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Posted by chamade on February 18, 2007, 4:28 am
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Hello,
In 2005 my salary was 59,000 and I got a federal refund of
about 2,700$ ( I started the job in may).
In 2006 my salary was 67,000 yet my federal refund is only
692$. Why is this? I was expecting more than in 2005?!?
Same job, same company, didn't adjust how much tax they
should withold. The only thing that changed is that I
enrolled in a 401k for 2006.
This is according to Turbotax, could it be a bug or wrong
information on the W-2?
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Posted by Herb Smith on February 18, 2007, 7:14 am
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cham...@gmail.com wrote:
> In 2005 my salary was 59,000 and I got a federal refund of
> about 2,700$ (I started the job in May).
> In 2006 my salary was 67,000 yet my federal refund is only
> 692$. Why is this? I was expecting more than in 2005?!?
> Same job, same company, didn't adjust how much tax they
> should withold. The only thing that changed is that I
> enrolled in a 401k for 2006.
In 2005 you only worked for a portion of the year, yet got
the full benefit of the personal exemption(s) and standard
deduction for your filing status. Also, because of the short
year, your withholding was probably overwithheld - resulting
in a larger refund.
The real question is WHY are you having so much withheld
that you would have $2,700 overwithheld? Sounds kind of
stupid to me.
>
> This is according to Turbotax, could it be a bug or wrong
> information on the W-2?
More likely it is because you haven't bothered to figure out
the federal tax system, so naturally assume this is a
"problem".
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Phil Marti on February 18, 2007, 7:14 am
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> In 2005 my salary was 59,000 and I got a federal refund of
> about 2,700$ ( I started the job in may).
> In 2006 my salary was 67,000 yet my federal refund is only
> 692$. Why is this?
The withholding tables assume that your income is steady
throughout the year. Thus, in 2005 your withholding was
based on an anticipated total income of roughly $88,000.
Since the income tax rates are progressive, someone with
$88K income pays a higher effective tax rate than someone
with $67K (actually less because of your 401(k)
contributions).
It sounds like you're still having too much withheld. If
you're single with only one job and minimal other income,
you should be claiming two withholding allowances on your
W-4 filed with your employer.
--
Phil Marti
Clarksburg, MD
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by joetaxpayer on February 18, 2007, 9:51 pm
Please log in for more thread options chamade@gmail.com wrote:
> In 2005 my salary was 59,000 and I got a federal refund of
> about 2,700$ ( I started the job in may).
> In 2006 my salary was 67,000 yet my federal refund is only
> 692$. Why is this? I was expecting more than in 2005?!?
> Same job, same company, didn't adjust how much tax they
> should withold. The only thing that changed is that I
> enrolled in a 401k for 2006.
>
> This is according to Turbotax, could it be a bug or wrong
> information on the W-2?
The data we don't have is - what is your net income in both
years, after any 401(k) deductions, which for federal taxes,
come off the top. And then, how much was withheld? By the
way, using tax withholdings as a savings plan should be
avoided. The $2700 was money you lent uncle sam at no
interest, and no 'thank-you'. You'd have been better off
adjusting your withholdings to end the year as close to
net-zero as you can.
JOE
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Harlan Lunsford on February 18, 2007, 9:51 pm
Please log in for more thread options chamade@gmail.com wrote:
> Hello,
>
> In 2005 my salary was 59,000 and I got a federal refund of
> about 2,700$ ( I started the job in may).
> In 2006 my salary was 67,000 yet my federal refund is only
> 692$. Why is this? I was expecting more than in 2005?!?
> Same job, same company, didn't adjust how much tax they
> should withold. The only thing that changed is that I
> enrolled in a 401k for 2006.
>
> This is according to Turbotax, could it be a bug or wrong
> information on the W-2?
If you're married and filing a joint return, did both of
your two kids turn 17 last year? You would then have lost
exactly 2000$.
This just goes to show that your limited information doesn't
tell us anything, and we can make a lot of assumptions about
your true condition.
Facts?
ChEAr$,
Harlan Lunsford, EA n LA
<< ======================================================= >>
<< 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. >>
<< ======================================================= >>
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