Tax Question: - Anaheim,CA

So many figures left out here but a few things you need to understand, withholding is not paying your taxes.

What is your gross income. If it is under 100,000 something is going wrong when you prepare your taxes. Are you itemizing with just your IRA because, well that would be stupid. Your deductions should be higher than the standard deduction before you itemize.

Anyway, if your taxes are this screwed up get an accountant. They may charge you a couple hundred but it sounds like you are over paying your taxes by a lot more.

You really don't want to get a return. If you get a big return, that means you gave the government too much of your money and they used it interest free for the year. If you're using the return as a savings account, or "bonus" at the end of the year, that only helps the government, not you.

If you're not owing anything at the end of the year and you aren't getting a big chunk back at the end of the year then I wouldn't mess with it. It means you have it balanced out and you have more of your money in your bank account throughout the year instead of the government putting it in their bank account not earning you any interest. If you are planning yearly expenditures based on getting a return you are doing it wrong. Put that same money aside in your savings account, earning you the interest so you have the yearly amount.
I wish we could get ourselves balanced out enough so we don't loan the goverment large amounts of our money interest free that we could be earning our own interest in if it were in our own bank account. But things keep fluxuating too much for us and we can never guess it right. At least we don't owe so I'll take it for now LOL
You owe a set amount of taxes per year, anything you pay of your own money above that amount they give back to you. That is all a refund is. If you paid $10 for something at a store and it was actually $7 they refund the $3. The difference is the government keeps any over payment for the entire year.

<scratches head>
You WANT to have too much taken out of your check so you can get it back later?
That's what savings accounts are for!

What's included in that 25% number? Are you including all your deductions in there - FICA, State, Federal withholding? Are you including 401k deductions or Medical insurance premiums? (If i looked at total withholdings on my check, it's about 45%.) Focus just on the Federal Withholding line item. If you make under $75k per year, if you have that number set at about 10% of your gross wages you should be more than good for withhholdings.

I'm sssssssoooo confused!!!

If you have kids - don't you use their child care as a deduction?
What about mortgage interest?
What about education expenses?
What about donations?

You kinda contradict yourself....you want money back or close to zero? Which is it?

You do realize that money taken out of your paycheck is social security, state taxes, federal taxes and medicare, right?

Sit down with a tax accountant. Bring ALL of your income statements and at least 5 years in past tax returns. Tell them what your goal is. Then work with them to find out just what you need to claim - married, single, etc.

Good luck!

All I know is that when you fill out the w2, the higher the number total deductions, the less taxes they take out. I have always just put 0, had the max taxes taken out of my check, and then get it back at tax return time. Hope this helps

I'd say your tax person is missing some deductions. If you were married and filing together and he's paying in too you should have gotten something back. That just sounds odd to me too.

As a tax professional, your goal should be that when you file your tax return you and the government should be even (i.e., you don't owe them and they don't owe you). If the government owes you, you've given them an interest free loan. IMO, you should not use the government as a savings account.

When you say that you have 25% of your paycheck withheld, is that all federal income tax withholding? or are you also considering the withholding that goes towards Social Security and Medicare (because those items don't go to paying your income taxes.)

I don't have enough information from your post, but it seems like you and your hubby need to sit down (or hire a tax accountant) and prepare an estimate of what your taxable income and liability is going to be for 2013. Once you know what the estimated liability is going to be for the full year, you can determine how much you and your husband need to have withheld from your paychecks each month and what you should put on your Form W-4 to ensure that your company withholds the right amount. I can tell you that sometimes even electing "single" status isn't enough to get to the right withholding amount - you may have to ask your company to withhold an additional $ amount from each paycheck (which you can also designate on the W-4.)

The IRS has a tax withholding calculator that will use the details of your life to suggest a withholding number. You can even print the form to turn in to HR.

It is currently not available as they update things, but check back in a few days. http://www.irs.gov/Individuals/IRS-Withholding-Calculator

The ultimate goal for your tax return is to get as close to $0 as possible. Not owing, but not having a big refund from over-withholding either.

The best-case-scenario and ultimate end goal of doing your taxes each year is that you get as close to $0 returned and that you get as close as possible to having to pay $0 back to the government.

I suggest that you hire a (new?) accountant if you feel things are not right.

We would like to help you, but it's difficult to understand what you're asking. First you say your concerned because you don't get "$ returned", but your question is "what do I do to make my tax obiligation close to 0"? It would seem that your tax obligation is currently close to 0. Or is it that you need to pay at year end?

Also, since you are married, you need to consider both hubby's income and your income when choosing the number of deductions on your W4.

It can be very difficult to figure out because tax laws are constantly changing.

You really should consult a professional tax advisor.

You definitely need to talk to your accountant. You want your withholdings to come as close to your tax liability as possible -- you don't want a big refund because you are giving the IRS a tax-free loan. The penalty for overpaying your taxes is just that, a tax-free loan to the govt. There is however, possibly a penalty for underpaying. Also, it sounds from your followup that you and your husband file separate returns. WHY?. I suppose there could be good reasons, but most of the time it's better to file a joint return -- another question to ask your accountant about.