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Turbotax says we owe $1250-anything we can do to lower?

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Nothing has changed, we claim what we always claim and we either get a little back or we break even. But for some reason turbotax is saying we owe $1255 this year. Is there anything we can do to significantly lower this? The only thing we have on turbotax is my salary husbands salary, my student loan and a small savings account. I claim 1, husband claims 0. When we entered husbands, we were getting $1400 back. Once he entered mine, we now owe $1255. Is there anything we can do? We haven't paid for turbotax yet (we didn't complete the return). . .is it worth it to see if HR Block can bring the amount owed down? or will everyone pretty much come up with the same thing?

 

Also, for next year. . any tips on how to legally evade taxes?! I know celebs and pro athletes do it. . .what's the secret?

Edited by Chicago

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Increase your withholding for next year.

 

I think there is an IRS form you can fill out to pay your taxes owed in payments spread out over the year if there is no way you can come up with all of it. I don't remember what it's called, my sister took care of it for me.

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When you say all you have is your student loan, do you mean the interest deduction on student loan payments?? If you took out a student loan during the year, it is a loan and not income. Some students believe their student loan proceeds are taxable.

 

You still have time to contribute to an IRA for 2010 until April 18th if you qualify. Only a traditional IRA will help, a Roth will most likely not.

 

I'm noticing my tax bill is significantly larger this year, too. :cry2:

Because everything was so last minute because of all the infighting, I'm wondering if those preparation programs are correct? I'm going to cross check by paper.

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You still have time to contribute to an IRA for 2010 until April 18th if you qualify. Only a traditional IRA will help, a Roth will most likely not.

 

I was going to suggest the same thing. An IRA (non-Roth) contribution is one of the few things you can still do to change the bottom line number.

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When you say all you have is your student loan, do you mean the interest deduction on student loan payments?? If you took out a student loan during the year, it is a loan and not income. Some students believe their student loan proceeds are taxable.

 

You still have time to contribute to an IRA for 2010 until April 18th if you qualify. Only a traditional IRA will help, a Roth will most likely not.

 

I'm noticing my tax bill is significantly larger this year, too. :cry2:

Because everything was so last minute because of all the infighting, I'm wondering if those preparation programs are correct? I'm going to cross check by paper.

 

How does this work? I don't know anything about IRAs. Thank you! We'll be buying a house (hopefully if we can clean up some weird things on our credit report) in June or July hopefully. ..would that affect or be impacted by the IRA?

 

I have a student loan from like 15 years ago (federal Sallie Mae) and we always add it to turbo tax. .it lowers what we owe for some reason.

 

No education credit for this year.

Edited by Chicago

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I would try Tax act and H&R block and compare all three before submitting the form. I've noticed usually when getting a refund that they vary between the three. Tax act shows I'm getting back 2200 from fed and 700 from state, H&R block shows only 1,300 and 400 for state and I haven't even entered 1 W2 yet. I'm wondering if some software hasn't updated with the new taxes yet.

 

Are you close to the AMt? (alterinative minium tax?)http://www.irs.gov/businesses/small/article/0,,id=150703,00.html

 

are you claiming the actual loan or just interest that you paid through the year?

 

Tax act actually lets you fill out the forms according to what form you have.

Are you renting? Can you claim homestead credit? (that is if you have state taxes)

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I would try Tax act and H&R block and compare all three before submitting the form. I've noticed usually when getting a refund that they vary between the three. Tax act shows I'm getting back 2200 from fed and 700 from state, H&R block shows only 1,300 and 400 for state and I haven't even entered 1 W2 yet. I'm wondering if some software hasn't updated with the new taxes yet.

 

Are you close to the AMt? (alterinative minium tax?)http://www.irs.gov/businesses/small/article/0,,id=150703,00.html

 

are you claiming the actual loan or just interest that you paid through the year?

 

Tax act actually lets you fill out the forms according to what form you have.

Are you renting? Can you claim homestead credit? (that is if you have state taxes)

Thanks beli! I looked at that link but don't really understand it? If we're eligible for AMT what does that mean?

 

we're claiming the interest we paid through the year.

 

We rent.

