Any Tax professionals here?

CHenry · Mar 5, 2015

Actually this is probably a pretty simple question for some of you. My 17 yo son worked last year, full time in the summer and part time during school. He worked at The Braums farm and a Vet clinic. His total income from Braums was like $5500 and the Vet was $2300 some. The Vet held out 0 federal taxes - I'm guessing cause his 2 week checks were so small. Braums held out $522 in federal tax for the year. I was under the impression that if you make under $10,000 for the year, you pay no federal tax at all. Is this correct?
So hes using turbo tax today and he has entered his Braums W-4 and TT is showing a full refund due of $522. Now he enters his Vet W-4 information and TT showes the return due is now $260 something? Why is that? Shouldnt he get back 100% of his federal witholdings?

FullAuto · Mar 5, 2015

Just don't enter the Vet info and get the $522 back.

CHenry · Mar 5, 2015

FullAuto said:
Just don't enter the Vet info and get the $522 back.

Um, right.

tranger2 · Mar 5, 2015

For 2014, a single individual gets a standard deduction of $6200 and a personal exemption of $3950. Therefore, he wouldn't owe any taxes unless he made more than $10,150. Usually, a person in this position would still file a return to get back any federal taxes that had been withheld.

HOWEVER, If you claimed your son as a dependent on your return, you get the exemption on your return, he cannot claim the $3950 exemption, he is taxed on the amount over $6200....

He pays taxes on any money over $6200 (Standard Deduction amount). When he input his first W-2, he was under that amount and turbo tax showed he didn't owe anything, therefore a full refund. When he input the second W-2, he now exceeded the amount and owes 10% at that lower level.

rhodesbe · Mar 5, 2015

FullAuto said:
Just don't enter the Vet info and get the $522 back.

Nice try, Obama.

CHenry · Mar 6, 2015

tranger2 said:
For 2014, a single individual gets a standard deduction of $6200 and a personal exemption of $3950. Therefore, he wouldn't owe any taxes unless he made more than $10,150. Usually, a person in this position would still file a return to get back any federal taxes that had been withheld.

HOWEVER, If you claimed your son as a dependent on your return, you get the exemption on your return, he cannot claim the $3950 exemption, he is taxed on the amount over $6200....

He pays taxes on any money over $6200 (Standard Deduction amount). When he input his first W-2, he was under that amount and turbo tax showed he didn't owe anything, therefore a full refund. When he input the second W-2, he now exceeded the amount and owes 10% at that lower level.

That clears it up, yes, I told him to check the yes box that asks "can anyone claim you as a dependent". So now I understand. thanks.

Oklahomabassin · Mar 6, 2015

tranger2 said:
For 2014, a single individual gets a standard deduction of $6200 and a personal exemption of $3950. Therefore, he wouldn't owe any taxes unless he made more than $10,150. Usually, a person in this position would still file a return to get back any federal taxes that had been withheld.

HOWEVER, If you claimed your son as a dependent on your return, you get the exemption on your return, he cannot claim the $3950 exemption, he is taxed on the amount over $6200....

He pays taxes on any money over $6200 (Standard Deduction amount). When he input his first W-2, he was under that amount and turbo tax showed he didn't owe anything, therefore a full refund. When he input the second W-2, he now exceeded the amount and owes 10% at that lower level.

Great info.

dubs chops · Mar 6, 2015

Since your question has been answered, May I hijack this thread?

My wife and I pulled out her 401K which wasn't a lot, to put down on a house we are building.

the financial institution it was with held out the supposed "taxes" on the total and deposited what was left to us.

to start with it was $31k and some change they took out 20% for federal =$6,209.00. and then about $1552 for state. leaving $23,387.00.

I know there is the 10% penalty also. that I will need to pay on next years taxes. is that state and federal? and is it on the original gross amount? What I'm trying to figure out is how much of the remaining $23,387.00 do I need to hold out for the penalty.

thanks for any help peeps.

CHenry · Mar 6, 2015

dubs chops said:
Since your question has been answered, May I hijack this thread?

My wife and I pulled out her 401K which wasn't a lot, to put down on a house we are building.

the financial institution it was with held out the supposed "taxes" on the total and deposited what was left to us.

to start with it was $31k and some change they took out 20% for federal =$6,209.00. and then about $1552 for state. leaving $23,387.00.

I know there is the 10% penalty also. that I will need to pay on next years taxes. is that state and federal? and is it on the original gross amount? What I'm trying to figure out is how much of the remaining $23,387.00 do I need to hold out for the penalty.

thanks for any help peeps.

Yes hijack away, I want to hear the answer to this as well. I had though the penalty was going to the financial institution. If so, they should have already taken it?

CHenry · Mar 6, 2015

It seems its the IRS collecting the penalty
http://www.moneycrashers.com/401k-ira-withdrawal-down-payment-house/

Any Tax professionals here?

CHenry

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FullAuto

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CHenry

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tranger2

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rhodesbe

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CHenry

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Oklahomabassin

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dubs chops

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CHenry

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