Something told me that I should do a check up as to where I am with my tax withholdings at this point. I decided to look at the total taxes withheld on my W-2 from 2010, compared to where I would be if I continued to withhold what I currently am, through the end of 2011. Oh oh, I smell trouble! From the looks of it, I would be very close to what I withheld last year. We all know where that got me (read here if you don't)... owing $7K+ in taxes.
I know how it happened. In an effort to get the taxes paid off quickly this year, I had basically nothing taken out for 5 paychecks. I thought claiming Married, Zero for the remainder of this year may balance things out but from the looks of it, it won't. Unfortunately we don't have much for deductions really since we don't own a house or have children we can claim.
I refuse to be stuck in the same situation I was last year, where I had to scramble to get the money to pay the tax man. I don't want to do that again. I won't do that again.
This leaves me with no choice but to adjust my withholdings now. I'm going to have an additional $360 withheld each pay period. There are 10 more paychecks left this year, so that will be an additional $3600 going towards taxes. I'm not even sure that this will be enough but it's all I'm willing to do right now. Anything more will impact our debt repayment schedule more than I'm willing to do.
Hopefully this will be a wash, but if not, at least I'll owe less. Just when you thought it was safe to let your guard down. Better I discover it now than when it's too late to remedy.
I don't know if this helps but my mother who worked for the IRS for ever alwasy had me put married at a higher single rate and then an exta 100.00 taken out every pay. This way the rate was high(married at single claiming 0 is higher - dont know if thats what you did)
ReplyDeleteOnce we had kids and the house i readjusted it but it still sucks to owe anything in taxes
Judy
OUCH. But yes, better to find out now. Good for you for monitoring it.
ReplyDeleteIt was a great suggestion to check. So many people do not even bother and then are surprised when they end up with a huge bill!
ReplyDeleteTry using the IRS tax withholding calculator. It can tell you where you currently stand and what adjustments you need to make. All you need is your last pay stub.
ReplyDeleteIt's a good thing you're on top of your game to check. I'm one of those lazy ones that don't :(
ReplyDeleteWe had the same problem last year and ended up having to come up with more than 5K. We found out we owed that much this April and had to come up with the cash fast. We quickly changed our withholding, but we will still owe next year :(
ReplyDeleteGood luck!
You know, I have never been able to get the withholding right. I received a big return last year, but I think I may have overcompensated this year. I hate that impending doom feeling taxes still give me - ugh!
ReplyDeleteit stinks. we have owed every year except this past year, and we are going to owe big time this coming year...booooo
ReplyDeleteOh taxes... Last year I owed nearly $10,000 due to my accountants mistake. I was very horrified and I just finished the monthly payments a couple of months ago.
ReplyDeleteoh no! atleast you are able to adjust it that much without it adding too much impact to your daily budget!
ReplyDeleteTaxes stink! It shouldn't be that hard to figure out what to pay in but they make it so complicated! Hope yours balances out.
ReplyDeleteSmart move checking it out early. Hope it breaks even for you.
ReplyDeleteI'm trying to save money this summer, but we need to travel & these airline fees are so outrageous! Even if I find cheap airline tickets, the fees add another 30% to the cost!
ReplyDelete