Last year, I earned k with one exemption (me), while my wife earned about k with one exemption (her). Married filing jointly landed us a tax bill of 46 in addition to the 00+ we paid throughout the year in payroll deductions.
We both reduced our exemptions to zero. I earned k this year, she earned k. I ran the TurboTax return calculator, and again it says we will owe over a thousand dollars, after paying 00 in federal income deductions.
Is this the marriage penalty? We don’t have kids and can’t yet afford a mortgage due to student loan debt and various bonehead credit card balances from the past. I did pay 00 in student loan interest, but that doesn’t seem to make a dent.
What are we doing wrong? How can we owe so much in taxes? We claim zero exemptions, the only thing left for us to do is pay EXTRA each paycheck. That doesn’t seem right.
We have only lived in Washington state, there does not appear to be a renters credit available for us, nor is head of household an option.
We also both put 10% of our income into our employers’ 401k programs, which helps reduce our taxable income some, but not enough.
Your withholding is at fault. The W-4 is notorious for not taking out enough if you are married and make more than $50K in income.
MFJ $80K -1800 – 10,700 -6800 = 60700 tax = $8323.
MFS $41K -1800 – 5350 -3400 = 30450 tax= $4175
MFS $39k -5350 -3400 = 30250 tax =$4150
So, you come out almost exactly the same total as if you had still been single. (When there aren’t kids, MFS and single are pretty much the same at your level of income.)
And yes, the only solution is guesstimate 2x a year and add a lump sum to the W4. (To guesstimate, use last year’s forms or look at 1040es.)
The person with the most income should claim head of household and renters credit.. hope that will help yah out a little.
You can also try to claim 0 all year long and then when you file taxes, claim 1, this may help as well.
Have you recently moved to a different state? because sometimes you will be taxed in 2 states incorrectly and the turbo tax and H&R block will make a mistake.
I went to H&R block 2 years ago when I moved from Florida to Connecticut, they said I owed money I knew they made a mistake because I should have not owed anything, it turned out there program was charging me federal taxes in both states because I had 2 jobs during the year in different states, they corrected the problem and I got money back.
You probably need to do things. like volunteer and donate. did you max your deductions when using turbo tax.