I have always had to pay taxes at the end of the year while my friends always get money back am I being screwed or is this right?
I was making about 25,000 a year?
2007-10-23 12:05:59 · 12 answers · asked by kyndra_charmed 2 in Business & Finance ➔ Taxes ➔ United States
If you're filling out your tax returns correctly, you're not getting screwed.
Tax Refund = Tax Owed - Tax Withheld
If you withhold too little, you'll have a balance due with your return. If you over withhold, you'll get a refund of the overage.
2007-10-23 12:19:50 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Some times when people get together and talk about their taxes, everyone does not know the full story. There can be many reasons why your friends are getting refunds because they may have different situations that you may not be aware of. Now, I looked at last year's Tax Table (2006) and I using your 25k figure. I am assuming you are single and have no dependents. Plus you have no other income and here is what I come up with.
Gross Wages 25,000
less than your standard deduction of 5,150
less than you personal exemption of 3,300
Your taxable income is: 16,550
So your taxes would be: $2,109 for 2006.
Take a look at your last pay stub and see if you have a cumulative Federal Income Tax Withheld and what the amount is: If you feel that you won't even make 2,109 then take a look at your W4 form (your payroll office) and you might be claiming to many exemptions. See Line 5 on your W4 form. Hope this helps.
2007-10-24 18:57:36 · answer #2 · answered by Gary 5 · 0⤊ 0⤋
No, you are not being screwed. You're just not having enough withheld from your pay, plain and simple. You only get a refund if more is withheld that you owe at the end of the year.
Personally, I'd MUCH rather PAY than get a refund! If I get a refund, it means that I gave the dang government an interest free loan for up to a year. I hate doing that! I want MY money in MY pocket for as long as possible. As long as I owe less than $1,000 when I file, I'll pay no penalties or interest for underpayment of tax so that's what I shoot for.
If you'd like to give the government an interest free loan, then file a new Form W-4 at your job and reduce the number of withholding allowances you're claiming. If you're claiming 2, cut it to 1 or 0. The downside to this is that your paychecks will shrink if you cut your withholding allowances. If you want a REALLY big refund, tell them to take an extra $100 per week from your pay. That way you'll get an extra $5,000 when you file. Of course, your paychecks will be $100 per week smaller... It's your choice.
2007-10-23 20:39:12 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 1⤋
Whether you pay or get money back at the end of the year depends on your withholding levels during the year. Getting money back when you file your taxes just means you gave the government an interest-free loan during the year. Your best bet is to use your expected income and deductions to calculate your correct withholding amount. Ideally, you should just pay a little or get a little back when you file your taxes.
I don't think you're getting screwed; your friends must have more withheld during the year than you do.
2007-10-23 19:10:30 · answer #4 · answered by Kathryn 6 · 0⤊ 0⤋
You're probably okay. It depends on the number of deductions and how much you make. Think of this positively. Your friends end up making an interest free loan to the US Government. While you have to pay some at the end of the year - at least you (hopefully) were earning interest on that money in your bank account.
2007-10-23 19:16:17 · answer #5 · answered by Angie 6 · 0⤊ 0⤋
What are you claiming? That is probably where your problem is. It could also be in their deductions that are allowed. Claim single and 0....this will take out the most taxes. If you are working only a minimum of hours, say PT hours, based on a bi-weekly, bi-monthly, or monthly pay scale, then even filing the single and 0 will not help. You may need to go s/0 with additional monies withheld. That way every check, regardless of number of hours, some money will be taken.
2007-10-23 19:11:25 · answer #6 · answered by T 5 · 0⤊ 2⤋
If you take the proper deductions you shouldn't get any money back.
Remember it's your money, if you are getting it back it simply means you paid the Feds too much of your money to begin with.
A refund isn't really a good thing. It just means you loaned the government your money for nothing.
If you want a refund just pay the government more! You can get back everything you paid them, less what you owe in taxes.
2007-10-23 19:10:00 · answer #7 · answered by mstrobert 5 · 0⤊ 0⤋
If they made about the same amount and had the same personal situation like marital status, kids, etc., sounds like they probably had more withheld than you did. A refund just gives back an overpayment.
If you want a refund, have an extra $200 a week withheld, then you'll get lots back.
Doesn't sound like a good idea? I didn't think so.
2007-10-23 19:38:19 · answer #8 · answered by Judy 7 · 0⤊ 1⤋
Thats a typical story, make sure you have enough withholding taken out, your w4 should be Zero, not 1 or 2.
The mistake people make is in assuming the IRS is a bank and the refund check is a Christmas club.
2007-10-23 19:09:27 · answer #9 · answered by god knows and sees else Yahoo 6 · 1⤊ 1⤋
everyone's returns are different. it matters on filing status,deductions,exemptions,the tax withheld.
2007-10-23 19:10:35 · answer #10 · answered by Anonymous · 0⤊ 1⤋