#1 Posted by AcidBrandon18 (793 posts) -

I recently did my taxes on Turbo Tax for the first time. I have never done my taxes before and when I told people that I owed federal a chunk of money they were surprised. So I feel that I might be doing something wrong. I am 21, a full-time student at my local university, I have two jobs that together give me roughly 20-hours a week. I recently got my1098_T after already sending out my taxes. My friends said that it would be stupid for me not to include the 1098 form as I'd be missing out on money. So I added it and it turned out that I owed federal even more money. What am I doing wrong? On one of my W-2's I have $0.51 Federal Income Tax withheld. Is that bad? Any help from you smarter duders would be greatly appreciated.

#2 Edited by Chaser324 (6744 posts) -

If you only had $0.51 withheld from your paychecks, it's not too surprising that you would owe some money. How many allowances did you claim on your W-4? I suspect that might be where you messed up.

I also don't really understand how entering in your tuition info could make it go up. I've never heard of that happening for anyone.

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#3 Posted by AcidBrandon18 (793 posts) -

Yeah, that is probably why I owe money. My 1098 form showed all of the financial aid that I received so maybe that is why it went up?

#4 Edited by Chaser324 (6744 posts) -

Did you have enough financial aid to cover your tuition and get some money back? In that case, that counts as income and is subject to taxes just like all of your other income sources.

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#5 Edited by AcidBrandon18 (793 posts) -

I got a refund check from the university so I think that is why my taxes went up when I added that form.

#6 Edited by cmpLtNOOb (198 posts) -

This is all gibberish to me, I am going to have a lot of trouble figuring all this out when I can finally start getting steady income and not have to rely so much on my parents...

#7 Posted by AcidBrandon18 (793 posts) -
#8 Posted by Aegon (5839 posts) -

How long do taxes generally take to do?

#9 Posted by Demoskinos (15156 posts) -

I say just have a professional do it. Yeah, you have to pay them but in the end you don't have to bother with the headache of trying to keep current with all the constantly fluxuating tax laws and can often find deductions you didn't even know you were eligible for.

#10 Edited by AcidBrandon18 (793 posts) -

@aegon: I think it took me about an hour and a half. You are basically just copying things from the W-2 forms you get from work.

#12 Edited by daedelus (100 posts) -

I would advise just doing the free online fillable forms version of the 1040EZ. I don't think your situation is complex enough to warrant paying anyone to do it for you or getting fleeced out of $10 by TurboTax. I'm guessing you wen't over the $9750 mark and do need to file, but the document below tells you everything you need to know. Not witholding anything isn't a bad thing. It just means there is nothing the government is holding that you could get back.

They have step by step instructions:

http://www.irs.gov/pub/irs-pdf/i1040ez.pdf

If you are going to college you should be able to handle it. It really isn't that confusing. Next year do it yourself I think you will agree it's not that bad.

#13 Posted by Fattony12000 (7568 posts) -

God, PAYE is so sweet.

#14 Posted by RPGee (763 posts) -

I was coming in to this forum thinking someone just didn't understand the purpose of taxation. I'm disappointed that it wasn't that, since that might have been fun explaining, but at least you get, by the look of it.

And reading all that, I have no idea what all those forms mean. The socialist side of this country must be getting to me.

#15 Posted by jdh5153 (1034 posts) -

@cmpltnoob: Yeah. Taxes are no fun. lol

They're quite fun. Only take about 20-30 minutes on TurboTax and I got a sizable refund that allowed me to pick up an iPad :p.

#16 Posted by FinnianWhitefir (15 posts) -

I usually pay. When you got hired you filled out a W4 that amounts to how much money you want taken out from each paycheck in taxes and following their instructions amounts in a low number and you pay. Many people set that higher purposefully because they would rather get money back than have to come up with money to pay.

Make sure you send another check with the difference, as if the government doesn't have all you owe by April 15th it can fine you a bunch.

I also suggest doing your own forms. I make a decent amount, have no deductions, and just do basic math on the 1040EZ form every year for 15 minutes. Though when you are a poor college student there might be things like rent deduction and such which you'd never know about unless TurboTax asks you.

