Taxes due despite claiming zero

Forum|Forum|3 years ago
March 16, 2023
1 reply
4 views

I am wondering why I owe taxes after claiming zero all year. I have always claimed zero and have always received a refund, I did recently get a substantial promotion thus increasing my salary. I've read up on this and yes, I do have multiple W'2s but I claim zero on all of these and my tax bracket is the same regardless of additional W2s.

Is this because the other W2's despite claiming 0 are being taxed at a lower rate as they are only military guard pay and part time pay, thus not being deducted at the higher tax bracket? When I used the Intuit tax refund calculator and punch in my main job salary and yearly deductions, I would've been set to receive a refund. When I plug in the additional jobs, that changes substantially thus owing.

I know the fix for this is to alter my W4's and request additional $ be withdrawn throughout the year. Just want to understand this situation a bit better. Thanks!

Best answer by JohnB5677

You've got that partially correct.

The way the payroll system works is they try to average out your taxes for the whole year.

Let's say you earn $5,000 a month. that equals $60,000.

The standard deduction for a single person is $12,950.

Subtract $12,950 from $60,000 = $47.050

At a 10% tax rate the tax is $4,705,

If you get a second job for $2,000 a month. that equals $24,000.

The standard deduction for a single person is $12,950.

Subtract $12,950 from $24,000 = $11,050

At a 10% tax rate the tax is $1,105,

Taxes withheld were $4,705 + $1,105 = $5,810

Your actual tax is:

$60,000 + $24,000 = $84,000 - $12,950 = $71,050

At 10% the tax is $7,105

You owe $1,295.

Add to that if you start to increase tax brackets it can be worse.

You have to indicate the income from the first job when you fill out the W-4 that your employers sends to the payroll department.

JohnB5677Answer

Level 15

You've got that partially correct.

The way the payroll system works is they try to average out your taxes for the whole year.

Let's say you earn $5,000 a month. that equals $60,000.

The standard deduction for a single person is $12,950.

Subtract $12,950 from $60,000 = $47.050

At a 10% tax rate the tax is $4,705,

If you get a second job for $2,000 a month. that equals $24,000.

The standard deduction for a single person is $12,950.

Subtract $12,950 from $24,000 = $11,050

At a 10% tax rate the tax is $1,105,

Taxes withheld were $4,705 + $1,105 = $5,810

Your actual tax is:

$60,000 + $24,000 = $84,000 - $12,950 = $71,050

At 10% the tax is $7,105

You owe $1,295.

Add to that if you start to increase tax brackets it can be worse.

You have to indicate the income from the first job when you fill out the W-4 that your employers sends to the payroll department.

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ryruss10Author

Level 2

I see. So the disparity lies within each W2 I have applying the standard deduction but in the end, the deduction only applies to the cumulative amount. As in your example one additional W2 forgoes 10% untaxed income of 12,950$.

Seems like the government could be more practical in their W4 forms and ask the simple "is this a secondary job" type of question on the form so that it does not apply the standard deduction to that income leaving taxpayers baffled to some extent. I've always wondered why my national guard military pay W2's have destroyed my tax return for years. Now I know.

Thanks for explaining that!