The simplest answer is the amount you had withheld is less than what your tax liability is based on the amount of income you earned minus any deductions. This could be for several reasons.
- You were self-employed and have a liability for Self-Employment Taxes. These taxes are 15.3% of your profit. So if you made a profit of $10,000, you would owe $1,530 for self-employment taxes. If this is your situation, you should be making quarterly estimated payments to cover your SE taxes and avoid penalties.
- You had multiple jobs and each employer withheld enough to cover the wages you made with them, but when you combine your wages from multiple employers you are in a higher tax bracket and neither employer withheld at the higher rate. If you have multiple employers, you may want to complete a new W4 form for the one you make the most for or even for 2 of them. You will want to complete section 2 and probably section four to have an additional amount withheld every pay period. You can calculate the amount extra to be withheld, if your job situation is not expected to change, by dividing your $1,700 due by the number of pay periods you have in a year (usually 26 or 52) and entering that on line 4c.
- You claimed an exemption on your W-4, or you did not update it. For example, you had a child that was 15 when you started the job, but now they are 17 and no longer eligible for the child tax credit or your filing status has changed.
- You made a typo when entering your income.
In the meantime, if you are unable to pay your taxes in full, you should still file by April 18th, but you can apply for a payment plan from the IRS. When you get to the end of TurboTax, prior to hitting file, it will give you the option to apply.
Be sure to go through all the questions in TurboTax to make sure you did not miss any credits or deductions.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
