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I got my W2 in today so I went to HR block's site and filled the form out, excited to see what I was getting back. I put in an extra 25 dollars per paycheck (600 dollars) and I paid 1500 dollars in interest on student loans. Last year I did nearly the same setup, got back like 1200 dollars or something like that. This year.... I owe 58 dollars.
I haven't done anything different. I got a small raise last year (less than $2000). Maybe I missed something?
This thread is kind of useless because if the question is "why do I owe this year" the answer is "because you do" but I just can't understand why my tax cost would have gone up 1300 dollars?
Edward was reminding you to claim one (for yourself) on the tax return (the form you filled out on H&R block), not on your withholding. Maybe you forgot to claim yourself when you did your tax return experiment. Edward was not making a recommendation about altering your withholding on a W4 form, which is what you would submit to your employer to change how much money comes out of your gross pay.
I have always been told to claim zero if I can afford it per paycheck because I get back more at the end of the year. Is that not correct?
Well, that is correct, but what you're refering to is your W4 tax status form that you file with your employer to determine how much tax is withheld from your paycheck, and has nothing to do with your actual tax return filing. On the actual tax form (1040, 1040A or 1040EZ), you need to claim yourself as one dependent, because you do depend on your paycheck, right? Go back to Blocks site and redo the form using yourself as one dependent. It's the proper way to file, and it will make a huge difference. Good luck, let us know how much it changes!
Something must have changed, but, then, it sounds like you are only comparing an 'estimate' on the HRB site. Did you, for example, include tax write-offs on the estimate? My guess is that you are comparing this year's estimate ... with last year's completed return.
The raise could have put you in a higher tax bracket. That's why I like using something like TurboTax every year, as it will give me comparisons across categories. (Like what tax bracket I'm in each year)
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