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mslee52
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I have $1,976 in federal taxes due this year why do I always pay and not receive?

 
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2 Replies

I have $1,976 in federal taxes due this year why do I always pay and not receive?

That is because your total tax liabilities is greater than your total tax payments.  You might want to consider increasing the amount of taxes that are withheld from your wages in 2023.  You will need to give your employer a new W-4.

 

Go to this IRS website for a withholding calculator - https://www.irs.gov/individuals/tax-withholding-estimator

I have $1,976 in federal taxes due this year why do I always pay and not receive?

taxpayers that receive refunds are loaning the government money and not being compensated. Owing is not bad unless you have difficulty paying the balance due.  Some taxpayers do have problems saving so they would have problems paying. They use the government as a no-interest bank account.

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the basic rules to avoid underpayment penalties 

1) pay in timely through withholding and estimated tax payments 90% of the current year tax or

2) pay in timely through withholding and estimated tax payments100% (110% if that year's adjusted gross income is over $150K ) of the prior year's tax

state law vary.

 

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