Home Page link  

Tax novice looking for advice

  
Groups | Search | About
User Password
Register Now! Lost Password?

Taxes General Forum - Tax professionals meeting place and answers to queries. (Moderated)

 Post an article  get this group's latest topics as an RSS feed add this group's latest topics to your My MSN content add this group's latest topics to your My Yahoo content  add this group's latest topics to your Google content  YahooMyWeb Yahoo!  Google Google  Windows Live Favorites Windows Live  del.icio.us del.icio.us  digg digg  Add to Netscape Netscape
Subject Author Date
Tax novice looking for advice Navigatore 03-10-2007
Posted by Navigatore on March 10, 2007, 3:08 am
Please log in for more thread options
 I am afraid that my question may be too basic for this
forum. Bear with me for a moment as I have decided this year
to take on my tax return myself so I am on a learning curve.
I think my tax situation is fairly straightforward (no real
estate, just a few investment but nothing major). I used
Turbotax and arrived at a point where I am wondering wether
I should let it go and go back to by tax consultant.

I filed federal and 2 states (NY, CT) last year and got a
sizeable federal refund and owed quite a bit to New York. I
live in NYC and work in CT. I am filing joint married.
Last year my W2 listed 3 excemptions/allowances, this year
there are 5.

Turbotax calculated for me that I owe this year for federal
tax. While my income is appr 15% higher then last year I
wondering how this is possible that my refund situation from
last year turned into oweing money this year. I do
undertand that there are a number of factors that may
influence this. I do think though that overall everything
remained stable and I am more looking for the reasons that
may have changed my tax situation this year.

Thanks in advance

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Herb Smith on March 11, 2007, 4:09 am
Please log in for more thread options
> I am afraid that my question may be too basic for this
> forum. Bear with me for a moment as I have decided this year
> to take on my tax return myself so I am on a learning curve.
> I think my tax situation is fairly straightforward (no real
> estate, just a few investment but nothing major). I used
> Turbotax and arrived at a point where I am wondering wether
> I should let it go and go back to by tax consultant.
>
> I filed federal and 2 states (NY, CT) last year and got a
> sizeable federal refund and owed quite a bit to New York. I
> live in NYC and work in CT. =A0I am filing joint married.
> Last year my W2 listed 3 excemptions/allowances, this year
> there are 5.

Withholding allowances are claimed on form W-4. They result
in an ESTIMATED amount of tax being withheld during the
year. By increasing from 3 to 5 allowances you have elected
to have LESS withheld from your paycheck, resulting in an
underpayment situation this year.

> Turbotax calculated for me that I owe this year for federal
> tax. While my income is appr 15% higher then last year I
> wondering how this is possible that my refund situation from
> last year turned into oweing money this year. =A0I do
> undertand that there are a number of factors that may
> influence this. I do think though that overall everything
> remained stable and I am more looking for the reasons that
> may have changed my tax situation this year.

Basically, your problem is that you are not having enough
withheld from your paycheck each pay period, because you
increased the number of withholding allowances on your form
W-4. Adjust that number to more correctly withhold and you
should be OK for 2007.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by John on March 11, 2007, 4:09 am
Please log in for more thread options

> I am afraid that my question may be too basic for this
> forum. Bear with me for a moment as I have decided this year
> to take on my tax return myself so I am on a learning curve.
> I think my tax situation is fairly straightforward (no real
> estate, just a few investment but nothing major). I used
> Turbotax and arrived at a point where I am wondering wether
> I should let it go and go back to by tax consultant.
>
> I filed federal and 2 states (NY, CT) last year and got a
> sizeable federal refund and owed quite a bit to New York. I
> live in NYC and work in CT. I am filing joint married.
> Last year my W2 listed 3 excemptions/allowances, this year
> there are 5.
>
> Turbotax calculated for me that I owe this year for federal
> tax. While my income is appr 15% higher then last year I
> wondering how this is possible that my refund situation from
> last year turned into oweing money this year. I do
> undertand that there are a number of factors that may
> influence this. I do think though that overall everything
> remained stable and I am more looking for the reasons that
> may have changed my tax situation this year.

