How do so many get money back on their taxes?

[Gingersnap]

We have way under the exemptions we are suppose to claim on my dh's paycheck. When we work the W4 form, it shows that we should have 9 exemptions. We claimed only 7 and still ended up owing. We filed on the standard deduction, no itemizing. We do not qualify for EIC either. We get one child tax credit only. What are we doing wrong? Is there another credit of some sort I am missing? I don't want to pay the big amount at H & R Block to have them look at my return to see if I did it right. I just can't afford that.

Any suggestions? TIA

[Blue Hen]

Interest paid on home mortgage

Gains and losses from selling stocks

Charitable contributions

Those are some items that have affected our tax payment.

[Old Dominion Heather]

I think it is called Pro-tax or Tax-pro or something like that. You just fill in the blanks. We almost always do better when we itemize deductions. Are you claiming yourselves as exemptions? How much is being withheld from your paycheck? We have a lot withheld, so that we don't end up paying since dh works on the side and none of that is withheld.

[KH_]

We have it so we end up owing a bit on state taxes and get some back on Federal (but not a lot). Our big deductions are charitable giving and interest on our mortgage and student loans.

You might try filling your taxes out at Tax Act Online - they don't charge you to use the site, only when you actually file the taxes (I file my taxes through them). But it might be helpful to see if you're missing anything that might cut down on the taxes you're having to pay.

http://www.taxactonline.com/

[Scarlett]

I've used the H&R Block on line and it figures everything for you. I love it. It only costs $50 for Fed/state combined and that includes E-filing.

It even walked me through the steps to see if we were required to pay that stupid AMT....I had heard it was pretty complicated so for some strange reason I figured it myself off of the IRS website and got the same answer that H&R Block got. (except that it took me 4 times as long and then I had a headache. :))


How many kids do you have? 7 exemptions seems like a lot. We always get lots of money back. Mostly due to dh's bonus which is taxed at a high rate initially (when the check is issued).

[Robin in Tx]

If you take what your total tax bill was for 2007, your employer should be able to help you (with the aid of tables) come up with a more accurate exemption status for your W-4 which will help you break even at the end of the year. If you have only one child and no itemized deducations (mortgage interest, etc), then I don't see how you came up with either 9 *or* 7 exemptions. If you don't want to owe at the end of the year, you need to increase your monthly deduction. You need to do this anyway, because you can be penalized by the IRS for under withholding.

HTH,
Robin

[Deece in MN]

We have way under the exemptions we are suppose to claim on my dh's paycheck. When we work the W4 form, it shows that we should have 9 exemptions. We claimed only 7 and still ended up owing. We filed on the standard deduction, no itemizing. We do not qualify for EIC either. We get one child tax credit only. What are we doing wrong? Is there another credit of some sort I am missing? I don't want to pay the big amount at H & R Block to have them look at my return to see if I did it right. I just can't afford that.

Any suggestions? TIA

Are you saying that you get a tax credit for 1 child only? If this is the case you should change your exemptions. You are taking too many exemptions and so not enough taxes are taken out during the year.
Do you not own your home? Usually mortgage interest will help to itemize and take more than the standard deduction.

Anyway, you need to change your exemptions until you find the number that will come out as close to even as possible.

We have 2 dc and my dh claims 5 on his W-4. We end up with a refund on our federal taxes. We sometimes have to pay into state, it depends on how much I spend on hs'ing supplies (our state allows a deduction/credit for school expenses).

Do you use a tax software or use the paper forms? Using a tax software may help you get all the deductions you should be taking and won't cost as much as going to H&R Block or some other place.

[GLOWAcademy]

I've used the H&R Block on line and it figures everything for you. I love it. It only costs $50 for Fed/state combined and that includes E-filing.

It even walked me through the steps to see if we were required to pay that stupid AMT....I had heard it was pretty complicated so for some strange reason I figured it myself off of the IRS website and got the same answer that H&R Block got. (except that it took me 4 times as long and then I had a headache. :))


How many kids do you have? 7 exemptions seems like a lot. We always get lots of money back. Mostly due to dh's bonus which is taxed at a high rate initially (when the check is issued).

Scarlett do you have a link ?