Edited by Chicago

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I would try Tax act and H&R block and compare all three before submitting the form. I've noticed usually when getting a refund that they vary between the three. Tax act shows I'm getting back 2200 from fed and 700 from state, H&R block shows only 1,300 and 400 for state and I haven't even entered 1 W2 yet. I'm wondering if some software hasn't updated with the new taxes yet.

 

Are you close to the AMt? (alterinative minium tax?)http://www.irs.gov/businesses/small/article/0,,id=150703,00.html

 

are you claiming the actual loan or just interest that you paid through the year?

 

Tax act actually lets you fill out the forms according to what form you have.

Are you renting? Can you claim homestead credit? (that is if you have state taxes)

Thanks beli! I looked at that link but don't really understand it? If we're eligible for AMT what does that mean?

 

we're claiming the interest we paid through the year.

 

We rent.

AMT fix: $137 billion More than 20 million tax filers will be protected from having to pay the so-called "wealth tax," otherwise known as the Alternative Minimum Tax

For tax year 2010, the bill will raise the amount of income that is exempt from the reach of the AMT to $47,450 for individuals and to $72,450 for couples filing jointly. In 2011, those exemption amounts will increase to $48,450 and $74,450 respectively.

 

If you hit the AMT you actually get taxed more, which is why I asked if you hit the AMT. It's actually not a deduction.

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For the OP, you said "I claim 1". You don't have a w-2 so what exemption are you claiming?

Student loan interest is deductible if you meet income requirements.

 

I just did a quick and dirty chicken scratch on a paper 1040 with a a calculator.

I'm getting a refund with paper and pencil.

H&R Block software said I owe.

Gotta love it. :rolleyes:

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Is TaxAct free to file?

 

This thread got me curious since my refund shrinks every year and always use TurboTax so now I want to compare.

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H&R Block is the same thing as Turbo Tax except they ask you the questions outloud and charge twice as much. I hate that place.

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H&R Block is the same thing as Turbo Tax except they ask you the questions outloud and charge twice as much. I hate that place.

 

H&R Block online.

I would never pay those outrageous charges for tax prep in person.

They are paid to upsell, filing a 1040 long when you only need a short or EZ.

If my return was that complicated, I'd get an accountant.

 

And a good bail bondsman. :lol:

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H&R Block is the same thing as Turbo Tax except they ask you the questions outloud and charge twice as much. I hate that place.

I did my taxes in H&R block and Turbo tax.. H&R block still had me getting way less then Turbo tax and Tax Act. Tax Act & Turbo tax were about the same minus one or two dollars between fed and state so I went with Taxact.. was cheaper.

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So my TaxAct refund is identical to my TurboTax refund...$100 fed and $27 state :cry2:

Edited by foeplay

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So my TaxAct refund is identical to my TurboTax refund...$100 fed and $27 state :cry2:

 

Congrats on properly managing your W-4 and keeping control of your own money. :)

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You still have time to contribute to an IRA for 2010 until April 18th if you qualify. Only a traditional IRA will help, a Roth will most likely not.

 

I was going to suggest the same thing. An IRA (non-Roth) contribution is one of the few things you can still do to change the bottom line number.

If their income is low enough, they might be able to take the retirement saver's credit with a Roth.

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Because everything was so last minute because of all the infighting, I'm wondering if those preparation programs are correct? I'm going to cross check by paper.

 

This. I'm waiting until at least the end of Feb. before I file. Didn't I hear that for people who itemize instead of standard deductions that they have to wait until around Feb. 14th because of this issue? I use Web Turbo Tax and right now, it looks like I will come out roughly the same as the past few years...owing around $300 Federal and owing about $225 state. I probably ought to go ahead and change my withholding just those few dollars to come out closer to even.

 

Also, for the OP, just wanted to make sure you are using the numbers from the actual W2 and not your last paystub of the year. My W2 is always different from the last paystub re: income.

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Because everything was so last minute because of all the infighting, I'm wondering if those preparation programs are correct? I'm going to cross check by paper.

