Alternative Minimum Tax
Look at that ad again; it says *as low as * $20. All this means is that some time, for one person, she settled their tax problem for $20. It does not mean she can or will do it for that rate for everyone.
Getting married can screw up your withholding situation.
It can also mess things up if your spouse starts off having no income but then gets a job. Often that leaves you with inadequate withholding.
My husband states the “correct” number of deductions on his W4, and I do not. We come out almost dead even with the feds every year.
Zsofia, you are scaring me, girl! It’s a pretty simple form, and it comes with instructions. Your emploiyer doesn’t have a CFO, accountant, etc? Where on earth do you work? 
As for the percentage of taxes taken out, that is a formula based on your income. If you don’t make much money, you are probably in a 15% tax bracket. No-one “assumes” anything when they withhold your taxes. There is no big scary “they.” You fill out the W4, so you decide.
And just in case you were curious, here’s what our Fearless Leaders paid in taxes for 2004-
I have never in my life seen a W4 with instructions. They’re always fifth generation photocopies or something; it’s just the form, no instructions or anything. Are there supposed to be instructions like on a real tax form? I’m beginning to realize that my workplaces tend to the incompetant. I’ve worked at colleges and universities, mall retail, and several different libraries.
I hate sounding dumb and ill-informed like this. I’m not, about anything else, just this. But you don’t tell them how much to take out; if you just say you’re your only person on your W4 and you don’t tell them to take out any extra in that amount portion, some mysterious amount of money gets withheld for you. Is it just 15% or whatever bracket your gross income falls into?
“When I worked construction, many of my laborers (who were in many ways better compensated than me, their boss… without the job security) would claim 99 dependents.”
No- this is NOT legal. Do **NOT **do this. This is a crime of and into itself, above and beyond owing. Do not file “exempt” (unless you really are) or anything more than 9 or so w-4 with-holding 'exemptions".
Here’s a quote and a link:
"There is a $500 civil penalty for underpayment of withholding if you claim W-4 allowances you knew you weren’t entitled to and those allowances reduced the tax taken out of your pay.
And you could face criminal charges if you enter false W-4 information. This charge also applies if you fail to change your W-4 when necessary to appropriately increase your withholding. If convicted, you could be fined as much as $1,000, be jailed for up to one year, or both"
I suppose a summation of what people are saying is that a.) it can be difficult to get withholding setup correctly, or b.) withholding may depend on your employer’s payroll department’s interpretation, c.) unexpected income can increase your tax liability and d.) income not subject to withholding that has not been addressed with quarterly estimated payments may bring additional tax liabilities.
If your tax situation requires filing anything more complex than a 1040EZ (those are still around?), it’s not too hard to envision scenarios whereby one might owe something at tax time. When I was in EZ territory, I usually got some refund. My current employer, a somewhat sizeable (~2600 employees) NYSE listed corporation, consistently undershoots my tax obligation by about 2-3%, based on my income from them alone. They, of course, can’t take into account my financial life independent of them.
Here you go! The W-4 Form (Caution: it’s a PDF) . And the IRS Withholding Calculator. Your employer is supposed to give you that first form in its entirety, and originals are readily available to them. If they’re handing out poor-quality photocopies, they should be ashamed of themselves. The instructions are classic IRS-speak, but they do make a certain convoluted sense on the third or fourth read.
Mr. Legend is self-employed, and I’m vastly underemployed. We do our own taxes because I’m too cheap and he’s too much of a control freak to turn them over to a professional. I’m convinced, after what I’ve seen of the hiring policies of the H&R Block-style companies, that we know our tax situation better than most of them would, anyway. We have to make quarterly payments. Even though we’ve been doing this for a number of years now, because our income fluctuates throughout the year and because the rules for various deductions change over time, we have never come out even. We always end up having to pay a little extra or getting a little back. Because the first-quarter payment is due on April 15 and the second-quarter payment is due June 15, only two months later (given this, I’m not sure they should call them “quarterly” payments), we aim to err on the side of overpayment, and we apply the refund to the estimated tax payments. Yes, we could have earned a little interest on the money had we kept it, but the penalty we risk is far higher than the income on any of our short-term investments. Even when we overpay, we aren’t exactly throwing money down the drain.
Each of the last few years my taxes have varied from withholding quite a bit, here are some of the reasons:
Sold large chunk of stock at a gain
Sold large chunk of stock at a loss
Wife at time had self-employment income
Moved out of house to apt so no more interest deduction
Stopped paying maintenance (alimony) to ex-wife, this had been a deductible amount
Number of dependents changes each year because of dual custody agreement
I could do a best guess on taxes by taking a quick run through the forms and predicting some of this stuff in advance so I know how much to withhold, but it’s too much work. I use the standard calcs and deal with the difference at tax time.
Wow, those links look familiar. 
(See my post # 10 in this thread).
Damn! I did read the thread, really I did! I’m sorry I skimmed over that one (and so early in, too).
Next time, I’ll try reading the threads before drinking the wine (or can I blame it on my still being in shock from writing the checks for the quarterly taxes?).
hey if you only needed one glass of wine after writing your quarterly check, you’re a better man… uh… a better internet legend than I am!
We’re fighting ignorance here (in between bad puns and much lunacy) so the more fighters the better. Much better to have two links than none. 
If your income, expenses and deductions are fairly constant from year to year then it’s very easy to adjust your paycheck so that you wind up flush at tax time.
I finally got around to filling out the form (see everyone’s links) a few months ago for this year and was pleasantly surprised - I thought it was some arcane process but it’s not, took ten minutes including the time to pull out my 1040.
If you claim more than a certain number of deductions then your employer is required to send all the forms to the IRS but so long as you are filling everything out honestly and correctly then you shouldn’t have much to worry about. The additional amount I’m seeing on each paycheck jibes with my refund from last year so it looks like it’s working out accurately.
My goal is to be within $100 come tax time. Unfortunately, the last few years, we’ve been in a major state of flux. However, we’re now settled in the same state and in a house. This year, we had to come up with almost $500, but I’m hoping it’ll be closer next year.
Then in 3 years, our daughter will no longer be a dependent, and we’ll have to adjust again. As it is, we both claim 0 and I have an extra $50 withheld biweekly. The W4 worksheet has never worked for us.
I got nailed a couple of years ago because I spent the first half of the year working with a very low income, and then got a much better-paying job for the second half. In the first job, my withholding was calculated assuming that I’d be in a much lower tax bracket than I ended up in.