[Gingersnap]

Interest paid on home mortgage

Gains and losses from selling stocks

Charitable contributions

Those are some items that have affected our tax payment.

We don't have stocks. We didn't get receipts for our charitable giving. Dumb, I know but even in the past we never gave enough to itemize. Our interest on our home mortgage is never enough to itemize. Why? I don't know.

[Gingersnap]

I think it is called Pro-tax or Tax-pro or something like that. You just fill in the blanks. We almost always do better when we itemize deductions. Are you claiming yourselves as exemptions? How much is being withheld from your paycheck? We have a lot withheld, so that we don't end up paying since dh works on the side and none of that is withheld.

We had 7 exemptions on dh's paycheck but claimed only 4 on our taxes. As there are only 4 of us. I did do the taxes thru the free tax site online. We qualified just barely for free taxes.

[Gingersnap]

We have it so we end up owing a bit on state taxes and get some back on Federal (but not a lot). Our big deductions are charitable giving and interest on our mortgage and student loans.

You might try filling your taxes out at Tax Act Online - they don't charge you to use the site, only when you actually file the taxes (I file my taxes through them). But it might be helpful to see if you're missing anything that might cut down on the taxes you're having to pay.

http://www.taxactonline.com/

We have no student loans. I did do my taxes for free thru the IRS website that they listed. I just can't help but think I'm doing something wrong somewhere.

[Cadam]

We use Turbo Tax. Our goal is to not get anything back and to not owe anything. This year we owe a little because my dh did side work and didn't pull the taxes out at the time. If I get a bunch of $$ back it just means that I have been allowing the govt. to hang on to my money and gain interest on it for months. no thanks.

[Bev in B'ville]

As a partner in his firm with offices through the U.S. we end up paying state taxes in every state (except Florida and Texas) and we pay quarterly taxes. About this time every year, I write a nice 6-figure check to the IRS. And, no, we are not wealthly by any stretch of the imagination. I can't remember the last time we actually got money back from the government. If only we had proportionally as much say in how our money was spent.

Let's hear it for Neal Boortz's Fair Tax Plan!

[Gingersnap]

I've used the H&R Block on line and it figures everything for you. I love it. It only costs $50 for Fed/state combined and that includes E-filing.

It even walked me through the steps to see if we were required to pay that stupid AMT....I had heard it was pretty complicated so for some strange reason I figured it myself off of the IRS website and got the same answer that H&R Block got. (except that it took me 4 times as long and then I had a headache. :))


How many kids do you have? 7 exemptions seems like a lot. We always get lots of money back. Mostly due to dh's bonus which is taxed at a high rate initially (when the check is issued).

We have 2 children, only 1 of which is under 17. The W4 says we should have 9 exemptions on dh's check. 1 for each of us, 1 extra for me because I don't work and 2 for each of the children. That's 9. We only claimed 7 on his check and still ended up owing.

[PariSarah]

We don't have stocks. We didn't get receipts for our charitable giving. Dumb, I know but even in the past we never gave enough to itemize. Our interest on our home mortgage is never enough to itemize. Why? I don't know.

What are the rules on receipts these days? I thought you only needed a receipt when the individual gift was over a certain amount.

And our mortgage interest isn't enough, by itself, either. But combined with our charitable giving and our medical expenses, this year, for the first time ever, our itemized deduction is just an ooch over the standard deduction.

[Gingersnap]

We use Turbo Tax. Our goal is to not get anything back and to not owe anything. This year we owe a little because my dh did side work and didn't pull the taxes out at the time. If I get a bunch of $$ back it just means that I have been allowing the govt. to hang on to my money and gain interest on it for months. no thanks.

I don't really want a bunch back but I would like to NOT owe for once. It's frustrating to constantly owe every year even thought we brought our exemptions down on his check. We still ended up owing $500.

[Gingersnap]

What are the rules on receipts these days? I thought you only needed a receipt when the individual gift was over a certain amount.

And our mortgage interest isn't enough, by itself, either. But combined with our charitable giving and our medical expenses, this year, for the first time ever, our itemized deduction is just an ooch over the standard deduction.

