For the last three years, my wife and I have come up short on our taxes. The amount withheld from our paychecks has been insufficient to cover what we owed.
This post may come as a shock to some of you, but the gist is this: The current withholding system is not necessarily designed to collect what you will owe.
Every year it’s the same deal. Get the taxes done and then be subjected to intense sticker shock as we realize we’re fucked. We don’t mind being good Americans and paying our fair share but this is ridiculous.
Each time this happens we immediately fill out new W-4 forms based on the recommendation of our tax preparer and submit them to our employers.
I have no doubt that I’m going to be forced to cough up more dough for 2009. With that in mind, I decided to finally take some action and figure out just what in the hell is going on.
In my grubby little hands I’m holding my first paystub of this infant year. Everything that happened this pay period exactly matches my year-to-date totals. What an exciting time. I very carefully scrutinized the amount withheld for federal withholding. It seems small. Damn small.
I went to the internet and found this page. The “2010 Withholding Calculator” on the official IRS website. I went through their five-page process and got a “page not found” error as the result. Typical.
I was determined, though, and not to be deterred so easily. I tried it again. Einstein said that the definition of insanity is doing the same thing and expecting a different result. Guilty as charged! The insanity, however, is that on the second attempt it worked. Holy … fuck … shit.
Anyway, this story is not about the IRS’ ability to maintain a working web site.
The IRS web site had excellent advice for us. “You and your spouse should each enter 0 on line 5 of all of your Forms W-4.” No shit, Sherlock!
But wait, there’s more. Here’s the good part (my emphasis added):
Divide $X by the number of paydays remaining in 2010 (or use the table below to find this amount), and enter the result on line 6 of any one of your Forms W-4. This is the extra amount you need to have withheld each payday to ensure that you do not have too little withheld. Alternatively, you may split the $X between any of your jobs, by entering on line 6 of each Form W-4 the portion of this amount to be withheld from that job, divided by the number of paydays remaining in 2010 for that job.
There you have it, in writing, from the horse’s mouth. Claiming zero exemptions is not enough. You have to withhold additional amounts or you’ll be fucked. I must be an idiot, because I thought that was exactly what the fucking system was designed to do. When the hell did that fucking change?
You have all been warned. Save extra coins for the King or you’ll receive an unpleasant visit from the tax collector. You can thank me later.
“When the hell did that fucking change?”
Didnt you vote for change?
Dude, why do you ignore my polite requests to not hijack every post with your hatred? Make your answer good or I’m likely to do something that will send you running around screaming about “censorship,” which, of course, would be just as false as almost everything else you have to say.
Hint: Prove that the problem I just described has one fucking thing to do with Obama. If not, you just might be in trouble. Did I not go to the effort of making you your very own sandbox on my blog???
Hatred? I just said you voted for change and I stayed on topic by quoting you. What more do you want?
If you are angry about being shafting on taxes, which no doubt you are. Dont shoot the messenger. And if you didnt expect to get shafted on taxes, well you have no one to blame but yourself.
But since I am a nice guy, I give you a tax tip on how to save money. Use TurboTax. It worked for Timothy Geitner. 🙂
Wrong answer. Thanks for playing.
We learned this the hard way a few years ago, claiming ‘zero’ is not enough. It’s a sad, sad world! Hope your new year is going well, other than the whole taxes thing! 🙂
We can never get the withholding right. You want to withhold enough that you don’t owe too much, resulting in a penalty, but you don’t want to give the government too much (it just encourages them to spend more…) so that you are owed a refund, but lose the interest (a whopping one percent these days) on the money they have of yours until they return it to you. Of course, it’s never really our money to begin with, it’s just what they begrudgingly allow us to keep until they can figure out new ways to get their hands on it.
I know this makes me sound like a dumb ass, but I really thought the thing about claiming “zero” was that you’d get a big fat ass refund. I finally connected the dots today and realized that the situation is totally FUBAR and that is no longer true. It was a very eyeopening and fucktastic moment. Now I realize what I’ve been fighting the last few years. Finally I can take some intelligent and proactive action.