It's Tax Day in America. Do you...

[SEWIGuy]

I file early every year, normally get a small refund every year.  This year, I ended up owning in the amount I normally get for a refund on federal despite no changes to my tax situation and still getting my normal refund on state.  Very annoying.  I suspect payroll is reducing the amount they withhold on federal taxes, but when I tried to complain, they wanted me to contact a tax professional even though my situation is as simple as can be (one salary for income/standard deduction) and I can't see any way the problem could be on my end.  Am I missing something?

Tax rates and withholding are altered annually based on inflation. It's not your employer's responsibility to make sure you are withholding enough - they just do what the tables say they should do. If your tax situation is that easy to figure out, it wouldn't take long for you to figure out what your tax liability is going to be and prepare accordingly.

Well, clearly the tables are wrong or they made a mistake somewhere.  I checked my W4 and everything is correct as always: single, no other income, no dependents, additional $5/paycheck as I set up years ago.  Since my overall situation is simple and doesn't change except for the exact numbers, shouldn't the amount withheld be roughly the same relatively speaking?  And why would it only affect federal, but not state?  New York's tax code is very close to the federal tax code, to the point where the first part of NYS taxes is replicating your federal return (after which you do NYS additions and subtractions, of which I only have my pension contribution, as always).

Unfortunately, figuring out exactly how much I'll owe is easier said than done.  Not only do I budget off of net income numbers and don't have the greatest idea what percentage of my paycheck should be withheld for taxes, but NYS fiscal year is April-March, not January-December like the tax year, so my income tends to bump up sometime in April as my annual raise and step increase happen at that time.  Making things weirder, the IRS calculator based on paycheck numbers claims I'm on track for a refund this year... so why did I owe last year when my withholding amount went down slightly on January 1?  Something's rotten about this whole situation, but I can't figure out what, especially since everybody is just having a knee-jerk reaction to assume that I'm doing something wrong and need to hire a tax preparer, even though my 2024 return is identical to my 2023 return except for using the numbers from my 2024 W2 and tax tables (as one would expect if neither my tax situation nor the 1040 have changed) except for owing instead of getting a refund (and strangely, owing around the same amount I normally get as a refund).

I know the US tax code is specifically designed to enrich the tax prep parasites "industry", but this is beyond the pale even by US standards.

Just use FreeTaxUSA. It's cheap and easy for simple returns like yours. No need to hire a tax preparer for a simple return like yours with one W2 and a standard deduction.

[DandyDan]

I waited until Sunday to file. Every year since I moved to Iowa, I have got a federal refund, but owe the state, and this year was no exception. A good chunk of what I owe the state each year is the school district surtax.

[Rothman]

It's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

[hotdogPi]

It's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

This was not the case for me. Federal (refund) took four minutes; state (payment) took two hours and four minutes.

[SEWIGuy]

It's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

You can set the date you want your payment to be made right?

[Rothman]

It's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

You can set the date you want your payment to be made right?

Can't set the date you get your refund, right?

[Rothman]

It's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

This was not the case for me. Federal (refund) took four minutes; state (payment) took two hours and four minutes.

Huh.  Never had a federal refund go through that quickly for me.

[JayhawkCO]

It's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

This was not the case for me. Federal (refund) took four minutes; state (payment) took two hours and four minutes.

Huh.  Never had a federal refund go through that quickly for me.

Ha. I don't remember the last time I got a Federal refund. Probably circa 2003.

[SEWIGuy]

It's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

You can set the date you want your payment to be made right?

Can't set the date you get your refund, right?

Correct. But my point is that if you file early enough, you will almost always be able to get your refund before you would have to pay.

[vdeane]

Just use FreeTaxUSA. It's cheap and easy for simple returns like yours. No need to hire a tax preparer for a simple return like yours with one W2 and a standard deduction.

That's only free if you make poverty level wages.  Why should I have to pay to fill out a government form?  I use Free File Fillable Forms for federal and manually print/mail my state return since NY took away any free efile ability for those who don't qualify for "Free File Alliance" a decade ago.  There's also IRS DirectFile, but that requires jumping through a zillion hoops to verify your identity to create an account, and I'm not dealing with that when I consider it very likely that the current administration will kill the program.

Needless to say, my opinion of the tax prep parasites "industry" is very low and I don't want to support these grifters.  They've successfully lobbied both Congress and state governments to keep US taxes from being a simple as the rest of the world, and as far as I'm concerned, they should be punished, not rewarded.

Just a few ideas:  Maybe your salary creep up into a higher marginal tax bracket.  Or, since you said you get annual increases in April, maybe that has something to do with it.  Or other withholdings from your paycheck (we have a 457B (Deferred Comp) that could affect current tax liability.

They've never caused an issue like this, though.  The only thing I can think of is that something went wonky in the paychecks where they did the dental stipends and higher education bonus (which bumped things up to $1400 over base salary), but it still doesn't explain why the withholding for state was on target while the withholding for federal was less than it should have been for my income/W4.

[SEWIGuy]

Just use FreeTaxUSA. It's cheap and easy for simple returns like yours. No need to hire a tax preparer for a simple return like yours with one W2 and a standard deduction.

That's only free if you make poverty level wages.  Why should I have to pay to fill out a government form?  I use Free File Fillable Forms for federal and manually print/mail my state return since NY took away any free efile ability for those who don't qualify for "Free File Alliance" a decade ago. 