It was my understanding that we had to have receipts for all giving. I have none. My mortgage interest was $3000 so not enough. I did have alot of medical I paid for this year but the deductible of over $1000 is not allowed to be claimed so that knocks off over $1000 of what I paid out leaving me still with not enough.

[Gingersnap]

Are you saying that you get a tax credit for 1 child only? If this is the case you should change your exemptions. You are taking too many exemptions and so not enough taxes are taken out during the year.
Do you not own your home? Usually mortgage interest will help to itemize and take more than the standard deduction.

Anyway, you need to change your exemptions until you find the number that will come out as close to even as possible.

We have 2 dc and my dh claims 5 on his W-4. We end up with a refund on our federal taxes. We sometimes have to pay into state, it depends on how much I spend on hs'ing supplies (our state allows a deduction/credit for school expenses).

Do you use a tax software or use the paper forms? Using a tax software may help you get all the deductions you should be taking and won't cost as much as going to H&R Block or some other place.


Well, we did lower our exemptions from 9 to 7 for last year hoping that would make the difference but we still ended up owing this year. We went back in a couple of weeks ago and lowered it to 6 this time hoping that next year we might break even. Our state does not allow a deduction for homeschooling supplies. That would be so nice though if they did. Yes, I use an online tax software off the IRS website. We just barely qualified for ours to be done free. Yes, we own our home but it's never enough to claim in interest.

[tess in the burbs]

We did H & R block for years but had many returns have to be redone the next year b/c they made too many mistakes. AND they charge for every little thing....like our stock interest is $7.10 a year and they charged $40 for the form to show that tiny amount!

Now we use Turbo Tax. It's free until you want to file or print. I paid $60 for both federal and state. It imports last years info for you when you use them multiple years. It has things I didn't know about on it, so it's very thorough.
They also have forums and a way to ask questions if need be.

If you go through deductions but it isn't enough it explains why and then puts the standard in for you.....same for the medical part and a few others that have minimum amounts.

it's worth at least doing it on your own before going to see a professional so you have an idea of what you will owe or get back. And for 3 years straight I did it on turbotax but then went to H&R block and they came out with the same #'s as I did at home...so then we decided I would just use Turbo tax from then on.

[Scarlett]

Scarlett do you have a link ?


Yep. http://www.hrblock.com/

Soooo....easy. When you log in , all of your info is already in there..you just have to confirm. (after your first year of course)

[Scarlett]

Now we use Turbo Tax. It's free until you want to file or print. I paid $60 for both federal and state. It imports last years info for you when you use them multiple years. It has things I didn't know about on it, so it's very thorough.
They also have forums and a way to ask questions if need be.

If you go through deductions but it isn't enough it explains why and then puts the standard in for you.....same for the medical part and a few others that have minimum amounts.


This is just how the H&R Block on line is. I've never had a problem.

[angela in ohio]

We have 2 children, only 1 of which is under 17. The W4 says we should have 9 exemptions on dh's check. 1 for each of us, 1 extra for me because I don't work and 2 for each of the children. That's 9. We only claimed 7 on his check and still ended up owing.

Why are you putting 2 for each child? That would only be if you are getting the child tax credit for them, so that would only be for one child.

[Amy in NH]

You aren't taking enough out, plain and simple. Only one child under 17 does not make 7 or 9 exemptions.

I know many people disagree with what we do, but here it is. My dh claims Single-0 on his W-4 so we have the maximum taken out. It is like a forced savings account for us. We use our tax refund to buy new (used) vehicles or make improvements on our home, plus purchase curriculum. If we had access to this money throughout the year in dh's paycheck, or even in our own savings account, it would get eaten up by the budget.

Plus we have four children under 17, and although we are just barely over the income level to get the Earned Income Credit, we do get the Additional Child Tax Credit. Since I am a student, we also get the Tuition Credit. And this year we put some insulation in our house and changed out an entry door, so we were able to get the Residential Energy Credit. We also take the Standard Deduction - we don't have enough deductions to itemize.

We Free File our taxes through the IRS website and it really is free. The free file vendors walk you through the steps, so it's not like you have to know what you're doing (even though I did used to work for H&R Block). But, of course, that won't help you take more out of each paycheck. You'll have to change your dh's W-4 if you don't want to end up paying at tax time.

