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Old 02-18-2019, 03:10 PM #31
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Default Re: Is anyone owing money in taxes?

Quote:
Originally Posted by Mountaindewed View Post
Ok. Well maybe I donít know how they work. My W2 says I paid $800 in taxes last year. I thought it was like the lottery and if I made $11,000 then about $3,500 would have been taken out for taxes. Not just $800.
No....even what you are thinking is not how it works. Your W2 indicates how much was withheld from your check to cover taxes you may owe at the end of the year. It is NOT how much you OWE in taxes. As a matter of fact if you only earned $11,000 you probably owe no taxes unless you have some other income you get. Basically when your taxes are calculated for 2018, the government will have to repay you what you overpaid (maybe the whole $800)
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Is anyone owing money in taxes?



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Old 02-18-2019, 03:29 PM #32
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Default Re: Is anyone owing money in taxes?

Right... so here's my understanding.

The $12k personal exemption means that, for people who qualify for that (i.e. single, not claimed by someone else) - you do not pay taxes on the first $12k of income you earn in a year.

So, if you were to earn $20,000... when you do your taxes, there's actually a step on the form where you'd subtract out the $12,000 exemption. (It's an "exemption" because that part of your income is *exempt* from having to pay taxes, i.e. it's tax-free, and you don't pay anything for that first $12k.)

So in that case, you'd earn $20,000. Then you get the exemption, and subtract that out... so $20,000 - $12,000 = $8,000 - that's what you'd owe taxes on. In the old days, you'd have to look at a paper booklet that shows you what the tax rate is for $8000 of income, but now the computer does it.

Since you made $11,000, if you were doing it yourself, you'd see that there's a step where you subtract the exemption, so $11,000 - $12,000 (exemption), and get a negative number (-$1000). That means that none of your income is subject to tax.

In that case, if you've had any taxes taken out of your paycheck, you should get a refund of all that money. If they took out less money this year than less year, you may get less back, because you will only get back the money that you paid.

It's like this...

Your employer has to make an educated guess at what you're going to owe in taxes at the end of the year. You can influence this a little when you fill out the form (when you're hired) that talks about how many exemptions, etc, you have.

But, your employer makes their best guess, based on your salary and the form you filled out. Then, they take out enough money every month (and send it to the government for you) to pay that tax bill.

In a perfect world, that number would be correct - and you wouldn't owe anything more or get a refund. But because the tax law is so crazy, it's almost never going to be spot-on. So, when you actually file your taxes, the government looks at what you owe, based on everything: your income, your exemptions, anything that comes in to play.. and what you've already paid.

If you've paid more than you owe, you get a refund!

If you didn't pay enough, you have to make up the difference.

If you made $11k, and if you qualify for the standard exemption (single, nobody else can claim you as a dependent) - you won't owe anything, b/c your income is less than the exemption. So, anything you've already paid (from your job taking it out of your paycheck) will come back to you.

Note: this doesn't include money that your job took for other things, like social security, medicaid, local taxes, etc. Just the federal taxes.

It's going to be OK! Really, don't worry... and as I said, if you go to one of the online tools, you can actually fill in all the fields and get a better idea of how it works. The ones I've looked at are all free to put in your info and see the outcome, and because your taxes are pretty simple, they shouldn't take too long.

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Old 02-19-2019, 01:11 AM #33
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Default Re: Is anyone owing money in taxes?

Quote:
Originally Posted by Mountaindewed View Post
Ok. Well maybe I donít know how they work. My W2 says I paid $800 in taxes last year. I thought it was like the lottery and if I made $11,000 then about $3,500 would have been taken out for taxes. Not just $800.
How and why government would take $3500 in taxes from someone who only made 11000? No taxes donít work as a lottery. You likely will get all at least part of your taxes back as you donít make enough

Good for you by the way keeping part time job while on disability. Itís commendable. Just stop worrying about taxes
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Old 02-19-2019, 04:18 AM #34
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Default Re: Is anyone owing money in taxes?

Payroll taxes are much different than lottery taxes by far. I can comprehend why that might be in your thoughts.
Payroll taxes are spelled out in brackets. Your payroll coordinator would plug in a code for an estimated yearly amount to gauge how much of a percentage to withhold from your paycheck. With state taxes, it's the same method. I know that my state tax operates on a 5.1% margin with an elective of 5.85% for instance.
800 of 11K is 7.27%.

Lottery is around that 35% ratio.
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Old 02-19-2019, 04:56 PM #35
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Default Re: Is anyone owing money in taxes?

Thereís a lot more talk on the news. A lot more people are saying they are owing this year. Others are saying they are not. But I did find out today you can create a payment plan. So if someone did owe $10,000 (Iím not saying that I will) they wonít expect you to pay the whole amount back at one time. I thought you had to pay it all back at one time. That makes me feel better.
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Old 02-19-2019, 08:39 PM #36
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Default Re: Is anyone owing money in taxes?

Quote:
Originally Posted by Mountaindewed View Post
Thereís a lot more talk on the news. A lot more people are saying they are owing this year. Others are saying they are not. But I did find out today you can create a payment plan. So if someone did owe $10,000 (Iím not saying that I will) they wonít expect you to pay the whole amount back at one time. I thought you had to pay it all back at one time. That makes me feel better.
If you owe a lot you can pay in installments but theyíd charge you interest.

People owe when they for example work two jobs, have no dependents and make substantial amount of money
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Old 03-02-2019, 02:45 PM #37
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Default Re: Is anyone owing money in taxes?

So I looked at some past paychecks from 2018, and it looks like on the lower checks Iíve gotten they havenít been taking any federal taxes out. Zero. Iím pretty sure thatís an issue. I will know if Iíll owe anything in about 5 hours. Iíll keep you guys posted.
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Old 03-02-2019, 02:59 PM #38
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Default Re: Is anyone owing money in taxes?

Quote:
Originally Posted by Mountaindewed View Post
So I looked at some past paychecks from 2018, and it looks like on the lower checks Iíve gotten they havenít been taking any federal taxes out. Zero. Iím pretty sure thatís an issue. I will know if Iíll owe anything in about 5 hours. Iíll keep you guys posted.
No itís not an issue!

They take NOTHING out of low pay check because you donít make enough. How can you owe anything if you only make 11k??? I donít think you understand what everyone is telling you.

Many people already explained to you that if you make less than 12k a year you donít pay any taxes and whatever you paid will be returned to you. Itís becayse you make less than exemption of 12k.

People who make less than 12k pay ZERO taxes. Not sure why you keep repeating same thing? Itís like you donít read peopleís posts?
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Old 03-02-2019, 03:05 PM #39
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Default Re: Is anyone owing money in taxes?

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Originally Posted by divine1966 View Post
They take nothing out of low pay check because you donít make enough. How can you owe anything if you only make 11k??? I donít think you understand.
Iím sorry. I truly donít. They were taking a lot of money out for federal taxes and then they just stopped taking it out for the lower taxes in January 2018. My check yesterday didnít have any federal taxes taken out either. But at one time a lot of money was taken out. This is something recent.
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Old 03-02-2019, 03:06 PM #40
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Default Re: Is anyone owing money in taxes?

Quote:
Originally Posted by Mountaindewed View Post
Iím sorry. I truly donít. They were taking a lot of money out for federal taxes and then they just stopped taking it out for the lower taxes in January 2018. My check yesterday didnít have any federal taxes taken out either. But at one time a lot of money was taken out. This is something recent.
It doesnít matter. If they took taxes then money will be returned to you. If you paid no taxes you simply owe nothing. You donít make enough to pay any kind of taxes.
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