Why owe so much in taxes

But you should also realize that the IRS may charge you interest and penalties for failing to make sufficient quarterly estimated payments. Whether you are expecting to pay, or get a big tax refund, TurboTax will guide you step by step to help you get all the tax breaks you have coming.

Remember, with TurboTax , we'll ask you simple questions about your life and help you fill out all the right tax forms. Whether you have a simple or complex tax situation, we've got you covered. Feel confident doing your own taxes. Just answer simple questions about your life, and TurboTax Free Edition will take care of the rest. For Simple Tax Returns Only. Make Withholding Changes Work for You.

What is a Tax Levy and Tax Lien? A Guide to Social Security Tax. What is Form V? Estimate your tax refund and where you stand Get started. See if you qualify for a third stimulus check and how much you can expect Get started. Easily calculate your tax rate to make smart financial decisions Get started. If you received a refund last year, you generally could expect one this year—if your personal tax situation was the same. But, for so many people this last year, their situation was not the same.

Receiving unemployment income, taking on an extra job or self-employment are all plausible causes for your refund amount changing from year to year. Read on to learn about other factors that may affect why you may owe taxes.

While some taxpayers prefer to have more in their paycheck vs. Looking for more information about your Maryland refund? Looking for more information about your Connecticut refund? Can you deduct past tax debt or associated penalties? Can you claim a deduction for paying down your student loan? Each of the 43 states taxing income has different tax laws. Additionally, states can charge sales and use tax; there is no federal sales tax. Each state has its own department of revenue and may have very different tax refund statuses.

Before filing in any state, check its specific tax laws or consult a tax professional specializing in that state. California, for example, sometimes differs from the IRS on due dates for estimated quarterly taxes. If you performed work in a state and tax was withheld from your income, you may owe or be due a refund from that state. If taxes were not withheld and you received a Form listing your earnings, you are not required to file in that state. However, your income is subject to taxation by your state of operation or residence.

If you lived in more than one state during the tax year, you must file a state income tax return for each state to determine your refund status. It does not matter how long you resided in that state. If you worked in or earned income from more than one state, you may need to file a return even if you did not live in that state. For example, if you are a resident of California who contracted out to a company in New York and met one of these conditions, you need to determine refund status for both New York and California:.

You may not have had enough withholding or deductions. This leaves more income to be taxed resulting in a lower refund or the need to pay additional taxes with your return. If you had unemployment, that is also taxable.

Since the EITC is a direct deduction from your tax liability, the elimination of the deduction will increase what you owe. Did you take an additional job or did your spouse start working? Finally, whether we like it or not, income taxes do go up every year. If you did not change your withholdings in response, you might not have enough withholding by the end of the year.

You may owe taxes or receive a lower than expected refund. Keep accurate records of anything that may change your taxable income or tax status. If you run a business in California, you are required to pay sales and use tax, which you can levy at the point of purchase and pass along to the California Department of Tax and Fee Administration. Sales and use tax is required on all cash and credit card sales, installment sales, lay-away sales, and trade-ins or property exchanges.

Depending on what you sell, you may owe excise tax. On the other hand, if you are self-employed, you must pay self-employment tax; you are paying both your contribution and an employer contribution into Social Security and Medicare. To avoid paying interest, penalties, and legal issues, pay your tax bill in full and on time.