 

This. I'm waiting until at least the end of Feb. before I file. Didn't I hear that for people who itemize instead of standard deductions that they have to wait until around Feb. 14th because of this issue? I use Web Turbo Tax and right now, it looks like I will come out roughly the same as the past few years...owing around $300 Federal and owing about $225 state. I probably ought to go ahead and change my withholding just those few dollars to come out closer to even.

 

Also, for the OP, just wanted to make sure you are using the numbers from the actual W2 and not your last paystub of the year. My W2 is always different from the last paystub re: income.

 

People who itemize will have to wait until Feb 14th to have their returns processed. You can file, it just won't be 'accepted' online or processed by paper until then. You can look at IRS's website to see updates and revisions to publications and instructions for certain items.

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Last year I only got a refund because of the Making Work Pay credit.

 

This year, it appears we may qualify for the Earned Income Credit (which I was not expecting, but probably should have considered because DH quit his job last semester due to his school schedule). I was worried about not having enough taken out of my check, especially after a raise (because as of September I still hadnt had any taxes taken out), so I changed my W-4. I shouldn't have done that.

 

Of course, I'm just guesstimating what DH made last year as we haven't received his W2 yet. I plan on entering it through Turbotax and Taxact and compare the results.

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So my TaxAct refund is identical to my TurboTax refund...$100 fed and $27 state :cry2:

 

Congrats on properly managing your W-4 and keeping control of your own money. :)

YES thank you. Everyone is all shocked when I say I'm not getting any/much money back, but I'm like, don't be sorry I didn't lend the government money with 0% interest for a year. I'm good.

 

Fill out your W-4 correctly and you should be good, granted there are situations where it gets much more complicated, but in essence people should remember it's not 'better' to get a tax refund, that's just money you should have already had.

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So my TaxAct refund is identical to my TurboTax refund...$100 fed and $27 state :cry2:

 

Congrats on properly managing your W-4 and keeping control of your own money. :)

YES thank you. Everyone is all shocked when I say I'm not getting any/much money back, but I'm like, don't be sorry I didn't lend the government money with 0% interest for a year. I'm good.

 

Fill out your W-4 correctly and you should be good, granted there are situations where it gets much more complicated, but in essence people should remember it's not 'better' to get a tax refund, that's just money you should have already had.

Thanks everyone! We DID get W2s and that is what we used for turbo tax. Maybe we'll go ahead and do it on paper and see how it comes out. So when you do it on paper, you find out right away how much you owe or are getting back? I'm assuming I can get the paper return at IRS.gov?

 

 

Oh I'm with rebuilding on this one, I do NOT like the idea of lending the govt. money. That's why one always claimed 0 and one claimed 1 bc in the past we almost broke even but usually got a little back. Some years we got about 1-2k back, but I liked breaking even. Kind of felt like sticking it to the govt. :)

 

We made 80k together last year so we're over the 74k AMT.

 

How much would we have to put into an IRA to have what we owe brought down to $0? (right now we owe $1,255)

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With a $80K combined income, I believe you are in the 25% tax bracket, so you need to contribute $5020 to a traditional IRA to completely wipe out the tax bill. The maximum that can be contributed to a single IRA account per year is $4000, unless the individual is over 50 years of age, in which case the individual can contribute an additional $1000 (total $5000).

 

If you want to contribute just enough to reduce your tax bill to zero, please contribute $2510 to a traditional IRA in each of your names.

 

But if you have the funds, I'd seriously suggest to contribute the difference between the maximum ($5000 or $4000 as the case may be) and the $2510 required for traditional IRA, into a ROTH IRA ($1490 or $2490 EACH, depending on whether you are below 50 years of age, or over). Your contributions are tax free, earnings are going to be tax free and your future earnings in the Roth IRA are also going to be tax free.

 

This can be your "emergency fund" if you so choose (contributions can be withdrawn as long as they are in the account for at least 5 years).

 

Best of luck.

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To those who say they get more back from one tax program over the other, I would like to know more about the differences. They both use the same rules and tables so they should be the same. There is probably an error in what you put in on at least one. There is room for interpretation, but at least simple returns should be identical. Also getting more back isn't necessarily better, especially if that amount is the one that is wrong. The best thing to do is look at the differences and why, and then determine which one is right. I think it would be interesting for someone to post what the differences are.

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