FEDERAL TAXES. Why do I owe big bucks?

[DallasTexas]

I had to pay $9k last year, retired, Pension, SS income+IRA withdrawals, just 2 of us +2 disabled dependents.

 

[Ws6]

Why have been paying over three grand the past few years!
I
I claim -ZERO_ allowances (exemptions M0) and have no extraordinary extra dividend income ( under 2K)

Married filing Jointly, took the 24K STD deduction since I have low mortgage interest.

My Wife works too; we ear n about the same with our combined income in the low 100's, We each put around 10% into tax deferred 401K.

Now IRS wants to penalize me for inadequate withholding. I took NO ALLOWANCES! W4 Claimed M0 on both earners.

Anyone else in the same boat?

That's wild. My income is similar, and I usually get a few hundo back. I am single and can't even file HoH.

 

[Wolf359]

That's wild. My income is similar, and I usually get a few hundo back. I am single and can't even file HoH.

Nothing like similar threads to bring back old ones.

You guys are wacked. I always like to owe money at tax time with no penalty. Better than getting a refund. A refund meant you gave the government an interest free loan. Rather be able to invest it and pay at the end. Instead of me giving them an interest free loan, I got an interest free loan.

 

[Ws6]

Nothing like similar threads to bring back old ones.

You guys are wacked. I always like to owe money at tax time with no penalty. Better than getting a refund. A refund meant you gave the government an interest free loan. Rather be able to invest it and pay at the end. Instead of me giving them an interest free loan, I got an interest free loan.

It goes either way by a few hundo. I don't stress too much under 1k.

 

[Andrew1972]

Nothing like similar threads to bring back old ones.

You guys are wacked. I always like to owe money at tax time with no penalty. Better than getting a refund. A refund meant you gave the government an interest free loan. Rather be able to invest it and pay at the end. Instead of me giving them an interest free loan, I got an interest free loan.

Tax period is only one year and "investing" for one year carries a serious amount of risk if any appreciable return will come around in that time period. Reality is you are not exactly investing the money as you have it sitting somewhere available liquid.

 

[demarpaint]

A good account can be worth his or her weight in gold.........

 

[wag123]

If They send me a bill - I'm ignoring it.

This is a very bad idea. Ask me how I know.
The IRS will get their money, one way or another.

 

[Wolf359]

Tax period is only one year and "investing" for one year carries a serious amount of risk if any appreciable return will come around in that time period. Reality is you are not exactly investing the money as you have it sitting somewhere available liquid.

We're talking about the long term. Sure any investment could lose money in one year, but if you're dollar cost averaging and doing automatic monthly investments, there are more years where you will come out ahead than behind. Just look at the performance numbers for FXAIX, only had one down year in the last 10 years which was 2018. You would have been ahead the other 9 years.

https://fundresearch.fidelity.com/mutual-funds/performance-and-risk/315911750

Failure to plan is just as risky if not more than avoiding risk.

 

[JeffKeryk]

Claiming zero may not take enough outta your paycheck, depending on all the numbers.
If you make about the same year over year, then you can easily estimate your tax liability.
Beyond that, perhaps meeting with a tax advisor might make sense for oyu.

Good luck.

 

[M56959]

You need to consult with a professional tax advisor.

BITOG is not that.