#17 Posted by AcidBrandon18 (793 posts) -

@daedelus: I actually earned less then $9750 and my mother has me as a dependent. Does that mean I don't have to file?

#18 Posted by Aetheldod (3735 posts) -

Ahhh taxes .... the modern way governments use steal you more money

#19 Edited by believer258 (12201 posts) -

@rpgee said:

I was coming in to this forum thinking someone just didn't understand the purpose of taxation. I'm disappointed that it wasn't that, since that might have been fun explaining, but at least you get, by the look of it.

And reading all that, I have no idea what all those forms mean. The socialist side of this country must be getting to me.

I was expecting to see the same thing. Now I feel stupid because I see all these fucking form numbers and I can't make heads or tails of those, much less tax law in general.

#20 Posted by Example1013 (4807 posts) -

Ahhh taxes .... the modern way governments use steal you more money

The only thing "modern" about taxes is the fact that you can do them on the computer now lol.

#21 Posted by Voshterkoff (125 posts) -

On one of my W-2's I have $0.51 Federal Income Tax withheld. Is that bad?

Thanks for the laugh.

#22 Posted by BlatantNinja23 (928 posts) -

@aegon: if you still live with your parents and only have one job it takes like a minute or two. The more complicated your life and where you get money the more you have to go through. All I have yo do is deducted some college textbooks. Hell nowadays you can just take a picture of your w2 and it will file that for you if your taxes really are that simple.

@acidbrandon18: hopefully this go around with taxes you'll realize it's smart to overcompensate with the amount you let get deducted from your paycheck. Personally I'd rather make a little less and get a nice check paying me back at the winter/spring than make more and realize I own the government money.

#23 Posted by MB (13134 posts) -

America is a land of taxation that was founded to avoid taxation.

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#24 Posted by McGhee (6075 posts) -

U.S. tax law is such a load of unnecessarily complex bullshit that no one completely understands it.

#26 Posted by ImmortalSaiyan (4702 posts) -

I don't understand a lot of things. Taxes being one of them.

#27 Posted by MB (13134 posts) -

@daedelus: I actually earned less then $9750 and my mother has me as a dependent. Does that mean I don't have to file?

You should just get on TurboTax.com and start going through the process. It's free and will let you know if you even need to file or not.

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#28 Edited by daedelus (100 posts) -

@acidbrandon18: From the 1040EZ instructions:

So since you are being claimed as a dependent the correct number is if you made under $5950 you don't have to file. The $9750 is if you are not claimed as dependent. If you do have to file you might have to use form 1040A because of the 1098-T form, but I am thinking you don't. I still think you can just use the 1040EZ next time as long as your situation is the same.

Basically gather all your forms then use the charts in the instructions to figure out which specific form you have to file. This explains what forms to use based on what you got in the mail:

#29 Edited by Bourbon_Warrior (4523 posts) -

Tax refunds are the best, like a mid year christmas

#30 Edited by TyCobb (1975 posts) -

The main reason you owe is that you work 2 different jobs. They each take out money that you would owe as if they were your sole job. The money coming out of each check is purely speculative that money you earned is what determines your tax bracket. The other job is doing the same thing. Problem is that them combined is throwing you into a different bracket and not enough money has been taken out of your checks.

Edit: I would also like to point out that the best scenario is that you don't get money back and you don't owe anything. Getting money back is because you paid the government too much and they got to make interest on your mistake. You owing is because you didn't pay enough. It is nice to get money back, but it's not free money; they are just giving you your money back.

#31 Posted by AcidBrandon18 (793 posts) -

@daedelus: This helps out alot. Thank you.

And thanks to everyone who has chipped in their two cents. I now have a slightly better understanding of taxes now.

#32 Edited by SSully (4326 posts) -

This is the first year I owed money, but that's because my internship paid me a stipend that was non-taxable(I may have that backwards). Either way I had to pay about 800 bucks, which honestly is less then I expected.

#33 Posted by Clonedzero (4196 posts) -

its kinda sad that our taxes are so complicated that there is an entire career path for doing taxes for other people.

#34 Posted by Pr1mus (3950 posts) -

I don't understand them either so i decided not to work for a whole year. It's simpler that way.