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New Member
posted Feb 11, 2020 1:01:06 AM

Why did I owe 1200 in taxes if taxes were being take out of my checks monthly. I didn’t have any exemptions or anything

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3 Replies
Level 15
Feb 11, 2020 7:48:00 AM

Do you have other taxable income (investments, retirement, Social Security, scholarships, etc.) from which taxes are not being withheld?  But check your data entry for any typos, especially commas and decimals.

Level 4
Feb 11, 2020 8:19:15 AM

Are you retired or still working?  You posted this question under Retirement. 

 

Just because income taxes are being withheld from your monthly retirement payments, doesn't mean that they are sufficient to pay your annual tax bill.  You should also consider filing a new  W-4P with your pension payer to increase the amount withheld to avoid penalties in 2020.

Expert Alumni
Feb 11, 2020 8:30:04 AM

To repeat Lisa3588's point, taxes that are withheld are just an estimate of what you might owe at the end of the year. This is because at the beginning of the year, it is not possible to know all the circumstances that may affect your actual tax due at the end of the year.

 

So tax withholding is just setting aside a bucket of money to be used to pay your actual tax when you file your return.

 

I would encourage you to utilize the online IRS Tax Withholding Estimator. Answer all the questions and let it figure out what your withholding should be. The estimator is normally used by taxpayers with a W-2, but I think it will work for retired taxpayers as well.