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Visitor I

Why do I owe IRS money this year?

Hey everyone,

This is my first year owing money to the irs.

In 2016 I made 12,598.79 and withholded 250.16 to federal. I didnt owe them money then, but then...

In 2017 I made 10,926.52 and withheld 119.88. I got a letter today saying I owe 316 dollars.

On the turbo tax side it shows the 316 in green, like I should be receiving this.(but I dont think this is an error on their side,nor do i really care. Just wanted to state it.)

Other things to note are:

I've been at the same job for each w-2. I havent altered my withdrawal amount(doesnt mean my company didnt).


So, how could I owe federal taxes when I earned less?
1 Comment
AJ
Member III

Why do I owe IRS money this year?

Did you file your tax returns?  If you did not file, then the IRS can assess penalties and interest for not filing on time.  For 2017 with a gross income of $10,926.52, a single person under age 65 should show a $4,050 exemption and a $6,350 standard deduction.  This would make the taxable income $527.  And, assuming no other adjustments or credits, then that should result in an income tax of $56.  With a withholding of $119.98, then you should have filed your tax return and received a refund of about $64.   There are a variety of free services that are available if you need help.  If you need help see: https://www.irs.gov/individuals/free-tax-return-preparation-for-you-by-volunteers