Explain like I'm 5--Taxes

[bubbles]

So I got my first paystub of the year. I'm not surprised at all about the Social Security/Medicare. I was well aware of that. However, no federal taxes were withheld. I emailed HR and asked and here's his response:

Based on the tax tables for 2013 and your withholding choices, there are no taxes withheld.

For a person claiming married on a biweekly pay schedule, $150 is deducted from taxable income before starting to calculate taxes. You are currently claiming 3 exemptions ($450 deducted from taxable income). Then a percentage is applied to the amount over $319.

He then sent me this link www.irs.gov/pub/irs-pdf/n1036.pdf

I have no idea what this gobbedlygook means. I do not have a firm understanding of taxes AT ALL. He's not in his office now or I would ask him. So please someone explain this to me on an elementary level. Tell me what I need to do to have taxes withheld next pay period.

[Deleted]

go to the IRS calculator and see how much you should be withholding.

Depending on how much you make you might not owe any federal taxes beyond FICA. (47% of Americans don't)

[bubbles]

It says the calculator is down for maintenance. I've always paid federal taxes, so this came as a surprise to me.

[makingithappen]

If it is correct in them not withholding, I'd lower your exemptions if you're sure you will owe taxes at the end of the year.

[Deleted]

get a new W4 and put the amount you want additinally withheld.

[phunluvin82]

Is 3 exemptions accurate and in line with what you've claimed in past years? Have you ended up owing in those past years?

[bubbles]

I've never owed taxes and have claimed 3 exemptions the two years I've been here. H does not claim any exemptions. Last year was the first time we filed jointly and we got back $1600 or so.
I talked to HR and think I have it pretty well figured out. I'm afraid of owing, so I think I always over-withhold, which I know isn't the best thing to do.

[ijack]

Use the tax tables on the govn't website - IMO they're better than the calculator. What do you and H expect to make this year? What do you usually deduct (itemized or no?). Subtract the 2 and then look up that number in the tables - that's the amount you owe in taxes each year.

[Deleted]

Jan 10, 2013 14:33:13 GMT -5 bubbles said:

I talked to HR and think I have it pretty well figured out. I'm afraid of owing, so I think I always over-withhold, which I know isn't the best thing to do.

If you are afraid of owing, then you need to reduce your exemptions. More exemptions= LESS money taken out.