- quote -

Everything did not remain stable. You increased your
withholding allowances from 3 to 5, which means you had less
tax withheld from your pay. And your income was
significantly higher. You have given very little detail, but
basically you made more money and had less tax withheld.
With those changes, it's no surprise that you owe tax at the
end of the year.

Bob Sandler

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"Navigatore" <navigat...[at]piratesoflove.de> wrote:

- quote -

Let's see... did your 15% increase exceed the extra two
exemptions? Why not compare the two years to spot the
differences?

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"Navigatore" <navigat...[at]piratesoflove.de> wrote:

- quote -

Easiest way to find out why there is a difference is compare
last year's tax return side-by-side with your current tax
return.

That should show you what caused any increases in taxes or
decreases in deductions/credits.

Rudy
www.LizcanoTaxServicesLLC.com

Disclaimer: The posted answer is for educational and
guidance purposes only and Lizcano Tax Services, LLC and/or
Rodolfo Lizcano have not been engaged to render any tax,
accounting, legal, or other professional services.

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navigatore[at]piratesoflove.de posted:

- quote -

Do you mean your W4? That's where you claim exemption
numbers, and it affects the amount of tax withheld.

- quote -

Given the reduction in withholding, and your reported 15%
increase in earnings, it would be a miracle if your tax bill
didn't rise -- substantially.

You probably need a little more tax advice.

Bill

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"Navigatore" <navigat...[at]piratesoflove.de> wrote:

- quote -

Print out your tax return for each year and then compare the
amounts on each line item. This line-by-line comparison
should point you to the increases and with the software you
can look at what the differences are (you may have entered
something by mistake)

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"Navigatore" <navigat...[at]piratesoflove.de> wrote:

- quote -

Withholding allowances are claimed on form W-4. They result
in an ESTIMATED amount of tax being withheld during the
year. By increasing from 3 to 5 allowances you have elected
to have LESS withheld from your paycheck, resulting in an
underpayment situation this year.

- quote -

Basically, your problem is that you are not having enough
withheld from your paycheck each pay period, because you
increased the number of withholding allowances on your form
W-4. Adjust that number to more correctly withhold and you
should be OK for 2007.

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I am afraid that my question may be too basic for this
forum. Bear with me for a moment as I have decided this year
to take on my tax return myself so I am on a learning curve.
I think my tax situation is fairly straightforward (no real
estate, just a few investment but nothing major). I used
Turbotax and arrived at a point where I am wondering wether
I should let it go and go back to by tax consultant.

I filed federal and 2 states (NY, CT) last year and got a
sizeable federal refund and owed quite a bit to New York. I
live in NYC and work in CT. I am filing joint married.
Last year my W2 listed 3 excemptions/allowances, this year
there are 5.

Turbotax calculated for me that I owe this year for federal
tax. While my income is appr 15% higher then last year I
wondering how this is possible that my refund situation from
last year turned into oweing money this year. I do
undertand that there are a number of factors that may
influence this. I do think though that overall everything
remained stable and I am more looking for the reasons that
may have changed my tax situation this year.

Thanks in advance

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