After moving to California and paying higher rent, I went exempt all year($67,000), what will happen?

Question

I know that I will have to pay in, but does anyone know about how much? I plan on taking care of this as soon as I get my w2.

Also I may be claiming my sister who has been living with me all year and is under 18 and I have been supporting her. How will this help?

Answer 1

Well, single 67000 - $5350 - $3400, leaves $58250 of taxable income at the federal level. About $11000 at the federal level. PLUS you will owe estimated tax penalties for failing to have this withheld (think about 4%). Don't be surprised if your employer receives a Lock-In letter saying you must file as Single-1 in the future.

I have no idea what your state income tax bill will be.

Answer 2

Oh, geez, are you in deep! Paying higher rent? What does that have to do with taxes? It's not deductible. If you just felt like you needed the money, now you'll be paying big-time.

If you are single, with gross income of $67,000 all from a job as an employee, you'll owe somewhere around $10,876. If you don't take care of this BEFORE you file, by changing your W-4 asap and making a huge estimated payment by 1/15/08, you will also owe penalties for underwithholding, plus a possible $500 fine for illegally claiming exempt, and your employer might be directed to withhold your taxes in the future as if you filed one or zero allowances. So don't wait until you get your W-2 - scrape together at least $10,000 and send it in by 1/15 with a form 1040ES. This might or might not save you.

You will also have issues with state tax, and will owe thousands of dollars there, probably plus penalties.

Answer 3

It depends how much you made before you moved to California, to get your total annual income, and how much was withheld during that time (for Federal tax.) When you calculate your CA tax, you'll only pay tax on the money you earned in CA but it will be taxed at the rate you would pay if all your income was CA income. Since you had 0 CA tax liability last year, you won't have a state under-withholding penalty, but will probably have a Federal one.

Don't forget that your moving expense will be not just a Federal deduction but also a CA deduction, since you're moving into the state. And don't forget to file one last return with the state you moved from.

Answer 4

If you can file as Head of Household and claim your sister as a dependent, then your taxes are reduced to $8,526.

If you had unreimbursed moving expenses, be sure to fill out Form 8903 and get an adjustment for that.

Since you owe more than $1,000 you will pay a penalty for underwithholding of taxes. Since you filed exempt you may be subject to mandatory withholding in the future. To hopefully avoid these problems, file estimated taxes immediately.

Answer 5

Let me look at my 2007 US Master Tax Guide........If you made $67,000, then you should be paying around $13,314 if single or $9,621 if married filing jointly. That is just federal too.

So get married by the end of the year and save some money on taxes

I would get exact numbers but my tax program is updating right now