tax exempt... hellppppppp!!!?

Question

i will make approximately $80000 at the end of the year.. i have 2 kids and paying for daycare 1000/month... my husband/soon to be ex owns a home and we paid for the house monthly in half but the loan is under his name.. if i continue being tax exempt at the end of the year, how much do you think i will owe the government at the end of the year i file alone without my husband?? i just cant afford paying 2000/month on tax right now..... what should i do...

Answer 1

need to know more info to give you a good number. You can be penalized at year end for underpaying your taxes if you owe more than $1,000. The penalty would be based on your minimum payment which would be either 100% of prior year tax (110% if high income taxpayer) or 90% of the current year tax. If you are making 80,000 for the year in income and claiming exempt on W-4, you will owe a lot more than $1,000 at year end. Depending on your circumstances you may be able to file as Head of Household by year end whether you are still married to your soon to be ex or not. I have included a link to Head of Household status, but basically, as long as you have not lived with soon to be ex for the last 6 months of the year and you are supporting and claiming your children you should be able to file as head of household. I don't know how old your children are, but I'm assuming if you are paying for daycare that they are under the age of 12, which means that you can claim the child care credit for their daycare, and more importantly the $1,000 per child child credit.

I have attached a calculation site to help figure out what your federal liability will be, I used the $80,000 in income that you said that you will earn for 2007, took standard deduction as Head of Household status, and 3 personal exemptions (yourself and the 2 children), and came up with taxable income of $61,950 and a tax of $10,663, before any credits. The child tax credits should reduce that amount by $2,000, and as for the dependent care credit based on $1,000 per month you would have $6,000 of deductible child care expenses (that's the maximum you can deduct for 2 children) and at your income the credit rate would be 20%, so your child care credit I think would be about $1,200, so you would be looking at a federal liability come next April of around $7,500. I don't know what state you live in so I can't figure that out.

Answer 2

I'd be awfully surprised with that much income if you are really tax exempt. If you have claimed "exempt" on your W-4 when you really aren't, you can end up being fined $500 for doing that, in addition to having to pay the taxes when you file, plus penalties for underwithholding. Claiming exempt when you aren't is a REAL bad idea.

You don't really give anywhere near enough info to give you an answer. Do you expect to be divorced before the end of the year? Who will be claiming the children? will you be itemizing, and do you have any idea what your itemized deductions will total (yours, not his)? Worst case you could owe over $10K, and that's if YOU are claiming the kids.

Answer 3

With that income, there's no way that you could claim exempt from withholding. That would be a fraudulent claim and would attract a $500 penalty in addition to any taxes due at the end of the year.

If you can't afford $2,000 a month in taxes, what makes you think that you will be able to afford $10,000 - $20,000 all at once at the end of the year? It's not possible to say what your final tax liability will be from the information given but it could easily be in that range.

Answer 4

If you qualify as Head or Household( did not live with spouse for last six months of year. you will owe $8,050.
If you are required to file MFS( did live with spouse)
you will owe $11,044.
This is based on 2006 rates.

Answer 5

WELL YOU MAKE TOO MUCH TO QUALIFY FOR EIC CREDIT, BUT IF YOU HAVE ENOUGH DEDUCTIONS SUCH AS, DAYCARE EXPENSES, MEDICAL BILLS, CHARITY, DONATIONS, MILEAGE, ETC. YOU SHOULD HAVE NO PROBLEM AND STILL MIGHT EVEN GET A REFUND.