No one can tell without seeing your return.
Owing taxes unexpectedly can be pretty confusing, but there are a variety of reasons this can happen, including receiving unemployment income or taking on an additional job.
Some of the most common explanations for owing taxes include:
Yes. I'd like to connect with someone to discuss my specific situation.
I owe the IRS $20k more in 2021 than the year. I need someone to review and analyze what I input in TurboTax.
In community we don't don't have access to your return. To connect with one of our credentialed tax experts, please check:
How do I connect with a tax expert in TurboTax Live?
Some of the most common explanations for owing taxes include:
I'm on here for the "3/9 FREE EVENT: Experts answer questions on filing with TurboTax for the first time." Are the "credentialed tax experts" you describe part of this free event? I need their support.
I will try to help, but I can't see your return, so you have to be my eyes.
If you have your year-to-year comparison (you can get this in the Online version if you pay for TurboTax, but don't file) it will show you what areas changed.
There are three factors that will determine the size of your refund (or what you owe).
The amount you had withheld from your wages.
Whether you qualify for certain tax credits.
Your income determines the amount of tax you owe. This not only includes your wages, but also any other type of income you may have had. A small job that issued a 1099 MISC or NEC can result in significant taxes. Based on criteria established by the IRS there are tables that determine the amount of tax that you owe. Double-check your income entries and make sure they are correct.
The amount you had withheld generally comes from your W-2 income; however, taxes can be withheld from other forms of income. If the taxes withheld are more than what you owe you will get a refund. If not, you will owe money. Again, double-check your entries and be sure they are correct.
You can subtract Tax Credits from the amount of tax you owe. Here are some common Credits:
If you look at your tax return FORM 1040 you can check these entries.
Line 19 Child Tax Credit
Line 27 Earned Income Credit
Line 28 Additional Tax Child Tax Credit
Line 29 American Opportunity Credit (For College)
Line 30 Recovery Rebate Credit
You also may have had more taxes withheld on your income.
Compare your tax credits to what you had last year. This is the most likely place for a large amount to be.
I appreciate your help. I have the year/year comparison. I did some consulting work in 2021 but never received a 1099. I reminded the company to provide it but was ignored. Do I have to report the consulting income if no 1099 was provided?
Yes. You are required to report all income received during the year. This would likely be self-employment income, which is reported on a Schedule C.
For tax purposes, self-employment income includes any part-time business or "side work" performed in which you are in business for yourself, rather than another person. You are also considered self-employed and need to file a Schedule C if you engage in business-like activities where you intend to make a profit.
Please follow these steps in TurboTax to start your Schedule C:
Would $46,666 in non taxed 1099 income result in a $20,000 taxes owned on the return (as else being equal)? I'm looking for someone to confirm if this seems reasonable.
Probably not, but possibly. What all else is equal? Was there other income? When you say non taxed, do you mean taxes were not withheld or income that is tax exempt?
If it was income that was not taxed but should have been then this could have jumped you to a higher bracket if you had other income. If it was income as an independent contractor and it jumped you to the tax bracket of 35%, that along with the 15.3% Self-employment taxes, it would be possible to pay $20,000 on $46,666.
What all else is equal? W2 Income, Deductions, Credits, and Exemptions are equal
Was there other income? W2 income of $227,137 and $4,000 other income (e.g., Dividends, interest, etc.)
When you say non taxed, do you mean taxes were not withheld or income that is tax exempt? Tax not withheld. The consulting income was paid by check and is not tax exempt.
The 46,666 is self employment income. You will owe about $6,600 self employment tax on it in addition to any regular income tax and it will push you into a higher tax bracket.
Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment. You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400. The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040. The SE tax is already included in your tax due or reduced your refund. The SE tax is in addition to your regular income tax on the net profit.
Here is some IRS reading material……
IRS information on Self Employment
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center
1040 Schedule C Instructions
https://www.irs.gov/pub/irs-pdf/i1040sc.pdf
Publication 535 Business Expenses
https://www.irs.gov/pub/irs-pdf/p535.pdf
If you have your year to year comparison (you can get this in the Online version if you pay for TurboTax, but don't file) it will show you what areas changed.
There are three factors that will determine the size of your refund (or what you owe).
The total amount of income that you have.
The amount you had withheld from your wages.
Whether you qualify for certain tax credits.
Your income determines the amount of tax you owe. This not only includes your wages, but also any other type of income you may have had. A small job that issued a 1099 MISC or NEC can result in significant taxes. Based on criteria established by the IRS there are tables that determine the amount of tax that you owe. Double-check your income entries and make sure they are correct.
The amount you had withheld generally comes from your W-2 income; however, taxes can be withheld from other forms of income. If the taxes withheld are more than what you owe you will get a refund. If not, you will owe money. Again, double-check your entries and be sure they are correct.
You can subtract Tax Credits from the amount of tax you owe. Here are some common Credits:
If you look at your tax return FORM 1040 you can check these entries.
Line 19 Child Tax Credit
Line 27 Earned Income Credit
Line 28 Additional Tax Child Tax Credit
Line 29 American Opportunity Credit (For College)
Line 30 Recovery Rebate Credit
You also may have had more taxes withheld on your income.
Compare your tax credits to what you had last year. This is the most likely place for a large amount to be.