Long story short...husband and I made approximately $60,000 in 2007. An error was made and he's been claiming 4 people for 6 months on his paycheck, (I claimed no one through the year). We only have a family of 3 so how 4 people were made exempt is beyond me. We've paid approximately $6540 in federal and $2720 in state. How much are we going to have to pay in? And what will happen if we can only do a payment plan? Do we have to get a lawyer to setup a payment plan? Any info would be appreciated.
2007-12-27 12:56:00 · 4 answers · asked by no one 2 in Business & Finance ➔ Taxes ➔ United States
Also, we don't have any interest on a house we can deduct or anything like that. We file short form as we don't own anything.
2007-12-27 13:05:31 · update #1
$60000 - $10700 filing joint - $10200 for 3 exemptions = $39100 taxable income. The tax is $5079. You will get a refund! Don't forget, I didn't include child tax credit, day care, or education which will give a larger refund. I don't know about state refunds they are all different. If you ever do owe, call the IRS. They will be happy to give you a payment plan which is usually 1/60 of the amount owed but not less than $25.
2007-12-27 13:20:33 · answer #1 · answered by Brian H 2 · 2⤊ 0⤋
Long answer short, You don't need a lawyer to set a payment plan! You sound know somethings, so take a time &read, do research a little bit.
I assume you talking about the W-4 Employee Withholding Allowance when you say that he's been claiming 4 people. The total number of allowance that he claimed is not a number persons he should claim. The W-4 Employee Withholding Allowance number depends on projected tax credits, spousal work status and child/dependent care expense... etc., Below link will help you to learn more about this subject. Pay attention to the worksheet, that's where you determine the allowance needs to be deducted from the paychecks. The bottom line is he would not get any way wrong if he claimed additional number of allowances than he should have. He will get that money as a refund if he withheld too much (means he paid more than he should pay for income tax of 2007).
http://www.irs.gov/pub/irs-pdf/fw4.pdf
As far tax liability, this is a kind of rough calculation. Since I don't know your child's age & other available credits that may reduce your tax. For example: Child Tax credit ($1000)
$60000 (Income)- $10700 (MFJointly Standard Deduction)- $10200 (3 exemptions of $3400)=$39100 (Taxable Income) Your Federal Tax Liability would be around $5114(According to tax table). You said your tax payment (withheld amounts or estimated payments) is $6540. So it looks like you may receive a refund of $1426. Remember this is a very rough estimate. I do not know your state tax rate.
2007-12-27 21:51:40 · answer #2 · answered by Q 3 · 1⤊ 0⤋
With an income of $60K, and three exemptions, your tax liability will be around $5086, or $1000 less than that if the third family member is your dependent child under age 17. So relax, you're fine on the federal level, and will even get a refund of around $1450 or $2500 depending on whether you are eligible for the child tax credit.
You don't say where you live, but you might be OK at state level also.
Good luck.
2007-12-27 21:21:16 · answer #3 · answered by Judy 7 · 1⤊ 0⤋
fill in the blank on your tax form and it will tell you the answers.
2007-12-27 21:04:50 · answer #4 · answered by Nancy 3 · 0⤊ 0⤋