I had three jobs in 2022 and that's likely to continue this year. 2022 was the first year we didn't claim a dependent. Also, we use the Healthcare Marketplace and somehow received more advance payments on the Premium Tax Credit than we were actually entitled to (lines 24 & 25 on form 8962). Every year prior we've received a refund but this year we owed quite a lot. . From what I can grasp, merely dropping a dependent may have accounted for much of the owed amount (no child tax credit, no Premium Tax Credit on the marketplace). Is that correct?
More importantly, what can I do to avoid owing next year? It's my understanding that at least part of the answer to that is to adjust my withholdings but:
Thanks.
1. Many, many taxpayers have noticed their taxes increase this year. This is often due to the ending of the pandemic tax benefits by the end of 2021.
2. It is common for taxpayers with multiple jobs to under withhold and thus owe tax at tax time. This is because the withholding for one W-2 assumes that this is your only job, and uses the withholding appropriate for a lesser income. So three jobs just digs you in a bigger hole, unless you change the withholding in one or more jobs.
3. Right now, take a look at the IRS Tax Withholding Estimator, and see if it will help you adjust your withholding. Of course, you can always skip that and just make an additional estimated tax payment online at the IRS website.
As for the PTC, when you end more at the end of the year, it's generally because you underestimated how much income you would have this year. NOTE: when you have life changes, like another dependent (or losing one), or a new job, you need to call the Marketplace and review your situation so that the amount of PTC is appropriate.
1. Many, many taxpayers have noticed their taxes increase this year. This is often due to the ending of the pandemic tax benefits by the end of 2021.
2. It is common for taxpayers with multiple jobs to under withhold and thus owe tax at tax time. This is because the withholding for one W-2 assumes that this is your only job, and uses the withholding appropriate for a lesser income. So three jobs just digs you in a bigger hole, unless you change the withholding in one or more jobs.
3. Right now, take a look at the IRS Tax Withholding Estimator, and see if it will help you adjust your withholding. Of course, you can always skip that and just make an additional estimated tax payment online at the IRS website.
As for the PTC, when you end more at the end of the year, it's generally because you underestimated how much income you would have this year. NOTE: when you have life changes, like another dependent (or losing one), or a new job, you need to call the Marketplace and review your situation so that the amount of PTC is appropriate.
Thank you so much! That's exactly the info I was looking for.