topic Re: standard deduction in Deductions & credits

standard deduction

kenny442 — Wed, 26 Feb 2020 21:27:58 GMT

we made $10000 more last year and withheld $1400 more and still owe $1100 am I missing something here?

Everything was fine until i started with rental income.

Re: standard deduction

Opus 17 — Wed, 26 Feb 2020 21:30:32 GMT

$10,000 of new income will be taxed at your top rate, which could be 10%, 12%, 22%, 24% or higher. Plus state taxes. Owing $2500 on $10,000 of income (25%) is certainly possible for combined state and federal taxes. The only way to actually see the math is to print your last year and this year forms and compare them side by side.

Re: standard deduction

kenny442 — Wed, 26 Feb 2020 21:33:38 GMT

this is just federal. Haven't started state yet

Re: standard deduction

Opus 17 — Wed, 26 Feb 2020 21:36:10 GMT

2019 tax brackets are here. https://thecollegeinvestor.com/21804/federal-tax-brackets/

If, after subtracting your standard or itemized deductions from your gross income, your taxable income is more than $84,000 (single) or $166,000 (married) then any new income will be taxed at 24%.

Re: standard deduction

kenny442 — Wed, 26 Feb 2020 21:39:10 GMT

wow! were under the $82000 for both.

Re: standard deduction

Opus 17 — Wed, 26 Feb 2020 21:42:49 GMT

In that case, I can only suggest you print your return in draft form and compare it line by line with last year. I can't see your returns and can't do the comparison for you. It sounds high unless there are other factors I am missing. Sometimes, certain kinds of income can disqualify you from other tax deductions or credits.

For example, having income from real estate will disqualify you from the earned income credit. That could be part of the change if you had EIC and no real estate last year.