[freethinkermom]

We always get a federal rebate which I use to pay our state taxes. We never get to keep any. I have to itemize in order to reduce the hit from the state. It was a big shock the first year we paid taxes here. When we lived in CA we always got a refund from both state and federal. Of course, we make a lot more now (not a lot total, but a lot more than we did back then), so that hurts come tax time too.

[Gingersnap]

Why are you putting 2 for each child? That would only be if you are getting the child tax credit for them, so that would only be for one child.

You're right. I never noticed that. So, we would get 4 for the 4 of us, 1 additional for me as I don't work, and 2 for the child we have under 17, right? A total of 7? But, we still owe at 7 exemptions so that can't be right either.

[NicksMama-Zack's Mama Too]

We had 7 exemptions on dh's paycheck but claimed only 4 on our taxes. As there are only 4 of us. I did do the taxes thru the free tax site online. We qualified just barely for free taxes.

..

[Gingersnap]

You aren't taking enough out, plain and simple. Only one child under 17 does not make 7 or 9 exemptions.

I know many people disagree with what we do, but here it is. My dh claims Single-0 on his W-4 so we have the maximum taken out. It is like a forced savings account for us. We use our tax refund to buy new (used) vehicles or make improvements on our home, plus purchase curriculum. If we had access to this money throughout the year in dh's paycheck, or even in our own savings account, it would get eaten up by the budget.

Plus we have four children under 17, and although we are just barely over the income level to get the Earned Income Credit, we do get the Additional Child Tax Credit. Since I am a student, we also get the Tuition Credit. And this year we put some insulation in our house and changed out an entry door, so we were able to get the Residential Energy Credit. We also take the Standard Deduction - we don't have enough deductions to itemize.

We Free File our taxes through the IRS website and it really is free. The free file vendors walk you through the steps, so it's not like you have to know what you're doing (even though I did used to work for H&R Block). But, of course, that won't help you take more out of each paycheck. You'll have to change your dh's W-4 if you don't want to end up paying at tax time.

We did change it to 6 and hoping we will break even next year. We had 7 and ended up owing.

[NicksMama-Zack's Mama Too]

We did H & R block for years but had many returns have to be redone the next year b/c they made too many mistakes. AND they charge for every little thing....like our stock interest is $7.10 a year and they charged $40 for the form to show that tiny amount!

Now we use Turbo Tax. It's free until you want to file or print. I paid $60 for both federal and state. It imports last years info for you when you use them multiple years. It has things I didn't know about on it, so it's very thorough.
They also have forums and a way to ask questions if need be.

If you go through deductions but it isn't enough it explains why and then puts the standard in for you.....same for the medical part and a few others that have minimum amounts.

it's worth at least doing it on your own before going to see a professional so you have an idea of what you will owe or get back. And for 3 years straight I did it on turbotax but then went to H&R block and they came out with the same #'s as I did at home...so then we decided I would just use Turbo tax from then on.

..

[Amy in NH]

I haven't looked at a W-4 for a long time, but I think you're figuring it wrong.

I could understand 1 for each of you, plus 1 extra for the child tax credit. That would make 5, right?
Then *maybe* you won't end up paying next year.

[Gingersnap]

You know what would be nice? If the W4 form could be worked and actually turn out accurate. It is not accurate or we could claim 7 like it comes up to and break even. But, we ended up owing at 7. We did change it to 6 a couple of weeks ago. Hopefully, next year... we will be okay.... thanks everyone.

[Gingersnap]

I haven't looked at a W-4 for a long time, but I think you're figuring it wrong.

I could understand 1 for each of you, plus 1 extra for the child tax credit. That would make 5, right?
Then *maybe* you won't end up paying next year.

It also says to claim 1 for me as I don't work outside the home. That makes 7 and we end up owing.

[Amy in NH]

Oh! I meant you aren't having enough *payroll taxes* taken out. I think you are thinking about the exemptions wrong! Have you ever seen a payroll tax table?

The more exemptions you claim, the *less* withholding taxes are taken out of your dh's check each week. So if you claim 7 exemptions, they are taking out very little taxes each week to go toward your yearly tax liability. And if you claim Married 7 exemptions on your W-4, you will have a lot less taken out than if you claimed Single 7. To have the maximum amount on the payroll tax table taken out, you would claim Single 0, and then you can elect to have even more payroll taxes taken out each week in a specific dollar amount.