Well, I guess you can either take a stand and worry that you did it wrong, or pay $15 to ensure you did it right. I get the frustration for paying someone to fill out a form, but that's something that I guess I just got over long ago.

[LilianaUwU]

I don't pay taxes in America. That's because I'm in Canada, where I pay taxes instead, I promise.

Well get ready, your filing deadline is April 30.

Promises can only get someone so far.

[kernals12]

It's amazing to me how much quicker federal and state governments process my payments compared to how long it takes for them to issue refunds.

They need to make sure your math is correct and that the return isn't being filed fraudulently.

[JayhawkCO]

They need to make sure your math is correct and that the return isn't being filed fraudulently.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov't: You go to prison.

[kphoger]

They need to make sure your math is correct and that the return isn't being filed fraudulently.

They also need to make sure your math is correct if you're paying them too, you know.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Sounds about right.  It's ridiculous.

Of course, on the other hand, they don't double-check everyone's, do they?

[kernals12]

They need to make sure your math is correct and that the return isn't being filed fraudulently.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov't: You go to prison.

The government doesn't know exactly how much you owe. Many forms of income don't get included on information returns and then there are all the various deductions available.

[Max Rockatansky]

They need to make sure your math is correct and that the return isn't being filed fraudulently.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov't: You go to prison.

The government doesn't know exactly how much you owe. Many forms of income don't get included on information returns and then there are all the various deductions available.

Typically in these kind of threads usually everyone just shits on the IRS.  The reason they do it is because nobody likes paying taxes.  Probably just best to play along or ignore the rhetoric or someone will suddenly think you are with the tax man.

[JayhawkCO]

They need to make sure your math is correct and that the return isn't being filed fraudulently.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov't: You go to prison.

The government doesn't know exactly how much you owe. Many forms of income don't get included on information returns and then there are all the various deductions available.

Typically in these kind of threads usually everyone just shits on the IRS.  The reason they do it is because nobody likes paying taxes.  Probably just best to play along or ignore the rhetoric less or someone will suddenly think you are with the tax man.

I have no problem with the human beings that work for the IRS. I do have a problem with how complicated the tax code is and how you can do all kinds of financial shenanigans to not actually have to pay any taxes despite a very large income.

[Max Rockatansky]

They need to make sure your math is correct and that the return isn't being filed fraudulently.

Government: You owe us money. It's called taxes.

Me: How much do I owe?

Gov't: You have to figure that out.

Me: I just pay what I want?

Gov't: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov't: You go to prison.

The government doesn't know exactly how much you owe. Many forms of income don't get included on information returns and then there are all the various deductions available.

Typically in these kind of threads usually everyone just shits on the IRS.  The reason they do it is because nobody likes paying taxes.  Probably just best to play along or ignore the rhetoric less or someone will suddenly think you are with the tax man.

I have no problem with the human beings that work for the IRS. I do have a problem with how complicated the tax code is and how you can do all kinds of financial shenanigans to not actually have to pay any taxes despite a very large income.

Yes but you're not questioning other forum members about the legitimacy of their claimed business expenses are you?  Only one person is taking this thread way too seriously.

Me personally I have no particular beef with IRS workers.  Tax code like you said is a PIA to learn the ins and outs of.  I have so many moving pieces on my end that it was worth the investment to just to hire a real accountant. 

[kernals12]

If you want to be depressed, here's the IRS' worksheet for calculating capital gains tax.

Things would be a lot simpler if capital gains were taxed like ordinary income with the basis adjusted for inflation and retained earnings.

[Scott5114]

I mean, there's a lot of boxes on that form, but if you actually read it it's basically writing out the steps of how to build an Excel spreadsheet to do it for you.

The really stupid thing is in many other countries, the government sends you the information they have and if you agree you just sign it and send it back with your payment (if you owe anything). You only need to fill out forms if you have complications that the government doesn't know about (which is less likely because the tax code is usually simpler).

[JayhawkCO]

Yes but you're not questioning other forum members about the legitimacy of their claimed business expenses are you?

Yes I am. You and Rothman both.

[Max Rockatansky]

Yes but you're not questioning other forum members about the legitimacy of their claimed business expenses are you?

Yes I am. You and Rothman both.

Say wut? 

Additionally, I own a small business, which allows me to write off many of my purchases and mileage.

I certainly hope those purchases and miles were for legitimate business purposes.

[gonealookin]

[image snipped]
If you want to be depressed, here's the IRS' worksheet for calculating capital gains tax.

Things would be a lot simpler if capital gains were taxed like ordinary income with the basis adjusted for inflation and retained earnings.

Calculation of tax on qualified dividends and capital gains looks intimidating at first glance...but it's fifth-grade level mathematics.  Working through that by hand with pencil and calculator is great for helping you understand exactly which parts of your income are being taxed at the different rates.

[kernals12]

I mean, there's a lot of boxes on that form, but if you actually read it it's basically writing out the steps of how to build an Excel spreadsheet to do it for you.

The really stupid thing is in many other countries, the government sends you the information they have and if you agree you just sign it and send it back with your payment (if you owe anything). You only need to fill out forms if you have complications that the government doesn't know about (which is less likely because the tax code is usually simpler).

I worry that something like that here would turbocharge the already massive problem of identity fraud.