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Forum ยป I owe money every year come tax time
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Thread: I owe money every year come tax time

post 1699461673 03-20-2024, 10:08 AM
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I owe money every year come tax time

Filed my returns last weekend. I was going to owe $1000 to federal and $600 to state, but my state has a nice surplus this year so I got a kicker; altogether I'm getting like $1400 back.

But it's the second year in a row I owed some money. Once I plugged in my 1099-INTs and DIVs I all of a sudden it was a done deal. Is there no way to circumvent this? Or just figure out what tax credits I could take advantage of next year?
post 1699461723 03-20-2024, 10:09 AM
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Owing money > Giving the gubmint an interest free loan.

I try to get mine to where it's as close to 0 sum as i can.

This year, got about 100 back from state and owed feds about 150.
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post 1699461743 03-20-2024, 10:10 AM
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I used to get money back in my twenties and early thirties, especially when my kids were younger. There's a child tax credit or whatever.

But now that my kids are grown up, my wife and I pay several thousand dollars extra every year in addition to whatever we're taxed throughout the year.
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post 1699461773 03-20-2024, 10:10 AM
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Originally Posted By twovalvekid⏩
Owing money > Giving the gubmint an interest free loan.

I try to get mine to where it's as close to 0 sum as i can.

This year, got about 100 back from state and owed feds about 150.
^^ This.

I get to feel your pain 4 times a year OP.
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post 1699461803 03-20-2024, 10:11 AM
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Originally Posted By twovalvekid⏩
Owing money > Giving the gubmint an interest free loan.

I try to get mine to where it's as close to 0 sum as i can.

This year, got about 100 back from state and owed feds about 150.
This. I ended up owing Feds about $500, state owed me $500.
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post 1699462253 03-20-2024, 10:19 AM
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Howdy Dolphin....

Just throwing this out: Did you check the "Withhold higher single rate" box on your work W4 (?) form?
I'm assuming that check box option is still a choice and it's one I always opted for.

I do understand thebreak eventake on it but that seems a very difficult equation to achieve and monitor.
Personally, I don't mind getting a few bucks back and don't concern myself with splitting hairs in this context.

Carry on.
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post 1699462313 03-20-2024, 10:21 AM
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Originally Posted By MrQuint⏩
This. I ended up owing Feds about $500, state owed me $500.
nice.gif

This is the goal.

Or....if you owe money and dont have any other deductions that legally get you to not owing money, that's not necessarily a bad thing.
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post 1699462333 03-20-2024, 10:21 AM
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It's good to owe some money, assuming you invested it. Otherwise, you gave the IRS a free loan.
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post 1699462413 03-20-2024, 10:23 AM
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Generate zero income, problem solved.
post 1699462913 03-20-2024, 10:35 AM
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Originally Posted By Luc1fer⏩
It's good to owe some money, assuming you invested it. Otherwise, you gave the IRS a free loan.
This.

post 1699463053 03-20-2024, 10:39 AM
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Crew. Iโ€™m on the hook for six racks this year, fukin sucks
post 1699463603 03-20-2024, 10:52 AM
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Originally Posted By Wayne
Howdy Dolphin....

Just throwing this out: Did you check the "Withhold higher single rate" box on your work W4 (?) form?
I'm assuming that check box option is still a choice and it's one I always opted for.

I do understand thebreak eventake on it but that seems a very difficult equation to achieve and monitor.
Personally, I don't mind getting a few bucks back and don't concern myself with splitting hairs in this context.

Carry on.
I think I'm good in my W-4s. When I entered all my info on my W-2 I only owed about $90 to federal. Once I plugged in all my 1099s it shot up.

Granted I was kind of stupid a lot of the year and kept cash in a money market fund about half the year. The other half I was exclusively mutual funds and treasuries.

I also recall last year when filing for 2022 I owed money plus I was on the hook for an underpayment penalty, which was a bitch to clear up.
Brb get penalty
Brb pay it
Brb get extra fees tacked on because I didn't pay the penalty fast enough
Brb have to pay that ASAP before another late penalty gets added

Fuk this I should just stop paying taxes.
post 1699463633 03-20-2024, 10:53 AM
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Originally Posted By Midi77⏩
Generate zero net income, problem solved.
Fixed that for you.

post 1699463743 03-20-2024, 10:55 AM
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Understand you are actually winning in this scenario

I used to owe thousands like 5k, Im good with money so bills like this do not phase me.

Then ole turdeau blocked the loop hole and made so i have to pre emptively pay like 12k (lol its crazy I know) if I owed the year before. Then they would refund the rest if I didnt owe the whole 12k later on when you did your taxes.


The tax system is clown level, they want to hold your money all year and collect interest off of it.

I should only pay tax at tax time, deductions off the paycheck are a joke



Anyways Ive got it set up now so im near zero or i owe a small amount so I don't trigger the pre pay thing
post 1699464183 03-20-2024, 11:08 AM
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Originally Posted By AlwaysFocus⏩
Understand you are actually winning in this scenario

I used to owe thousands like 5k, Im good with money so bills like this do not phase me.

Then ole turdeau blocked the loop hole and made so i have to pre emptively pay like 12k (lol its crazy I know) if I owed the year before. Then they would refund the rest if I didnt owe the whole 12k later on when you did your taxes.


The tax system is clown level, they want to hold your money all year and collect interest off of it.

I should only pay tax at tax time, deductions off the paycheck are a joke



Anyways Ive got it set up now so im near zero or i owe a small amount so I don't trigger the pre pay thing
What loophole?
post 1699464273 03-20-2024, 11:10 AM
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With you OP. I owe $3k
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post 1699464343 03-20-2024, 11:13 AM
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post 1699464823 03-20-2024, 11:26 AM
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Originally Posted By WetCoaster⏩
What loophole?
the one where I get to keep more money throughout the year and pay them at tax time like it should be?

if you owe too much at tax time, they hit you with a pre pay bill for the next year, if you dont pay that youll owe interest eventually and they will get even more money, its crazy
post 1699466263 03-20-2024, 11:58 AM
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Originally Posted By AlwaysFocus⏩
the one where I get to keep more money throughout the year and pay them at tax time like it should be?

if you owe too much at tax time, they hit you with a pre pay bill for the next year, if you dont pay that youll owe interest eventually and they will get even more money, its crazy
Interest on $12,000 is nothing these days. We have way more than that in one of our accounts and it barely collects any interest.

I have never heard of a pre pay bill before. Do you mean if you can't pay your taxes? My son works for the CRA I will ask him.

There are three fundamental ways to reduce your taxes:

Lower your gross and taxable income by deferring income to another year.
Take all allowable deductions, such as by maximizing your RRSP contributions.
Use all your available tax credits to lower your total taxes owing.

My wife made $139,500 last year and paid $35,000 in taxes. She gets a refund of $4000 because of RRSP's
post 1699468413 03-20-2024, 12:39 PM
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I always owe $5-7000. Can't believe I haven't been assessed a penalty yet. Wife still has the same W4 from 15 years ago that says she's married with 2 kids, so they withhold like our 2 grown kids are still living with us instead of paying their own taxes.
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