Please help with my tax filing issue!?

Question

Ok, so I figure I'm already screwed and on the verge of a heart attack, lol but here's my situation.

I worked this year from April-current claiming only myself until early July then I went exempt. I was misguided by co workers into thinking I could claim exempt while working fulltime for 6 months without facing penalty.

Well I just unfortunately started doing my research and redid my W4 again claiming myself with one allowance. I've made about 14 grand thus far and have had 3 raises since hire in.

Can anyone please help me or advise me what to do?
I don't care if I have to redo the W4 again and get them to pull out 50% of my check at this point. I'm scared :(

Answer 1

You need to claim zero immediately.. so they start taking the MOST taxes possible out of your check. You will owe a penalty if you end up owing over $2,000... but you also may not. Just claim zero now just to be safe.

My advice to anyone is to, claim the least possible... you will always get it back when you file taxes. Better safe than sorry...

Answer 2

First, you are not alone. Getting withholding right can be hard when your work situations changes during the year. The first thing to do is calm down. It is not as bad as you fear. Honest mistakes do not get people put in prison and if you act now, your penalities, if any, will be really small. (8% per year)

You may not even owe a penalty if
Your total 2007 tax due minus your withholding is less than $1,000.
OR
You did not have a tax liability for 2006.

To get things straightened out, you need to figure out how much should have been withheld and then adjust your W-4 to the right number of exemptions and have the additional taxes, if any, withheld by putting the amount due divided by the number of paychecks left in 2007 on line 6 -- it is the only one with a dollar sign.

You can get help with the following IRS publications:

1) Publication 919 -- How Do I Adjust My Withholding? http://www.irs.gov/pub/irs-pdf/p919.pdf

2) Estimated Taxes - 2007 http://www.irs.gov/faqs/faq-kw146.html

If increasing your withholding would take up too much of your check, you have until January 15, 2008 to make a final estimated tax payment for this year.

Worst case, you get the missing money together by April 15, 2008 and pay when you file your 2007 return and possibly have a very small underwithholding penalty.

If you are really stuck and don't understand the IRS publications, find an experienced tax preparer to help you figure it out. Or you can call the IRS Taxpayer Advocate and ask for help -- they really do help people.

The only way it gets worse is if you have to set up a payment plan with the IRS. They have stingy allowances for living and the penalties and interest add up faster than MasterCharge. (You're better off borrowing the money from any other source and paying them off -- honestly.)

Remember, you are in a good place by paying attention to your taxes and acting now. Things will work out fine. Even IRS agents put on their pants and pantyhose one leg at a time -- at least my mother always did.

Mariam

Answer 3

If your federal withholding so far this year is less than about $500, you'll owe when you file your return. It'll be below the amount where you'd have to pay a penalty though.

I'd change your W-4 to zero allowances for the rest of the year, and have an additional $65 a week taken out (you can request that on your W-4), and you won't owe a whole lot at tax time, but make sure you have a couple hundred dollars
saved in case you have to pay. Then in January change it back again to one allowance, nothing extra withheld.

You aren't in some kind of major trouble over this, so relax.

Answer 4

Don't let the big, bad revenue man scare you. The worst that can happen is that you may have to pay a penalty for underpaying with-holding taxes. And I seriously doubt that because the Feds give you leeway in not paying enough, and I think this is a $ 1000 leeway.

Assuming that you will gross about 18 K and are filing single and would not itemize deductions, your net income for taxes will run about 10K, on which you would pay about $1119 (from the 2006 tax tables, Publication 17). So bust out your pay stub and check out the cumulative pay and withholding statement part.

Even if you do fall outside of the $ 1000 tax due window of error, the penalty is not all that costly, but the form preparation is a real *****. If you still are queasy, you can arrange to have withholding on the basis of NO dependents for the rest of the year.

Answer 5

Assuming you have adequate cash flow or money in the bank, complete a new W4 with 1 allowance and ask them to withhold an extra amount from each check. You can try to play catch up for the remaining 1.5 months of the year. For example, if you earn $600 per week (paid weekly) ask them to withhold an extra $200 per week (or whatever number the IRS worksheet recommends).

See IRS Publication 919 and complete the worksheets.

If you underpaid your taxes by more than 10%, the IRS may charge you a penalty and demand you to file quarterly statements in the future.

Answer 6

I wouldn't be that scared because you don't make enough to make this a dire situation. if you only made 14 grand in 7 months, then you don't even clear 30,000 a year. your tax bracket will not be that high.

i didn't pay taxes at all last year due to a mistake in payroll, and I ended still getting money back...

Answer 7

it's better 2 contact any good ca...
i m not getting any ideas...

Answer 8

just put it to ''zero''..u are better off that way.

Answer 9

you solve it with help of layer