Please answer this question concerning tax withholdings?

Question

My wife recently left her job where she made around $35,000 yearly and now is going to be making somewhere around $18,000 yearly on her new job. We have filed seperately for the last 6 years because I make a cosiderable amount more than her and although I have had to pay in some, she has always gotten back around $3,000 and that is claiming my 15 yr. old son. Now she is claiming married with NO dependants (just as she had done at her previous higher paying job). On her last check she grossed $589. and they only held out $25.62 federal, $36.55 Social Sec., and of course $14.66 state. My question is....does the federal amount sound correct? It seemed quite low to me, and my fear is her return at the end of the year being drastically lower than normal. Please answer and feel free to provide as much detail or info as you wish.

Answer 1

Follow this link to the tables to determine what should be withheld.

Withholding is determined by gross pay, but also pay frequency, whether withholding as married or single and # of exemptions claimed.

http://www.irs.gov/pub/irs-pdf/p15.pdf

Answer 2

First of all, you are probably costing yourselves money in total by filing separately. OK, she's getting back more - but have you checked the total for the two of you figured filing separately and jointly? If you're getting a lot more back IN TOTAL, something is being figured wrong. If it's even a little bit better, unless one of you has very high medical expenses or unreimbursed employee expenses, something is most likely wrong.

You didn't say how often she's getting paid on the new job - I'm assuming from the numbers you give that it's every two weeks. If so, she should come out pretty close at the end of the year. But no way she'd get a big refund, and most likely would owe a little instead. She would have paid in a little under $700, and her total tax would likely be that much or more. If she continues to claim your son, then she might get a refund of a couple hundred dollars, maybe more if he qualifies for the child tax credit - but in any case would not get more back than she paid in. You know, I assume, that someone married filing separately can't claim an earned income credit.

If you continue to file separately, check to see who would get the greater benefit from claiming your son. With an income of $16K-$18K for your wife, you'd most likely get the larger benefit. But again, you're probably hurting yourself in total for the two of you by filing separately.

Answer 3

My advice to you would be to immediately submit an amended return (1040x) for the past 3 years because you can likely get back larger refunds than by filing seperately.

Filing "married seperate" is the worst possible tihng you can do ever in your adult life. Satan invented this filing preference himself on a particularly clever and evil day. By filing seperate, you disqualify yourself from about a dozen different tax advantages, some of which may not apply to you.

As for your wife's check, yes, it sounds right. She's not going to owe very much on $18,000 income, especially if she's still claiming "married seperate 2" on her W-4. If she makes less than $11,750, she won't pay anything ($8450 if she's only taking 1 exemption).

(If you first filed a joint return, you're not allowed to change it to "married seperate". I don't see a prohibition for the reverse, but you will both have to amend together if you amend at all.)

Answer 4

I merely checked your profile and also you're a lawyer. i wish that you've some tax professionals at your agency. listed the following are some common observations out of your question. i'm guessing that you will be subject to AMT. if it really is the case, any answer might want to be skewed. merely considering that you purchased married gained't inevitably decrease your tax criminal duty. really, being an unmarried couple with toddlers and possessing your human being residence is a extra efficient subject even as it contains taxes. in case you do not believe me, run the numbers your self once you practice your tax go back. if you're that in contact, make an anticipated fee through January 15, 2008. The worst element which will ensue is that you receives the money back once you document your taxes. you do not provide adequate training in case you had adequate withheld in accordance on your finished deductions. because you claimed 5 exemptions on your W-4, you're pointing out that you had a minimum of $17,000 in deductions. this does not comprise any deductions that your husband had. examine IRS e book 15 for added training. you won't be able to get a credit for any ultimate prices that you paid. besides the indisputable fact that, the resources taxes that you paid once you closed on the homestead, from the date of ultimate by the proper of the 12 months, might want to be taken as an itemized deduction on your tax go back. The charitable contributions will decrease your tax criminal duty as long as you itemize. once you've something else that you promises (issues, not money) will added decrease your tax criminal duty. i'm pointing out issues because i'm assuming that you're merely fascinated in reducing your tax criminal duty without reducing you money bypass. once you've the favor to generate income contributions, bypass ahead. filing joint will be useful until eventually you've particular comprehend-the thanks to document a separate tax go back. in case you document separate, then you fairly will lose any a probability tax credit like the youngster Tax credit. in case you and/or your husband each had your human being houses beforehand you obtain your position, then you fairly have loan interest that you could use as a tax deduction. Sine you closed on your position in October, i'm guessing that your first loan fee develop into due December a million. that isn't help you a lot at tax time for this 12 months. i wish this permits.

Answer 5

Whether you file seperately or with a joint return, you are required to add your incomes once you are married. That is, you are taxed in the bracket your combined incomes put you in whether you file a joint return or not. The federal amount she's currently having withheld sounds about right for a job only paying 18k, but I wouldn't be surprised if her return at the end of the year is significantly lower -- mainly because she is making so much less.