I don't know if that helps you at all...

[Gingersnap]

Oh! I meant you aren't having enough *payroll taxes* taken out. I think you are thinking about the exemptions wrong! Have you ever seen a payroll tax table?

The more exemptions you claim, the *less* withholding taxes are taken out of your dh's check each week. So if you claim 7 exemptions, they are taking out very little taxes each week to go toward your yearly tax liability. And if you claim Married 7 exemptions on your W-4, you will have a lot less taken out than if you claimed Single 7. To have the maximum amount on the payroll tax table taken out, you would claim Single 0, and then you can elect to have even more payroll taxes taken out each week in a specific dollar amount.

I don't know if that helps you at all...

Yes, I understand all that. I know its apparent we need more taken out or we would not owe every year. We knocked the exemptions down to 6 now instead of the 7 we had hoping that will help. Thanks for your help.

[Scarlett]

I have no idea what dh claims on his W4....but we are getting $9K back. I don't care though. I know it is all anti-Dave Ramsey's way, but we need the 'forced savings' avenue as someone else mentioned. If we need it for something, we use it, if we don't, we use it for a vacation.

[Amy in NH]

If you wanted to claim an exemption for not working outside the home then it would be 1 for each of the 4 of you, and one extra for the child tax credit, and one extra for you not working. That would make 6, not 7.

[mamato3 all-boy boys]

Our family goal is to not let the government hold our money for us -- we'd rather take it to reduce debt, save, etc. So, for us, getting a very small return is our goal.

Several times during the year (usually right after I figure our taxes, mid-summer and sometime in November), I run dh's paystub through the IRS Withholding Calculator (http://www.irs.gov/individuals/article/0,,id=96196,00.html) You can plug in your itemized amounts from the previous year, or just stick with a standard deduction. It will then tell you how much you would owe/ get back at the end of the year based on those figures. And, they'll advise you on how many deductions to claim, and you can even print out a new form, hand it to hubby (have him sign it!), and turn it in at human resources. I've been known to hand dh a new withholding form mid-year to make our tax return as close to zero as possible.

[Melissa B]

Ours comes simply from the interest we pay on our mortgage. It is much higher than the standard deduction.

[Gingersnap]

If you wanted to claim an exemption for not working outside the home then it would be 1 for each of the 4 of you, and one extra for the child tax credit, and one extra for you not working. That would make 6, not 7.


I must be messing up on the line that says to take 2 additional out for any child that gets the child tax credit. I give the 4 then the 1 for me not working then 2 additional for the child tax credit. I bet that's where I've messed up. I guess it's only supposed to be 1 additional for the child rather than 2 like it reads on the W4 form.

[Quiver0f10]

I think it also depends on income. We don't have a large income and we have our withholdings at 15 and there is almost 0 federal taken out of DH's check, but we qualify 8 of our children for the tax credits. We end up getting a large check.

[Karen sn]

Gingersnap - I pay my CPA $59 and it's e-filed or something that has it back to us in under 2 weeks. There are many ways to work the numbers and you have to know what you are doing. My best friend was on the phone helping me help my neighbor and she said my neighbor was eligible to do this one thing on the form that we had no clue about - neighbor got back A LOT more money because of it.
I have sent all my friends to this man - they get more money back and continue to use his services year after year.

[angela in ohio]

One other possibilty is that your dh's work is withholding incorrectly. Not all payroll people are good at tax issues. :)

[Gingersnap]

I think it also depends on income. We don't have a large income and we have our withholdings at 15 and there is almost 0 federal taken out of DH's check, but we qualify 8 of our children for the tax credits. We end up getting a large check.


Can I have a couple of your kids for my taxes? lol

I'm glad you are getting a nice check back. Happy spending! :)

[Gingersnap]

One other possibilty is that your dh's work is withholding incorrectly. Not all payroll people are good at tax issues. :)


This could be true also.

