W2 Worker Submitted taxes, need to pay 1040-ES for 2020

[theredmage]

Hi all, hoping someone can help with this issue. Over the last 2 years I have owed a lot of Federal Taxes on my W2's. (3000-4000k) For some reason my W4's are not taxing enough Federal taxes out. I've noticed that in Turbo Taxes filling submission comes with forms 1040-ES for me to pay throughout the year. Why would I need to pay 1040-ES as a W2 worker? Is it because my company is not withholding enough from my paychecks? My withholds are 0 for Fed and State

[VolvoGirl]

You should check with your employer to see if they are taking out the right amount.  Are you married?  Do you have other income like interest or dividends?  Instead of sending in extra estimated payments you can have your employer take out more on each check.   You can have them take out an additional amount over the withholding.  Like $20 or whatever.

[theredmage]

Thanks for the quick reply. I am married, chose to file separately this year as it added an extra 150 back in the pocket. Interest and Div's are pretty minimal... I would like to assume that with a correct W4 that wouldn't be necessary to have additional withholds taken out? But for me it is looking like I need an additional 200-250 per check withheld then :(

[VolvoGirl · Accepted solution]

When you are married that is a big reason you can owe more.  Each job is only taking out enough for that job and not for your total income combined which puts you into a higher tax bracket.  I'm married but claim Single & 0 at work to have more taken out.  

Heres some things to know about Married filing Separate to watch out for......

It is usually better to file Joint. Joint has the lowest tax rates and the highest Standard Deduction.   And if you are in a Community Property state MFS gets tricky to figure out.  Here's some things to consider about filing separately……

In the first place you each have to file a separate return, so that's two returns.  And if you are using the Online version that means using 2 accounts and paying the fees twice.  

Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong.  If one person itemizes deductions then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO!  

And there are several credits you can't take when filing separately, like the

EITC Earned Income Tax Credit

Child Care Credit

Educational Deductions and Credits

And contributions to IRA and ROTH IRA are limited when you file MFS.

Also if you file Married Filing Separately up to 85`% of your Social Security becomes taxable right away even with zero other income.

See …….

https://ttlc.intuit.com/community/married/help/is-it-better-for-a-married-couple-to-file-jointly-or-...

[theredmage]

Gotcha, yea that makes sense. I'll have to check with the Wifes W4 because when inputting her data in it never owes and it always return of around 1000-1500 the last two years. I will try switching mine to Single with 0 still and hope that helps for next year to not sting so much.

Yea this year was the only year I ever filed Separately. Usually I do joint for us but for some reason the wife was able to get a little more back from the State filing separate *shrugs* and none of the credits or contribution limits really affect us. Next year will be back to Joint! Thanks for the help

[VolvoGirl]

Huh?  You mean when you enter her W2 first it shows a refund?  Did you ever put yours in first?  You shouldn't watch the refund monitor until you are done entering all your income and deductions.  On a Joint return it's based on the total not on her W2 and yours.  

[theredmage]

Yea I did a few different ways because I was trying to figure out why we owed jointly a total of around 3200 for Fed, I forget the State but it was basically even.

The first way I did try Joint and what you said that makes total sense what you are saying because at one point it did show me with a refund when I put my info in first I believe. Then for **bleep**s and giggles I did ours filed as separate and it showed hers with a refund 1500~ish and mine as owed 4200~ish for Fed. 

This makes a little more sense everything because then it sounds like we just each need to increase a withhold of 100-125 per paycheck with is a little more easy to deal with but still annoying that its not withheld automatically but makes sense as the W4s dont really 'talk' to each other to see what we are each making