Help - owe $10,000!!

  1. You have chosen to ignore posts from MHMcL14. Show MHMcL14's posts

    Help - owe $10,000!!

    Hi, Any advice would be great. My husband and I are married, filing jointly. Last year we made $251,000 and in the end owed $354. This year we made $322,000 but in the end owe $9,950! Is this possible? Or did we make a mistake somewhere? There are no mjaor changes this year - no new babies, property bought or sold, moves etc. We did our taxes ourselves with H&R Block online, but is it worth hiring an accountant? We are panicked! Thank you for any thoughts.
     
  2. You have chosen to ignore posts from MASocietyofCPAs. Show MASocietyofCPAs's posts

    Re: Help - owe $10,000!!

    In Response to Help - owe $10,000!!:
    [QUOTE]Hi, Any advice would be great. My husband and I are married, filing jointly. Last year we made $251,000 and in the end owed $354. This year we made $322,000 but in the end owe $9,950! Is this possible? Or did we make a mistake somewhere? There are no mjaor changes this year - no new babies, property bought or sold, moves etc. We did our taxes ourselves with H&R Block online, but is it worth hiring an accountant? We are panicked! Thank you for any thoughts.
    Posted by MHMcL14[/QUOTE]

    You are subject to the change in brackets.  Last year you were just beginning to be in the 33% bracket, this year your top $110,000 is being taxed at 33%.  Assuming that both of you work, your withholding is being calculated as if each person's salary was the only income earned by the couple.  Therefore your withholding is based on being in the 28% bracket, and is reduced by the lower brackets as well. 

    The tax withholding tables are generally low if you have two married people making approximately equal salaries.   Therefore, to avoid this for 2012, you will want to adjust your withholdings by either claiming no exemptions, claiming single not married or haveing an extra amout withheld each pay period.   

    I hope this expains why you are owing more this year and provides a way to avoid the issue next year.

    Barbara Damon, CPA
    Tax Manager
    Edelstein & Company, LLP
     

Share