Results 1 to 15 of 15

Thread: Am I paying too much in taxes?

  1. #1
    Veteran Member littlelizard's Avatar
    Joined
    May 2014
    Posts
    368
    Thanks
    359
    Thanked 470 Times in 194 Posts

    Default Am I paying too much in taxes?

    I just filed my taxes with turbo tax and I owe the Federal and State a combined total of $6,500. I feel like this is this super high because my documented income is only $40,000. I didn't even include my tips or else I would of owed over $13,000. My return was accepted by both the IRS and California. Should I go somewhere else to refile my taxes? Or does paying $6,500 in taxes seem reasonable on an income of $40,000? I'm a student and put down my total deductions as $13,000. My coworker said she knows a tax guy who specializes in independent contractors, but he charges $250 and I don't want to waste any more time and money if my return is not going to be significantly lowered. Thank you!

  2. The Following 2 Users Say Thank You to littlelizard For This Useful Post:


  3. #2
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: Am I paying too much in taxes?

    You don't give enough information to say if your return is accurate or not. But, the rule of thumb is for an independent contractor your total state, federal, social security and medicare taxes will be around 30% of your gross income. But, to say with any degree of certainty, we would need to know if you are a dependent, or not. We would need to know if you have any dependents or not. We would need to know your total income from whatever source derived, all your deductions, all the other taxes you have paid during 2015 and all your tax withholding. We would also need to know your state income tax refund from 2014 that was paid in 2015. If you have other unreported income, all I can say is you are under an obligation to report it and pay taxes accordingly.

    HTH
    Z

  4. The Following 2 Users Say Thank You to Zofia For This Useful Post:


  5. #3
    Curious Guest ClubDreaming's Avatar
    Joined
    Mar 2016
    Posts
    3
    Thanks
    1
    Thanked 5 Times in 2 Posts

    Default Re: Am I paying too much in taxes?

    If you didn't pay any taxes throughout the year, Fed, State, SS, etc. yup it could be that high. If you followed tubo tax correctly they most likely got it right. Independent contractors can get burnt at the end of the year if your not used to it, paying or putting some aside. But the IRS has a payment plan option so you don't have to pay it all at once.

  6. The Following 2 Users Say Thank You to ClubDreaming For This Useful Post:


  7. #4
    Veteran Member littlelizard's Avatar
    Joined
    May 2014
    Posts
    368
    Thanks
    359
    Thanked 470 Times in 194 Posts

    Default Re: Am I paying too much in taxes?

    Well $6500 is well under the 30% mark. I am not a dependent and I have no dependents. I had no tax withholding throughout the year and received a refund last year because I didn't work as an independent contractor. $40,000 is my entire documented income. I have a good sum of money saved but like fuck $6500 digs a really nice hole into my savings.

  8. The Following User Says Thank You to littlelizard For This Useful Post:


  9. #5
    God/dess Vyanka's Avatar
    Joined
    Aug 2004
    Location
    Cash-Stack-istan Island
    Posts
    14,704
    Thanks
    6,564
    Thanked 11,625 Times in 3,697 Posts
    My Mood
    Angelic

    Default Re: Am I paying too much in taxes?

    That ass raping number sounds about right to me.

  10. The Following 6 Users Say Thank You to Vyanka For This Useful Post:


  11. #6
    God/dess
    Joined
    Sep 2006
    Posts
    7,964
    Thanks
    6,155
    Thanked 10,183 Times in 4,602 Posts

    Default Re: Am I paying too much in taxes?

    If you're a student, did you include any tuition tax credits?

  12. The Following 2 Users Say Thank You to eagle2 For This Useful Post:


  13. #7
    Veteran Member littlelizard's Avatar
    Joined
    May 2014
    Posts
    368
    Thanks
    359
    Thanked 470 Times in 194 Posts

    Default Re: Am I paying too much in taxes?

    ^ I did. I put in all of my student information and received like $150 off. Whoop de doooo!

  14. #8
    God/dess
    Joined
    Sep 2006
    Posts
    7,964
    Thanks
    6,155
    Thanked 10,183 Times in 4,602 Posts

    Default Re: Am I paying too much in taxes?