[Gingersnap]

Gingersnap - I pay my CPA $59 and it's e-filed or something that has it back to us in under 2 weeks. There are many ways to work the numbers and you have to know what you are doing. My best friend was on the phone helping me help my neighbor and she said my neighbor was eligible to do this one thing on the form that we had no clue about - neighbor got back A LOT more money because of it.
I have sent all my friends to this man - they get more money back and continue to use his services year after year.

I would LOVE to find someone that would only charge $59! They all charge much more than that around here.

[NicksMama-Zack's Mama Too]

We use Turbo Tax. Our goal is to not get anything back and to not owe anything. This year we owe a little because my dh did side work and didn't pull the taxes out at the time. If I get a bunch of $$ back it just means that I have been allowing the govt. to hang on to my money and gain interest on it for months. no thanks.


Same here. I don't like to get anything back either. I'd rather have the money every payday (especially since my dh has 20% allocated to his 401K:eek:) than let the government have it. I'm not sure why everyone gets excited about the government giving them back their overpayment once a year.

[Quiver0f10]

Can I have a couple of your kids for my taxes? lol

I'm glad you are getting a nice check back. Happy spending! :)


No way :D

[Plaid Dad]

We're poor. Really. We're self-employed and so have to pay all the associated taxes, but our income is so low that we always get a refund.

[Tutor]

We're poor. Really. We're self-employed and so have to pay all the associated taxes, but our income is so low that we always get a refund.

Redistribution of wealth. :(

[Mrs Mungo]

I'd love to set it so that we don't owe anything but get very little back. However, it's hard to figure out from year to year. We're getting a fairly big refund this year because he had 6 months of non-taxable income. It's hard to predict.

[Eliana]

We use the withholding calculator on the IRS site too - the form always had our withholdings too low. We're still getting a refund this year, but that is b/c my husband got a lump sum dispersement from which tax was automatically withheld, and we're getting it all back now.

I like to do a reassurance check mid-year where I basically run all the numbers we have the first half of the year and the projections for the rest as if I were doing our taxes right then. This gives me either reassurance that we're withholding correctly, or warning that we need to be concerned - though since the tax laws change, it isn't completely accurate.

Eliana

[Gingersnap]

No way :D


Somehow.. I knew you would say that. LOL

Can't blame me for trying!

[Kari C in SC]

Somebody on this board figured out how much said interest you are actually losing by letting the government keep your money for a year. It was like under $50. It really is a tiny amount in the long run. For us, we would rather get a large refund. It is a forced savings. We have used it many times for large household purchases and a few times for vacations. We are actually pretty good about saving, but I still prefer that tax return. My dh claims O on his W-4 and then we had interest for 2 houses to deduct.

[WagsWife]

We have way under the exemptions we are suppose to claim on my dh's paycheck. When we work the W4 form, it shows that we should have 9 exemptions. We claimed only 7 and still ended up owing. We filed on the standard deduction, no itemizing. We do not qualify for EIC either. We get one child tax credit only. What are we doing wrong? Is there another credit of some sort I am missing? I don't want to pay the big amount at H & R Block to have them look at my return to see if I did it right. I just can't afford that.

Any suggestions? TIA

If you only have one child qualifying for the child tax credit then I would say 7 exemptions is to much. The more exemptions you claim on your pay the more money you have in your paycheck...but that also means less money is being set aside to pay your taxes. When you lower the exemptions down they take more out of your pay, but you pay less at tax time...or you may get a refund for paying too much through the year. I am not a tax expert by any means, but *I would lower your exemptions down to around 4 if you can afford that in your pay. We have 5 in our family with I believe 9 exemptions. We did that because it gave us extra money in our pay so we could use it for some investments. The fact that we had 3 children gave us enough tax credit to make it so we still get a decent return (normally about $3000)...this year however, we got about $900 less. Those extra exemptions are starting to catch up to us as my husbands pay goes up. We use this money to pay for our school books so I want to make sure we do not get any surprises in the future, so my dh is going to lower our exemptions back down to around 6.

[Renee in FL]

I think it also depends on income. We don't have a large income and we have our withholdings at 15 and there is almost 0 federal taken out of DH's check, but we qualify 8 of our children for the tax credits. We end up getting a large check.

Same here (for past years) - we get $0 taken out and get roughly $4K back each year. LArge family + low income = Large Refund (of money we never paid in.)