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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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My current tax exemption is at 3 and I had to pay the IRS $8,500

Customer Question

My current tax exemption is at 3 and I had to pay the IRS $8,500 this year. Should I decrease my exemption down to 2, 1 or 0? I am married.
JA: Thanks. Can you give me any more details about your issue?
Customer: Is there a percent withholding associated with each exception? If so, how much so I can try to calculate that amount so I can minimize how much I owe at the end of the year.
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Submitted: 6 months ago.
Category: Tax
Expert:  Lev replied 6 months ago.
If you are married - the next question is - whether your spouse also work - if yes - you may not use "married" on W4In this case - you would better to elect "Married, but withhold at higher Single rate."If however - your spouse doesn't work - you may use "Married"Let me know your total taxable wages - and I will help to estimate your withholding.
Customer: replied 6 months ago.
My wife does not work currently. My taxable income was $180,000 for 2015.
Expert:  Lev replied 6 months ago.
If you have income $180k - all from regular wages - and prepared form W4 as Married with ZERO allowances - your annual pay stub should look as Annual Gross $180,000Federal Withholding $34,991Social Security $7,347Medicare $2,610-Net Pay $135,052.Assuming you file jointly - standard deduction - no other deductions or credits - your estimated tax liability would be $31,684 - so that is less than your federal tax withholding $34,991If you put ONE allowance instead of zero - your expected federal income tax withholding would be $33,857If you put TWO allowances - withholding would be $32,723With THREE allowances - $31,589 - and you will owe ~100.Questions?Not sure how yo get $8500 in additional tax liability...
Customer: replied 6 months ago.
I should of had 3 exemptions.My W2s showed that only my employer only withheld $24,000. I'll have to follow up on that and see why there is such a large disparity.
Expert:  Lev replied 6 months ago.
Based on your information TWO or THREE allowances would be most appropriate.
Expert:  Lev replied 6 months ago.
If you use TWO - you should receive a refund,and if you use THREE - you are expected to owe a small amount.Having $24,000 withheld for federal taxes seems as not correct.I would suggest to communicate with your employer or a payroll person..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.