s together and use the worksheets on page 2 to account for any itemized deductions and the impact of having 2 earners in the home. The number you come up with is the total number of exemptions you can claim between you. It's also likely that you'll have an additional amount on line 6. One of you needs to have that extra amount withheld from your pay to ensure that you come out right at the end of the year.

Answer 3

Without more details, it is hard to answer your question. Did you and your wife change your deductions (exceptions) at work through payroll after or before you purchased your house figuring yours have a larger refund coming back? Did you include the interest, taxes from your settlement sheet in you tax return? Did you buy your home toward the end of the year and not have much interest to deduct? All these thing would explain why you might owe taxes instead of getting a refund. Go back through your deductions and your withholdings. Compare your withholding to the withholdings you had last year. That may tell the whole story.

Answer 4

It is certainly not "abnormal".

I am almost in the same situation you're in. Filed tax jointly and just purchased a home last year. I used H&R Block and it showed I owe more taxes.

2 contributing factors comes to mind:
1. You and your wife made more money last year than previous years. (a good thing I'm sure but it also means more taxes)
2. You did not increase your tax withholding on your W-4. (you can find a copy here: http://www.irs.gov/pub/irs-pdf/fw4.pdf) Submit to your employer/HR.

To keep my tax obligations low I am now consulting with a CPA to determine the maximum amount of deductions/adjustments I can take.

Also, Turbo Tax and H&R Block both have premium softwares online on top of the free version they offer online. They will cost more but they give you more advice and suggestions for deduction. Nothing is free.

H&R Block also has a package where you can speak with a consultant over the phone or you can visit one of their offices for no extra fee. I have not tried it but it might benefit you.

Also, trying to set up a home business will allow you to take more deductions by claiming business expenses. Again, you may need to consult with a professional for details.

Hope this helps. I am still digging for more deduction opportunities.

Answer 5

It's normal nowadays. Since we have to pay for the needs of countries other than our own, you can expect the government to hit you in the wallet. I end up having to pay in excess of $1000 each and every year. It has been this way for years and I don't look for it to change as long as the Republicans are in office.

Answer 6

I live in Canada and here "the more you make, the more they take" we haven't got a tax return for 6 years, always have to pay, maybe go to an accountant to get your taxes done.

Answer 7

This all happens because (most of the time) your employer did not upgrade the percentage in his books if you were making more, got a raise, bonus, etc. Also it sometimes goes up when different things in your life changes, marriage, house purchases, children etc.

Answer 8

Does your employer know you are married? If not you would be paying tax as a single person.

Answer 9

go to citizens advice