Taaax tiiiime ...

[Pixelated]

I owe $1,300 ...

This is THE worst in a long time.

I really have to talk to a few people to see how to bring this down in the future. She pointed out that I've worked at a number of jobs over the past year (including, at one point, my regular part-time job plus a Christmas part-time job) and when you do that, you apparently put yourself into a different tax bracket.

This makes zero sense to me since they are all minimum-wage jobs ...

[TheSHAD0W]

I mean, you could change your withholding to give more money to the feds with each paycheck.

IMO you're much better off just dumping a bit more into the emergency fund with each paycheck. Why give the government a free loan?

[csquared]

Dual incomes, whether it is one person with two jobs or a two income family. Each job is in one bracket, while combined, they push you into the next bracket.

I have a similar issue. I am in the 22% bracket. The Wife is in the 10% bracket. Combined, she is 12% short.

[Mental_Mouse]

I've heard a lot of folks got hammered this year, basically because the old withholding wasn't enough.

[csquared]

Remember. she is Canadian.

Here in the US, there has been a lot of confusion. The new tax codes came in late. I heard that a large number of companies used wrong numbers for withholdings. I was pleasantly surprised by the refund I got. Usually, I have to pay.

[Pixelated]

I mean, you could change your withholding to give more money to the feds with each paycheck.

IMO you're much better off just dumping a bit more into the emergency fund with each paycheck. Why give the government a free loan?

That's the most commonly-recommended solution (withholding more tax) although my brother has the same view of it as you do.

Dual incomes, whether it is one person with two jobs or a two income family. Each job is in one bracket, while combined, they push you into the next bracket.

I have a similar issue. I am in the 22% bracket. The Wife is in the 10% bracket. Combined, she is 12% short.

Yeah, that was one of the things she told me ... even though at the time I had the two jobs (one being a seasonal one) both were minimum-wage jobs.

Somebody else pointed out that my mother's estate had started being disbursed last year as well. One of the things I got was my share of the sale of the house. It wasn't in my bank account for long ... it's since been invested ... but apparently it was there long enough for the CRA to see it.

I've heard a lot of folks got hammered this year, basically because the old withholding wasn't enough.

Remember. she is Canadian.

Here in the US, there has been a lot of confusion. The new tax codes came in late. I heard that a large number of companies used wrong numbers for withholdings. I was pleasantly surprised by the refund I got. Usually, I have to pay.

csquared is correct. Although I've read some horror stories about people who expected refunds, or expected to pay comparatively small accounts, really getting hammered, as Mental_Mouse said.

Glad to hear you got a pleasant surprise, csquared!

[Nunavut Pants]

Why give the government a free loan?

Down here, Uncle Sam gets pretty unhappy if you wind up owing a lot. He will then ask for some reason that you overly withheld, or slaps you with interest and penalties. Evidently the IRS wants you to be somewhere close.

Da Boss and I both dropped our withholdings when we heard about the most recent tax plan. It worked out for us.

[TheSHAD0W]

Down here, Uncle Sam gets pretty unhappy if you wind up owing a lot. He will then ask for some reason that you overly withheld, or slaps you with interest and penalties.

I'm assuming you're doing your withholding "properly". As in, you set up withholding with your job at a reasonable level, and the tax schedule change or an unexpected event caught you unawares. They're typically okay with that, and might charge interest but will tend to waive penalties.

Note that, if you have both employment income and investment income, I'd strongly recommend you set up your job withholding to *only* account for the job, and pay estimated taxes quarterly for the investment income. It's a bit more trouble but will give you more flexibility towards unexpected income.

[taxguykarl]

Evidently the IRS wants you to be somewhere close.

Within $1000, in fact. However this year more penalty waivers have been granted due to withholding confusion from the new tax code.

csquared is right as multiple jobs can cause the dreaded bracket creep (aggregate total of all payrolls) as the IRS withholding tables assume that this particular payroll is your only one. Financial privacy laws make employer coordination problematic, if not illegal. Not to mention the new code passing so late (fall of 2017, AAMOF) that the IRS themselves did not have resources to properly analyze the final draft (i.e. the version the President actually signed). My mega chain's corporate had an outline of changes available in late March 2018. The final form changes were not posted 'til October 2018. Remember, IRS does not write the tax code, Congress does. The IRS just makes educated guesses as to what the code means in a practical sense.
Claim zero exemptions on your withholding form...and your state counterpart, come to think of it. Do the same for annunities, unemployment and social security.

Mental_mouse is right about a lot getting hit. The suspension of work expenses (except for the self-employed) and limit on state and local taxes ($10,000) hit quite of few of my regulars (Mrs. TGK & I included). OTOH, the higher credits for dependents helped out a lot of others.....with many it was damage control.

Contrary to popular belief: if you suspect that you will owe, it is best to file early as there is more time to scrape together the balance due or get an installment plan approved (within six years generally, but there is interest to consider and no problem with paying more each month). Future refunds will be intercepted as payments (I have a niece who "paid" just that way).

[Pixelated]

It sounds as though multiple jobs = bracket creep applies in Canada as well ...

I plan to have it paid off within a few months; no way am I waiting for next year to deal with it! I want my finances to be in better order next year, and hopefully to either have a refund or at least a FAR lower "owesies" than I had this year.

[taxguykarl]

It sounds as though multiple jobs = bracket creep applies in Canada as well ...

That applies wherever there is a graduated income tax.