Teach this dummy some IRS techniques

WIL84911 · WIL84911's Garage

2013 we paid over 11K. Made an adjustment this year we're paying 5K. What the hell do I need to make this pain go away? Wife works 2 full time jobs and I have a part time gig to get my Porsche parts. Rescue me!!!!

Rick Lee · Rick Lee's Garage

On your W4 have an additional $208 per paycheck withheld and you'll be square.

asphaltgambler · 07:06 AM

OR start looking for more tax deductions to limit your liability. For that much money owed you should consult a good tax accountant / CPA and have them pour over your current situation. I found a really good guy @20 years ago and paid him a chunk. BUT he 'made' me money after that. Knowledgeable, solid advice is priceless........................

bivenator · 03-20-2015, 07:09 AM

You don't me my advice, I need yours. How do you get your spouse to do two full time and you have only a part time. Color me jelous.

WIL84911 · WIL84911's Garage

Quote:

Originally Posted by bivenator

You don't me my advice, I need yours. How do you get your spouse to do two full time and you have only a part time. Color me jelous.

Lol. Sorry if I didn't mention it. In addition to my part time gig I do have a full time job of which pay equals the total of her 2 full time job. Believe me it might sound great but it's not (let's not go there as I'm on the edge of divorce).

asphaltgambler · 03-20-2015, 07:20 AM

Two financial rules I live by: It's not what you earn - it's what you keep. Work smart / not hard.

WIL84911 · WIL84911's Garage

Quote:

Originally Posted by asphaltgambler

Two financial rules I live by: It's not what you earn - it's what you keep. Work smart / not hard.

So yes I got the hard part. I need some smart slap in the head knowledge on how I can get to keep. Should I claim zero plus add the $208 on the withholding as mentioned? Sorry I'm just as I said a dummy when it comes to taxes.

MBAtarga · 03-20-2015, 07:39 AM

Decrease the number of exceptions on your W4 with your employers. It's likely you have 2 or more listed - as well as your wife. That's like claiming 6 dependents on your 1099. For one of your wife's full time jobs - she should probably claim 0 exemptions. There are numerous on-line calculators available - at least one on the IRS site - that will assist in determining how many exemptions you should claim based on your income, deductions, past tax liability,etc. I know because we are going through this same exact issue now.

gatotom · 03-20-2015, 07:57 AM

two types of people out there, those that work for someone else and those that work for themselves.

The people that work for themselves usually have a very good cpa on there side.

Enough said.

LeeH · 03-20-2015, 07:59 AM

Quote:

Originally Posted by MBAtarga

Decrease the number of exceptions on your W4 with your employers. It's likely you have 2 or more listed - as well as your wife. That's like claiming 6 dependents on your 1099. For one of your wife's full time jobs - she should probably claim 0 exemptions. There are numerous on-line calculators available - at least one on the IRS site - that will assist in determining how many exemptions you should claim based on your income, deductions, past tax liability,etc. I know because we are going through this same exact issue now.

+Withhold at single rate instead of married rate.

My wife gets a W2. I have two businesses. Instead of paying quarterly on my stuff, we just have zero dependents listed and withhold at the single rate from her check. Basically, my taxes are withheld from her check. Works out fine.

We tend to get a few thousand back every year. Yeah, we give the government an interest free loan. BUT, and current interest rates, we're losing little. It's like our vacation fund.

asphaltgambler · 03-20-2015, 08:00 AM

Everyone's situation will be different. As I stated in my first reply, find a good CPA and invest in his advice. HE is working for YOU, HE should have your best interest at hand to limit liability.

1990C4S · 03-20-2015, 08:05 AM

Quote:

Originally Posted by WIL84911

(let's not go there as I'm on the edge of divorce).

There's your surefire way to make your tax problems seem insignificant.

jwasbury · 03-20-2015, 08:19 AM

Tax withholding is formula based, and as already stated there is a lot of info out there that you can use to figure out what to enter on the W-4 you provide to employers to insure you don't get stuck with a large underpayment at year end. This assumes, of course, that your income level is relatively stable. Internal Revenue Service is a great source of info. As screwed up as government agencies often are, the IRS website is actually excellent (a good use of our tax dollars, for once).

For the typical W-2 wage earner (no rental properties, no small business, etc.), there are only a few deductions available. Mortgage interest, property taxes and state taxes are generally the only meaningful ones aside from the dependents/personal exemptions. For those with kids, you may also qualify for dependent care credits, or the child tax credit...although these phase out at a level that will put a lot of working people in the NYC metro area above the limit.

Porsche-O-Phile · Porsche-O-Phile's Garage

Quote:

Originally Posted by 1990C4S

There's your surefire way to make your tax problems seem insignificant.

Ain't that the truth.

Take a photo of some of your money now. You'll never be able to remember what it looks like again for the rest of your life.

Consider a sex-change before things go to court. Family law courts HATE males.

Good luck.

wdfifteen · wdfifteen's Garage

Quote:

Originally Posted by jwasbury

For the typical W-2 wage earner (no rental properties, no small business, etc.), there are only a few deductions available.

There's your answer. Start some kind of small business with expenses that you can deduct. Get a good accountant, tell him what you want to do, and he'll help you maximize your deductions. You might be able to quit the part time job on the money you save owning a business doing something you enjoy.

WIL84911 · WIL84911's Garage

Great responses guys. I will chew on them. You also made me laugh. Made my day. Yes I'm also starting a small business so I assume that helps next tax season.

M.D. Holloway · 03-20-2015, 12:04 PM

I had a lot of 1099 income 2 years ago - more then I thought I would ever get. I paid lots as well. I wised up and formed an LLC and invoiced through that. I am in good stead now.

I think you need a better accountant.

widgeon13 · 03-20-2015, 12:06 PM

Are you fully funding and IRA and 401K? If you aren't, you should be.

Those two will reduce your AGI and consequently lower your taxes. You keep the money in hand and pay tax on it when you start taking it out.

Better to pay yourself than the Freakin IRS! No brainer in my book.

dennis in se pa · dennis in se pa's Garage

Taxes are not an area most people should DIY. My accountant costs me $400-$500 at tax time, but it saves me money. Penny wise and pound foolish. Don't be that.

wdfifteen · wdfifteen's Garage

Quote:

Originally Posted by M.D. Holloway

I had a lot of 1099 income 2 years ago - more then I thought I would ever get. I paid lots as well. I wised up and formed an LLC and invoiced through that. I am in good stead now.

I'm curious. How did that help your tax situation?