Tax Season

Well with tax season just about ending. I've seen several different situations from young to old, form owing a lot to receiving a big refund. I want to go over the odd situations that just don't make sense to some people. Now I think the goal is to always try to get as close to zero as possible. I always want to say a lot of people get frustrated when their told that they owe money. People seem to be so shocked. Once you've seen your tax return final number adjust it on your W-4. You can add additional withholding. You can also adjust your deductions. Maybe you want to claim an additional deduction to lower your refund or maybe you want to take away a deduction to withhold more tax.


One Lower One Higher

Employers look at peoples withholding individually. They look at your income and your W-4 and withhold based on that. When there is such a discrepancy in income that people are in different tax brackets is the lower income person is under withheld, because he's being withheld what tax bracket he would be in not their combined income tax bracket. Can you file married filing separately, yes. Actually usually married filing joint is better in these situations. It's really going to be based on how many itemized deductions you have. Lets say one person is retired and one person is still working. The working person makes more then the retired person. They are likely to owe. I would have then withhold more. It really doesn't matter who.

One High One None

Maybe it's a stay at home dad. Lets say one person is working and one person is in school. I would have the worker claim an additional withholding, because when they go to file it's almost like having a dependent. Now additionally when you have income from another source that is rather small. If you receive a one time check your likely not to get anything withheld. Which in their case would lower their income, because nothing is being withheld. I would say that's a good thing though.


It's not a bad thing to owe just as long as you can pay it. A lot of people struggle saving. Maybe you don't want to save by adding to your retirement. Maybe you want to get to the money soon. A good way of doing that is adding $50, $100, or more to additional withholding on your W-4. You'll receive it in a refund. Now if you don't have a problem saving and would rather put your money in the market or bank and make a little something. Try to lower your refund number. If you can pay there's nothing wrong with owing. Now personally I've found that the people that have owed a decent size amount. It is very stressful.