MSU Red Cedar Message Board

I wouldn't worry about it. Tax cheats get to go to resort prisons, and usually get released early.

No.

Are you maxing out your 401ks? Too late for 2011, but you'll want to do that for 2012.

If one of you didn't contribute to a 401k, as someone else said, you might be eligible for an IRA contribution.

Not too many options at this point. You should've been looking at this in December when there was still room to maneuver.

You could also start making estimated payments to Uncle Sam now to lessen the impact later.

yes, we both max out 401ks

If your goal is getting a bigger return, then going to a CPA is probably not worth it.

If your goal is being able to hand someone a pile of paper, and not have to deal with filling out your own tax returns, then absolutely... go to a CPA.

The notion that there are thousands (or even hundreds) of dollars in hidden deductions that only a tax preparer can find in your return is mostly marketing bullshit from HR Block. Turbo Tax does a pretty good job of asking you about all potential deductions. Unless there is something you aren't sure about, you probably have it covered.

I'm not at all surprised to learn that two people working full time with no kids, both claiming 1 on their W4 owe money at the end of the year.

Like $5000?
Yeah, that qualifies as a shitload.

You sure you filled out the forms correctly?

actually a bit over that and i hope not.

Like i said, i assumed that claiming 1 would be fine without running the numbers for the year. Obviously a mistake and will make corrections for this year, like bumping us down to 0 at the least and maybe save on top of that for next year.

So, in terms of the payment agreements. How does that work? You can take as long as you want to pay it back at .5% a month?

One year I did my taxes on Turbo Tax and found out that we owed $3,000. I took it to a CPA. He charged $200 and I ended up owing $3,007. Stick with Turbo Tax.

Don't complain too much - I triggered AMT this year and only have 4 months of mortgage interest. Next year is going to blow.

Two Options:

1. pay the man

2. lie like a m'fer and don't pay a cent or get a huge refund

the situation you describe in not uncommon and as others have described is actually preferred by most. Your employers don't factor in your spouses are working. so each pay period they simply take your pay, multiply by number of pay periods, assume you take standard deduction and take the amount of exemptions you claimed. that puts you into a certain tax bracket and they withhold based on that. they do this by looking at a handy table. problem is your spouses income puts you in a higher tax bracket, so their little table is worthless and they withhold way to little.

But as long as you paid in/had withheld at least 90% of what you owe, there are no penalties and no interest when you file. just pay the balance in April and be done with it. I've been in this boat for 10 years and am fine with it. I'm not giving the govenment an interest free loan for 12 months like the rubes bragging about their big refunds.

So you make enough chedda to owe $5,000 in taxes in addition to the standard withholding, but don't have any cash on hand to pay it in April. Sounds like you have a spending problem, not a tax problem.

Unless you are loaded, it makes no sense you would owe a lot, if any at all. I am not a tax accountant (hate tax), but a Corporate Controller who does their own taxes. You should have someone look it over, shouldn't be that tough. I would even do it, but I would hope you wouldn't trust some creep on the Internet.

If you decide to have your taxes reviewed by someone, make sure they are an Enrolled Agent with the IRS. A CPA does not necessarily know tax law, but an Enrolled Agent must know tax law.
I found this out when I had a CPA do my taxes for a couple years. The CPA made mistakes on my Schedule E that cost me about $750 a year in returns. He wasn't taking depreciation from my rental home that he should have been.
Fortunately, since my brother owned a number of rental homes he knew the correct deductions and noticed that I wasn't taking the depreciation deduction. I was able to get most of the money back by filing amended returns.