Print out your tax return for each year and then compare the
amounts on each line item. This line-by-line comparison
should point you to the increases and with the software you
can look at what the differences are (you may have entered
something by mistake)

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Bill on March 11, 2007, 4:09 am
Please log in for more thread options
navigatore@piratesoflove.de posted:

> I am afraid that my question may be too basic
> for this forum.
> [material elided for brevity]
> I filed federal and 2 states (NY, CT) last year
> and got a sizeable federal refund and owed
> quite a bit to New York. I live in NYC and work
> in CT. I am filing joint married. Last year my
> W2 listed 3 excemptions/allowances, this year
> there are 5.

Do you mean your W4? That's where you claim exemption
numbers, and it affects the amount of tax withheld.

> Turbotax calculated for me that I owe this year
> for federal tax. While my income is appr 15%
> higher then last year I wondering how this is
> possible that my refund situation from last
> year turned into oweing money this year. I do
> undertand that there are a number of factors
> that may influence this. I do think though that
> overall everything remained stable and I am
> more looking for the reasons that may have
> changed my tax situation this year.

Given the reduction in withholding, and your reported 15%
increase in earnings, it would be a miracle if your tax bill
didn't rise -- substantially.

You probably need a little more tax advice.

Bill

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by ltsllc on March 11, 2007, 4:28 am
Please log in for more thread options

> I am afraid that my question may be too basic for this
> forum. Bear with me for a moment as I have decided this year
> to take on my tax return myself so I am on a learning curve.
> I think my tax situation is fairly straightforward (no real
> estate, just a few investment but nothing major). I used
> Turbotax and arrived at a point where I am wondering wether
> I should let it go and go back to by tax consultant.
>
> I filed federal and 2 states (NY, CT) last year and got a
> sizeable federal refund and owed quite a bit to New York. I
> live in NYC and work in CT. I am filing joint married.
> Last year my W2 listed 3 excemptions/allowances, this year
> there are 5.
>
> Turbotax calculated for me that I owe this year for federal
> tax. While my income is appr 15% higher then last year I
> wondering how this is possible that my refund situation from
> last year turned into oweing money this year. I do
> undertand that there are a number of factors that may
> influence this. I do think though that overall everything
> remained stable and I am more looking for the reasons that
> may have changed my tax situation this year.

Easiest way to find out why there is a difference is compare
last year's tax return side-by-side with your current tax
return.

That should show you what caused any increases in taxes or
decreases in deductions/credits.

Rudy
www.LizcanoTaxServicesLLC.com

Disclaimer: The posted answer is for educational and
guidance purposes only and Lizcano Tax Services, LLC and/or
Rodolfo Lizcano have not been engaged to render any tax,
accounting, legal, or other professional services.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Similar ThreadsPosted
Need some tax advice July 28, 2008, 12:19 am
Need Advice on 2nd RE Investment March 6, 2007, 5:44 am
LLC or S-Corp advice May 10, 2007, 11:35 pm
Looking for advice on W-4 withholding May 25, 2007, 1:41 pm
Mortgage Advice September 10, 2007, 6:58 pm
Advice for restaurants? January 27, 2008, 2:43 pm
H & R confused me. Did I get good tax advice? February 25, 2007, 5:00 am
Got Letter From IRS For Audit - Need Advice Please March 20, 2007, 3:24 pm
Advice Needed: 1041 for Trust March 27, 2007, 12:43 am
Advice, selling, renting, and tax breaks April 9, 2007, 2:12 am

Contact Us | Privacy Policy
This site is not affiliated with Intuit - makers of Quickbooks and Quicken software
This site is not affiliated with Sage Software - makers of Peachtree accounting software
XML SitemapXML Sitemap