Death and Taxes

[desertbird]

Well,
I took one on the chin this year from California. :boxingguy The Fed's had a glancing body blow :boxingguy :yuk: :mad:
Californina doesn't recognize many of the deductions the feds offer. A friend of mine told me that it is possible to file a W-4 (withholdings/exemptions form) with the feds (ie: "married", 2 exemptions or "single", 0 exemptions) and then file different payroll sheet for state only.
Any CPA's on the board? Any assistant CPA? Ok, any janitors for HR Block who might know what the heck he's talking about? I've only ever used a W-4 and the Franchise Tax Board website is less than easy to navigate.
Help! I only avoided a penalty because of an exeption clause that let me off the hook since last year I was right on. (8 dollar refund!)
:confused: :confused: :confused: :confused: :confused: :confused:

[Mrs. Bordsmnj]

What exactly are you asking here? Are you trying to claim different exemptions for State and Fed? If so, your H/R department should be able to make the change for you. The form for the State is called a DE-4.

[desertbird]

Thanks! I think that's exactly what I was asking for.

[Mrs. Bordsmnj]

No problem! :boxed:

[desertbird]

Mrs. B!
Are you hip with the tax codes? None of this makes sense to me. I'm married, two income. I claimed married, and 2 she claimed married and 0. It worked last year, we got hammered this year. Salaries increased by about 15% but we didn't breakout of the bracket. Something changed in California, and I was just oblivious to it. :yuk:
Any way, if I were to do the W-4 worksheet in it's entirety, I come up with 6 allowances (being very conservative). :rolleyes: :rolleyes:
I just did the DE4 worksheet and come up with 11 allowances. How the hell does this work!?!?! :mad: :mad:
I'm on my way to payroll with a new W-4 claiming married and 1, and a DE4 claiming a big FAT ZERO. :yuk:
What a joke.........

[Mrs. Bordsmnj]

I don't know the tax codes. I do HR and Payroll. Sorry. :rollside:
And yes, taxes are a biatch! I am not looking forward to finding out what we owe this year. :yuk:

[desertbird]

Don't be sorry! You got me one step closer than my own HR department! :rollside:
She didn't know about the seperate California form. Maybe I'll stop by the accounting dept. and ask one of the bean counters just how this works. :rolleyes:
See you on the River! :D

[BrendellaJet]

The withholding forms are pretty useless. You need to manage your tax liability monthly if you dont want to get screwed at year end. I dont beleive those forms include provisions for your mortgage interest deduction, charitable donations, child tax credits or other items that can reduce your tax liability. Also, if you are getting a sizeable k1 or 1099 from anywhere those need to be taken into consideration as well. Were there any penalties & interest on your return? Remember, as your income goes up, you become more accessible to the alternative minimum tax as well. Talk to your CPA about your concerns and they should be able to set you up with the correct amount of tax to be withheld each year and you can tell your payroll dept to withhold a fixed amount or a percentage to both the fed & State because the forms are pretty useless...Or, if you take a look at your total tax, divide by the # of pay periods you have each year and that will get you close, keep in mind that your mortgage interest write off will decrease each year so you will need to pay more tax... :rollside:
As long as you meet the safe harbor though, Id say you did a fine job. Its foolish to let the government use your money all year long. If you can avoid the penalties by meeting the safe harbor thats a GOOD THING! Just remember that you will have to pay eventually.

[desertbird]

keep in mind that your mortgage interest write off will decrease each year so you will need to pay more tax... :rollside: .
Oh, great! Give the wife another reason we should buy a bigger house!!!! :p
My income is not so extravegant that I use a CPA yet. 2 wages, some interest and minimal gains/losses on investments. Most all of our investing is retirement related and I've been doing ok for seven years now. I got surprised for '05. Like I said, I am certain something changed in Cali that I missed.
We got lucky, no penalty, but only becasue of an exception clause which gave me a free pass since last year's return was "spot-on" :crossx: Lemme see what the seperate filings do for me, and then we'll talk about additional witholdings :yuk:
I've also got another 4% to go until I hit the full 15% in my 401K, but I do not know if that's enough to offset the tax liabilities or not. I also don't know which will make my paycheck smaller, but certain commitments need to keep it very close to where it is right now!

[Hardly Satisfied]

Look up Focker , he might be able to help you