TAXES...help :(?

Question

We came into some financial trouble this year when I lost my job so my boyfriend filed "exempt" on his taxes so that we could pay our bills--because they were taking out SO much money. Now it's 4 months later...and I'm worried that he will owe. How do I find out if we are going to owe money, and how do I calculate how MUCH we will owe? And will we still be able to get our child tax credits? Ugh I'm worried...Any advice anyone? Anyone know how all this works?

Answer 1

Withholding is part of the pay-as-you-go requirement of the tax code. Your boyfriend shouldn't have filed exempt since he didn't qualify (did not owe any taxes last year/does not expect to owe this year). Not a big deal, just shouldn't have done it. Better to file Married with 7 exemptions (legal, but should stop all withholding without using exempt). Claiming married on a W-4 when not married is not illegal, it just sets a withholding rate.
Now, if you live with your boyfriend in a state that recognized common-law marriages, consider filing a joint tax return. he would be able to claim your exemption and would be qualified to file at the much lower tax rates, since you do not have as much income as you did last year. This is even better if you have a child (or two) that are yours, but not his. (not to assume anything, but this is fairly common these days). The only way he can take advantage of your children on his tax return is to have a legal or blood relationship with them (new since 2005 tax year). If your income is much lower than his, this may be very benficial.
If you can afford to have additional withholding now, refile the W-4 and have them start taking them out again (you can refile a W-4 every paycheck!). If not, the IRS will accept payment plans, but they charge a lot of interest ( but not as much as a high rate credit card). You'll make payments to them after April 15th.
If you are really concerned, go to one of the year round offices of H&R Block and bring them your paychecks. they have calculators that can estimate your taxes (tax laws can change, even after Jan 1st).
Good luck.

Answer 2

First of all, there's not a "we" here - since you aren't married, you will not be filing a joint return. And it's illegal to file exempt if you aren't, so if he expects to owe any tax, he should file a new W-4 changing that.

If the child or children are your biological children together, then either one of you can claim them, and you can choose who claims them based on who would save the most in taxes. And assuming the child is under 17, yes the person who claims them will get the child tax credit.

The amount you owe is based on your income. If you'll post again with the total gross inome for the year that each of you expects, the total amount withheld for federal income taxes, and the number and age of any children, someone can probably give you a much better estimate. With the info you give, there's no way to tell.

As to the comment above that you can file a joint return if you live together in a state that recognizes common law marriages, that is not necessarily correct - even if you do live in one of those states, there are a lot more requirements for common law marriage (and a joint return) that just living together.

Answer 3

Put his data into last year's tax software, using the pay stubs to figure out the yearly income and withholding. The balance due should be pretty close to what he will owe for 2007. If he wishes, he can take this information to a tax preparation place and they can estimate your taxes for him.

Your boyfriend can get the Child Tax Credit or Earned Income Credit for his children only. How he filled out his W-4 has nothing to do with his eligibility for the credits.

If he is going to owe more then $1,000 he will pay a penalty and interest. So he may want to change the withholding for Nov and Dec, or send in an estimated payment to bring his balance due under $1,000.

Answer 4

What you have paid in has no effect on your child tax credits.
To figure what you are going to owe, rough it out using IRS Form 1040-ES then if your year to date withholding is not going to cover it, you can change your W-4 in the other direction and play catchup.

Answer 5

pupil loans are actually not income. they don't get reported on the tax return. Your placed up is perplexing. it seems which you have been "self-employed" and claimed you made $$$ in income from that to FAFSA, yet did no longer record the income considering you probably did no longer record. Self-employment income triggers a submitting requirement once you're making extra desirable than $4 hundred. considering you probably did no longer record, you will additionally owe a penalty for failure to record, pay as properly as activity.