Related Posts
Any loan facility available in BOA
Conversation Starter
More Posts
Who else gets to take the new BEC exam!? 🙌🏼🙄😢
Additional Posts in Personal Investment Chatter
Is BRK-B a buy right now?
Rising Star
Investor’s Business Daily: worthwhile?
Pro
Anyone looking at airline stocks or ETF play?
Are you investing today?
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
6-figure? If you owed over $100k, you need to fix your withholding earlier than “towards the end of the year “
If you’re making that much you need a tax attorney to give advice.
Alternatively, divide what you owed and start putting half of that each month into your withholding.
Think this person counted the cents as two extra figures. If you owe over 100k in taxes you should not be on this app asking for financial advice.
Whoops 5-figure* hah. It was like $12k. Used a real live tax pro for my 2019 taxes and that ended up being the bill. He advised to raise my withholding via W-4, but Ive been skeptical of the amount and want to see if there is a way I can hit closer to the pin towards the end of the year.
If you didn’t have an underpayment penalty I wouldn’t worry about it.
I was hit with a huge tax bill last year and had to pay penalty. Here’s what I did in 2020. I added extra withholding for both federal and state. So, at each paycheck, i was paying an additional $$. Then, in early November, I checked my paystub to see how much federal taxes I have paid this year and same for state. Based on that, I adjusted my extra withholding amounts in the paycheck for rest of the year. In December, most of my paycheck went to the Government 😨
As someone pointed out in an earlier reply, base the extra withholding on your tax liability from the previous year and any significant events like selling stocks, increased dividend income in brokerage, etc. As for calculators, you can check out https://www.irs.gov/individuals/tax-withholding-estimator I would use it for an estimate only.
ED1 (😂) is right. Consult a real-life tax professional. Online calculators start to go FUBAR when dealing with multiple income sources—unless it’s an even 50/50 between W-2 earnings.
Talking to an expert could reduce your taxes, whereas updating your W-4 merely spreads your tax bill across the year.
Hey! Don’t make fun of my inabilities, I mean my initials!
Did you not take any tax deductions through the entire year? If so, I recommend putting aside in a bank account the money that you would have owed in taxes for each paycheck if you don’t want to give the government an interest free loan throughout the year
Not to be critical here - but if you’re really paying in that much at YE you would know that you need to be making quarterly estimated tax payments. If you owe more than $1k this is recommended to avoid underpayment penalties at YE
Just read the W4 instructions and you ll figure out what exemptions you should set.