    It says here, it is a tax credit of up to $2,500 of the cost of tuition, fees and course materials paid during the taxable year.

    https://www.irs.gov/uac/American-Opp...ns-and-Answers

  15. The Following 3 Users Say Thank You to eagle2 For This Useful Post:


  16. #9
    Member
    Joined
    Jul 2015
    Location
    Southeast
    Posts
    35
    Thanks
    14
    Thanked 46 Times in 25 Posts

    Default Re: Am I paying too much in taxes?

    Any education credits or tuition, expense deduction are based on the amount paid in excess of non taxable tuitions and grants. There are other restrictions, but this is the significant one. The other restrictions are definitions of what is an educational expense ( tuition, books, fees, etc.). Room and board are not considered education expenses for the credit.

  17. The Following User Says Thank You to zerorg For This Useful Post:


  18. #10
    Veteran Member littlelizard's Avatar
    Joined
    May 2014
    Posts
    368
    Thanks
    359
    Thanked 470 Times in 194 Posts

    Default Re: Am I paying too much in taxes?

    Thank you I do qualify for the American Opportunity Credit!!!! eagle2 you just saved me $703

  19. The Following User Says Thank You to littlelizard For This Useful Post:


  20. #11
    God/dess
    Joined
    Sep 2006
    Posts
    7,964
    Thanks
    6,155
    Thanked 10,183 Times in 4,602 Posts

    Default Re: Am I paying too much in taxes?

    Glad I was able to help.

  21. #12
    God/dess ahmeerah's Avatar
    Joined
    Jan 2007
    Location
    Center of the World.
    Posts
    3,128
    Thanks
    66
    Thanked 82 Times in 51 Posts
    My Mood
    Breezy

    Default Re: Am I paying too much in taxes?

    I definitely recommend hiring an accountant in the future. I'm so happy I started doing that. Made a WORLD of difference.

  22. The Following User Says Thank You to ahmeerah For This Useful Post:


  23. #13
    Veteran Member Candycups's Avatar
    Joined
    Oct 2014
    Location
    USA
    Posts
    233
    Thanks
    234
    Thanked 501 Times in 172 Posts
    My Mood
    Cheerful

    Default Re: Am I paying too much in taxes?

    ^^ It's definitely good to be frugal -- if you weren't as good at saving money as you were, that 6k would probably hurt a lot more than it does. Still, if you're making 40k, $250 isn't that much money, especially if it'll put more money in your pocket in the long run. Plus, accountant fees are usually tax deductible anyways. I'd say it's worth it. If nothing else, use one for a year or two while you brush up on how to do them yourself. Then while you're learning, you have someone doing it right. IMO, the value of my time alone makes an accountant worth it any year. Spending literal days where every waking hour is spent trying to work through taxes and get the most bang for my buck, not counting all the stress that comes with it, holy yeesh. $250, I can write it off, and someone will do it for me? *And* probably do a better job? By all means, go right ahead.

  24. The Following 2 Users Say Thank You to Candycups For This Useful Post:


  25. #14
    God/dess arielbriel's Avatar
    Joined
    Nov 2010
    Posts
    4,942
    Thanks
    20,254
    Thanked 7,454 Times in 2,760 Posts

    Default Re: Am I paying too much in taxes?

    I agree!^ He writes off his fee so it's really a win-win.

  26. #15
    Curious Guest
    Joined
    Apr 2016
    Posts
    4
    Thanks
    0
    Thanked 1 Time in 1 Post

    Default Re: Am I paying too much in taxes?

    Tax deadline is just two weeks away .... I just got my taxes done using a professional accountant/tax preparer - very knowledgeable in self-employment income and tax credits and deductions. I was really happy with his services and felt that I saved quite a bit of money and headache by going to him. Checkout his website if you like.

Similar Threads

  1. paying someone to do your taxes?
    By sweet-pea in forum Dollar Den
    Replies: 9
    Last Post: 10-06-2008, 06:24 PM
  2. Paying Taxes?
    By [email protected] in forum Dollar Den
    Replies: 9
    Last Post: 01-16-2006, 07:44 PM
  3. Paying Taxes?
    By [email protected] in forum Private Party Dancing
    Replies: 10
    Last Post: 01-16-2006, 07:44 PM
  4. Paying taxes vs. not paying taxes
    By icechic in forum Dollar Den
    Replies: 28
    Last Post: 05-07-2005, 07:44 PM
  5. Not Paying Taxes
    By Pixie in forum Dollar Den
    Replies: 3
    Last Post: 03-12-2004, 02:39 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •