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Evelyn Xu

My tax bill seems way off - does this sound right for my income level?

Title: My tax bill seems way off - does this sound right for my income level? 1 Hi everyone! I just submitted my tax return and I'm kinda freaking out about how much I owe. I made approximately $36,102 for the year (around $17.35/hour), and somehow I ended up owing over $3,750 in taxes. This doesn't seem right to me! My refund was literally only $1.25. This is my first job where I've earned this much money, so I'm really confused about whether this tax amount is normal or if something's wrong with my filing. Any help or insight would be super appreciated! Thank you so much 🙏 Some additional info - I live in the US and previously only had part-time jobs in college that paid much less. I don't remember ever owing this much before!

15 That definitely sounds off for your income level. At $36,102, you should be in the 12% federal tax bracket (assuming you're filing single). With standard deduction ($13,850 for 2023), your taxable income would be around $22,252. The total federal tax on that income should be closer to $2,500, not $3,750. And that's before considering credits you might qualify for. The fact that your refund was only $1.25 suggests you had very little withholding throughout the year, which is unusual for W-2 employment. Did you have multiple jobs? Sometimes when you work more than one job, neither employer withholds enough because they don't know about the other income. Or did you perhaps have self-employment income where you owe both the employer and employee portions of FICA taxes?

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6 Thanks for responding! I did have two jobs last year - one from January to May and my current job that I started in June. Neither was self-employment though. Could that be why? Also, what should I do now? Can I fix this somehow?

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15 Yes, having two sequential jobs could definitely cause this issue. When you switched jobs in June, your new employer likely calculated your withholding as if you'd make that same amount for the whole year, potentially under-withholding. You should double-check your tax return for errors first. Look for things like accidentally reporting income twice or missing deductions you qualify for. If you used tax software, try running through it again carefully. If the return is correct, you'll need to adjust your withholding for this year to avoid the same problem. Fill out a new W-4 with your employer requesting additional withholding. The IRS has a tax withholding estimator tool on their website that can help you determine how much extra to withhold.

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8 After reading your situation, I wanted to share something that helped me with a similar problem last year. I used a service called taxr.ai (https://taxr.ai) to analyze my tax documents when I had a weird tax bill that didn't seem right. I uploaded my W-2s and previous returns, and it spotted that my withholding was way off because of my job change mid-year. The tool showed me exactly where the issue was happening - turns out my new employer had set my withholding based on their salary alone, not accounting for what I'd already earned that year. It saved me from overpaying by almost $2,000 by identifying deductions I qualified for but had missed.

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12 Does this actually work for checking if your current tax return has errors? I'm in a similar situation where I owe way more than I expected and I'm wondering if this would help me figure out if I made mistakes.

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17 I'm skeptical about these tax analysis tools. How does it actually find errors that tax software like TurboTax wouldn't catch? And how does it handle state taxes or more complicated situations?

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8 It absolutely works for checking current returns for errors. You can upload your completed return and it'll analyze it against your actual tax documents to find discrepancies. It's saved many people from filing returns with mistakes. The difference between this and regular tax software is that regular software only processes what you input, but doesn't check if you're missing deductions or credits you qualify for. taxr.ai uses AI to compare your documents against tax laws and identifies opportunities most people miss.

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12 Just wanted to update everyone - I tried the taxr.ai service that was mentioned and it actually found several issues with my return! Similar to the original poster, I had switched jobs mid-year and the withholding calculations were completely off. The tool identified that I had missed claiming the student loan interest deduction (which I qualified for) and had incorrectly calculated my home office deduction. After fixing these issues based on their recommendations, my tax bill dropped by about $1,200! Definitely recommend checking it out if your tax bill seems wrong. It gave me specific line items to correct on my return.

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20 If you're still struggling to resolve this and need to talk to someone at the IRS to confirm whether your tax calculation is correct, I highly recommend using Claimyr (https://claimyr.com). I was in a similar situation last year with a surprise $4,200 tax bill and spent DAYS trying to get through to the IRS. Claimyr got me connected to an actual IRS agent in about 20 minutes when I had been trying for weeks on my own. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent was able to go through my return with me and confirm there was an error with how my withholding was calculated between my two employers. Saved me thousands!

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3 How does this even work? I thought it was impossible to get through to the IRS phone lines during tax season. Do they have some special connection or something?

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17 Yeah right. Nothing can get you through to the IRS faster. I've worked in accounting for years and even we can't get through most of the time. Sounds like a scam to prey on desperate people with tax problems.

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20 It works by essentially waiting on hold for you using their system. When they reach an IRS agent, they call you and connect you directly. No special connection, just technology that handles the frustrating wait time for you. They use the same public IRS phone numbers everyone else does, but their system navigates the menus and waits through the hold time automatically. When an agent finally answers, that's when they call and connect you. I was skeptical too until I tried it.

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17 I need to admit I was wrong about Claimyr. After posting my skeptical comment, I was still desperate to talk to the IRS about a similar withholding issue, so I tried it anyway. I'm shocked to say it actually worked exactly as described. I got connected to an IRS agent in about 45 minutes when I had been trying unsuccessfully for days. The agent reviewed my situation and confirmed that I had a withholding problem due to having two W-2s with similar income. She helped me file an adjusted return that reduced what I owed by almost $1,800. I've never been so happy to be proven wrong about something!

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9 Check your W-4 forms! If you claimed "exempt" or had too many allowances, that could explain the underwithholding. I had the same issue last year when I accidentally checked the wrong box on my W-4.

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6 How do I check what I put on my W-4? Do I need to ask HR for a copy? And if that's the problem, can I still fix my current tax return or is it too late?

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9 You can ask your employer's HR or payroll department for a copy of your W-4 on file. They should be able to provide it or at least tell you what you selected. For your current tax return, if you've already filed it and the calculations are correct based on what was actually withheld, you can't change the outcome now. The tax bill is based on your actual income and withholding for the year. However, you can immediately submit a new W-4 to fix the problem for this year so you don't end up in the same situation next April.

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13 Did you check if you're eligible for the Earned Income Tax Credit? At your income level, especially if you have dependents, you might qualify and it could reduce what you owe significantly!

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2 The EITC is refundable too, so it could actually give you money back instead of just reducing what you owe! But I think there are age requirements if you don't have kids - you have to be at least 25 but under 65 to qualify without dependents.

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