I don't mind paying taxes, I just want them to be predictable.
January 28, 2014 12:12 PM Subscribe
This question is about taxes, withholding, and multiple W2s. Can you help?
posted by anastasiav to Work & Money (14 answers total) 3 users marked this as a favorite
Every year, the situation is always the same. We get a moderate refund on our Federal taxes, but we end up owing the state quite a bit. Every year or two I readjust our withholding (in sometimes what seem to be very strange ways) and think I've fixed it, but then the problem rears its head again.
For 2013, the situation is as follows: I changed jobs in February 2013. Using Turbo Tax, when I put in my husband's (very stable) salary and the W2 for my current job, we had a Federal refund of about $1400 and owed the State a manageable $87 (most of which was the 'use tax' which isn't part of withholding). These numbers were in-line with what I expected, and with our tax bills/refunds in 2012. Other than getting my W2 from the job I left in February 2013, our taxes were complete.
Last night I added the last W2, which was about $6500 worth of income. Our federal refund dropped a couple of hundred dollars. Our state tax bill increased from $87 to $452.
I understand that the core problem is "not enough withholding". What I'm working through (and frustrated with) is this: If my state withholding was exactly the same for job A and job B, and the withholding at Job B was enough to (pretty much) cover the full taxes on Job B, and last year the withholding at Job A was enough to (pretty much) cover the full taxes on Job A, why did adding in the 2013 income and withholding from Job A increase our tax bill so much?
Is this somehow related to it being on two W2s? Is it related to my moving into a new tax rate bracket for Job B? Do I need to radically adjust my withholding for my state taxes (yet again), or will this resolve itself next year when I once again only have a single W2? Or, because the tax laws change every year, am I just chasing my tail and should resign myself to my withholding for the state always being either radically over or radically under, never hitting "just right"?
The state is Maine. I understand that a local tax accountant could answer these questions, but a couple of hours with an accountant right now is a) tough to get, b) expensive, and c) 3-4 years ago I had 'help' from an accountant with our withholding, and it didn't really help.