Girl Ninja recently got her first paycheck of the new school year. I’ve been foaming at the mouth, waiting for this day to arise for many reasons: 1) Getting two paychecks is way more fun than getting one…duh. 2) We didn’t really know how much her check would end up being. 3) I didn’t know how much federal tax would be taken out of her paycheck. For today’s blog post, we will only be focusing on point three.
Back in May, I ran a calculation on our estimated 2011 federal tax obligation. The result wasn’t pretty. I estimated we would end up having to write a $1,200 check to the IRS come tax season (this is in addition to what we would have had withheld throughout the year).
Well, now that Girl Ninja received her new paycheck, I was able to make a far better prediction as to what our ACTUAL tax obligation will be this coming year, and to be perfectly honest… it made me want to vomit.
Here’s a screen grab of what we are faced with…
So even though we have already paid more taxes this year, than we did all last year, we still are going to be $4,511 behind. What really makes me angry though is that I don’t know what else Girl Ninja and I could have done to avoided this. Even though we are married and file jointly, we both claim “Single” and “0” exemptions to pay in at a much higher tax rate than the W-4 recommends (it wants us each to claim “married/2″). As far as I’m concerned the W-4 is worthless.
What really boggles my mind is that even though GN claims Single/0 on her W-4, she only had $76 taken out for federal taxes, when her gross pay was $1,228. That’s only 6% of her gross pay going to the fed! Does anyone know why?
We have a few options to reconcile this uber-depressing situation. We could either…
- Make additional federal tax payments of approximately $1,000/month for the remainder of the year.
- Keep withholding at current rates, and in December dedicate 100% of my gross income to bring us current.
- Change absolutely nothing and wait until April 14th to send in that $4,511 check.
Part of me wants to wait until the April 14th so I can earn a little interest on that money and stick it to “The Man” a little. But then another part of me wants to bring that sucker current ASAP ’cause I feel like it is a “debt” looming over my head….and in case you didn’t know; I punch debt in the face when I see it!
Have any of you used the IRS withholding estimator? Are you on track with your federal withholding? Why is Girl Ninja only getting 6% of her paycheck taken out? And lastly, which route would you take to satisfy our tax obligation?