Tax question

[getbent]

Can anyone explain why if our Federal AGI is 40k less this year than last year, I would owe MD taxes? We had a bunch of stuff to submit for taxes last season and received a refund. This year, 3 W-2's, statement for mortgage interest and my thing from CSM (student loan) and now owe. Just doesn't make sense to me. We claim 0 all year to hopefully avoid this.

 

[Booboo3604]

Are you sure that your county/local taxes were taken out? I know that is where my BF got screwed. He started a new smaller company based in VA and since they tax property and not income, the company was not aware that the county had a seperate withholding as well.

 

[getbent]

Are you sure that your county/local taxes were taken out? I know that is where my BF got screwed. He started a new smaller company based in VA and since they tax property and not income, the company was not aware that the county had a seperate withholding as well.

My husband's new employer is based out of VA. He's been there for about 4 months. Could that small amount of time make that big of a difference? How did he find out what they did? Did he call Human Resources? Were they able to fix it or was he out of luck?

 

[Booboo3604]

We knew something was wrong by comparing our W-2's (as my company is based in VA too and we float around the same income bracket). We were able to find out by looking up the local tax for the area and multiply it by the amount of income he made while with that company. It was the same amount that he was short for MD state income taxes. For instance, if your husband made 25K in the last 4 months with that company, and you live in St. Mary's ($25000 x .03= $750). Your numbers will vary based on county and the amount, but its definitely not a few dollars.

http://taxes.marylandtaxes.com/Indi...on/Tax_Rates/Local_and_County_Tax_Rates.shtml

Once we figured it out, he then went to his payroll to correct it starting this year, but yes he had to come out of pocket with it for the amount owed from last year. They make it difficult because the W-2 wraps up everything under the "state tax" and doesn't show the breakout for state and local. We actually had to print all of this out and the calculations for proof as his company had never heard of this, but they eventually got it straight.

Hopefully that helps, message me if you have any questions!

 

[getbent]

We knew something was wrong by comparing our W-2's (as my company is based in VA too and we float around the same income bracket). We were able to find out by looking up the local tax for the area and multiply it by the amount of income he made while with that company. It was the same amount that he was short for MD state income taxes. For instance, if your husband made 25K in the last 4 months with that company, and you live in St. Mary's ($25000 x .03= $750). Your numbers will vary based on county and the amount, but its definitely not a few dollars.

http://taxes.marylandtaxes.com/Indi...on/Tax_Rates/Local_and_County_Tax_Rates.shtml

Once we figured it out, he then went to his payroll to correct it starting this year, but yes he had to come out of pocket with it for the amount owed from last year. They make it difficult because the W-2 wraps up everything under the "state tax" and doesn't show the breakout for state and local.

Hopefully that helps, message me if you have any questions!

Thank you for your help and the link. He showed me a recent pay stub and the MD amount is almost $195 for 2 weeks. To me that seems about right (or at least not low). I'll check the other stubs as well. I definitely want it fixed if something like this is the culprit before it gets too far into the year.

 

[Booboo3604]

Also, use this estimator to figure out what you should be paying based on income. Its meant for those who are self-employed, but it will give you an idea if you are even in the ballpark. I just did mine for giggles and it was within $50.

https://interactive.marylandtaxes.com/webapps/percentage/502for2016.asp

Take the amount on row 10 and divide it by 26 if he is getting paid every other week. That is what should be coming out bi-weekly.

 

[getbent]

Also, use this estimator to figure out what you should be paying based on income. Its meant for those who are self-employed, but it will give you an idea if you are even in the ballpark. I just did mine for giggles and it was within $50.

https://interactive.marylandtaxes.com/webapps/percentage/502for2016.asp

Take the amount on row 10 and divide it by 26 if he is getting paid every other week. That is what should be coming out bi-weekly.

The item on line 10 is within $5 of what came out of his recent paycheck. I just thought of something. If he gets gas money once a month, are they supposed to take tax out of that? The company has less than 6 employees, minority owned out of VA. (Not sure if any of that matters). I'm guessing they have to account for that check with the IRS.

 

[SoMdDude]

The item on line 10 is within $5 of what came out of his recent paycheck. I just thought of something. If he gets gas money once a month, are they supposed to take tax out of that? The company has less than 6 employees, minority owned out of VA. (Not sure if any of that matters). I'm guessing they have to account for that check with the IRS.

My employer (in va) used to give us $400/month for gas, but it was taxed on our paychecks under "misc/mileage/allowance" , if its not taxed before he gets paid, then he will have to pay taxes on that for the year

 

[withrespect]

I owed this year too... for the first time in my life.

 

[NIU_Huskies]

We knew something was wrong by comparing our W-2's (as my company is based in VA too and we float around the same income bracket). We were able to find out by looking up the local tax for the area and multiply it by the amount of income he made while with that company. It was the same amount that he was short for MD state income taxes. For instance, if your husband made 25K in the last 4 months with that company, and you live in St. Mary's ($25000 x .03= $750). Your numbers will vary based on county and the amount, but its definitely not a few dollars.

http://taxes.marylandtaxes.com/Indi...on/Tax_Rates/Local_and_County_Tax_Rates.shtml

I've never heard of a local or county income tax until Maryland. Maryland counties must be rolling in extra money because of this. I assume most Maryland taxpayers fall in the 4.75% tax rate and then you add another 3.03% for Charles County on top of that.

7.78% state/local tax is absurdly high. Are property taxes not enough for local/county governments?