Why do I owe tax money?

I got my W-2 today and was excited to find out how much I was getting this year. After some investigation I found that I actually owe over $800 to the IRS! I would really like to know what went wrong. $21,010 was my total wages and only $254 federal withheld?? I don't understand why... could there be an error somewhere or maybe the company I work for made a mistake? I checked one of my pay stubs from 2008 and it looks like my place of employment was only taking out around $7 per check. The stub was from 10/24/08 and my year to date federal deductions added to only $220 at the time. My most recent stub (01/16/09) they are still only taking out around $10 for federal?? What should I do? Could this be my fault somehow? I'm so shocked and lost! Please help!!

Update:

I am married and 2008 was our first full year of being married. My wife doesn't work and I thought I claimed 0 but I could be wrong. I will double check with my employer.

Update 2:

CarVolunteer: I initially did it married filing separate.

Update 3:

Plus I checked my w4 and I had claimed 3. My mistake. I have no idea what I was thinking (or not thinking).

11 Answers

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  • Anonymous
    1 decade ago
    Favorite Answer

    You aren't having enough taxes withheld. You need to check the W-4 form you should have filed with your employer. Perhaps you claimed too many exemptions from withholding. It's possible your employer made an error, but you won't know for sure until you compare your W-4 to what was withheld.

    Normally, you don't want to have a large tax refund because that means you made a large interest-free loan to the federal government. But, in your case, it appears from the information you provided that you had so little withheld compared to your tax liability you may be subject to a penalty.

    Complete a new W-4 form for 2009 taxes. Your Human Resources office should be able to help you with this.

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  • Anonymous
    1 decade ago

    When you started working for your new company, they asked you to fill out a form W-4. You essentially told them how much to withhold when you completed that form. It is your responsibility to check your first paycheck and make sure it's enough.

    Those numbers sound right. I think you owe. I advise you to fill out a new W-4 and give it to your employer so that it doesn't happen again next year. You can leave everything the same and just add a specific dollar amount per pay period or you can change it to say single with no dependents.

    If you live in a state that has state tax, you should fill out that tax return too. Since it's only January, you can send the state tax return in first and if you are getting a state refund, use that to pay the $800 you owe. Otherwise, you've got until April 15th to save $800.

    Learn from your mistake.

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  • 1 decade ago

    Your employer should have a W-4 government withholding form on file for you that determines how much is taken from each check. Tell your employer you need a new one, since you can change your withholding at any time. The form has a box on it where you write in the number of exemptions you claim. The more you claim, the less money the government takes from each check. It's designed that way so people with families can hold onto more of their money with each check. If you're single and have no dependents, you can claim yourself as an exemption, though you'll probably still owe taxes at the end of the year. I always claim "0" and that assures me my tax liability is more than covered, so I always get a refund. Kind of a harsh way to learn how much the government sucks, isn't it?

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  • JSatt
    Lv 7
    1 decade ago

    When you fill out your W-4, they ask what kind of deductions you want to take (for yourself, kids, etc). I select 0 and have the maximum taken from my paycheck so that when I file my taxes, I get a nice refund every year.

    Something's definitely up with your W-4. It's too late to do anything about for your 2008 taxes, but it would be wise to change it as soon as possible.

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  • 1 decade ago

    If your total income (for both of you) was $21,010 (nothing besides your wages), and you file as married filing jointly, you would have a standard deduction of $10,900. You would also have 2 exemptions at $3,500 each for $7,000. This is a total of $17,900 that is not taxable. $21,010 - $17,900 = $3,110. The tax on that would be $311. $311 - $254 = $57 still owed. How did you get a total tax of over $1,000?

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  • 1 decade ago

    Based upon what you describe you are probably single with no dependents and taking the standard deduction.

    You need to increase your withholding. You do this by filling out form W-4 and, assuming that the above assumptions are correct, you would ask them to withhold at the 'single' rate with one (1) withholding allowance. This should correct your withholding for 2009 and you should not have this problem when you file for 2009.

    Richard K

    HR Block

    This advice was prepared based upon my understanding of the law in effect at the time it was written as it applies to the facts provided by you. See my profile for more details.

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  • 1 decade ago

    check your withholding. you're not having enough taken out of your check.

    unfortunately it's your responsibility, not your employer's, to make sure that payroll is taking out adequate amount for taxes.

    You'll likely have to file a new w-4 with your employer.

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  • 1 decade ago

    You need to go back to your human resources at work and find out what you put on your W4. It sounds like you care claiming to many exemptions throughout the year. I would go as soon as you can so if that is the case you can correct it now.

    Christine EA Master Tax Adviser

    Check out my profile

    Check the out the link below

    This advice was prepared based on our understanding of the tax law in effect at the time it was written as sit applies to the facts that you have provided. http://www.hrblock.com/taxes/tax_tips/index.html

    http://www.hrblock.com/taxes/tax_calculators/index...

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  • 1 decade ago

    It seems like to me that the government is not taking enough out for your federal. You should probably look into changing your w-4 for this year so they will take enough taxes out.

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  • if your single or have no kids or went exempt than thats way to much for a single person, i went over a lil this year. im single

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