TurboTax / Tax Calculators & Tips / All Tax Guides / General Tax Tips / Video: Why Do I Owe on My Tax Return

Video: Why Do I Owe on My Tax Return

Updated for Tax Year 2015


OVERVIEW

If you finish your tax return and are confused as to why you need to send the IRS a check, there is only one possible explanation for this: you paid less tax during the year than you owed for your income level. Watch this video to find out more about why you may owe money of your tax return.


Hello, I’m Tammy from TurboTax with some important information for taxpayers who still owe tax when filing their return.

If you finish your tax return and are confused as to why you need to send the IRS a check, there is only one possible explanation for this: you paid less tax during the year than you owed for your income level. The reasons for this situation, however, can vary—but you can easily prevent this from happening next year if you get to the root of the problem.

If you are employed by a company, the IRS requires your employer to withhold a portion of your salary to pay your federal taxes. The amount withheld depends on a number of factors—but you do have some control over how much is taken out of your paycheck. The W-4 form you filled out when you started your job allows you to modify how much tax is withheld from your paychecks. The good news is, you can fill out a new W-4 form any time you’d like, and if necessary, you can increase your withholding to avoid a nasty tax bill at the end of the year.

If you are unfamiliar with the W-4 form, you should understand how allowances work before making adjustments to it. Essentially, each allowance you report represents a reduction to your taxable income--such as for the dependent exemptions you anticipate claiming on your tax return. The more allowances you report on your W-4, the less tax that is withheld from your paycheck. If you report more allowances on your W-4 than dependents on your tax return, you could end up writing a check to the IRS come tax time. This is just one example.

You can test different scenarios using the W-4 Calculator on our Tax Calculators and Tips page at TurboTax.com.

This can help you get the outcome you want next year– whether it’s a big tax refund or more money in your paychecks week to week. Self-employed taxpayers, though not subject to withholding, can face similar issues when they fail to make estimated tax payments. As a self-employed taxpayer, you have an obligation to make up to four of these estimated tax payments to the IRS throughout the year. If you don’t report any income until you file your tax return—you’ll have no choice but to make one larger tax payment. 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.

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $54.99$34.99*
Start for Free

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.


Security is built into everything we do
Here's how
* Important Offer Details and Disclosures
  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Free 1040EZ/A + Free State offer only available with TurboTax Federal Free Edition; Offer may change or end at any time without notice. Actual prices are determined at the time of print or efile and are subject to change without notice. Savings and price comparisons based on anticipated price increase expected 3/18/16. Special discount offers may not be valid for mobile in-app purchases.
  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal efile of up to 5 federal tax returns. Additional fees apply for efiling state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected 3/18/16. Prices subject to change without notice.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with efile and direct deposit; tax refund timeframes will vary.
  • Pay for TurboTax out of your federal refund: A $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice service is available via phone for your toughest tax questions; fees may apply. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2014 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.
  • Benefit Assist: After you file, TurboTax automatically shows you a full list of government benefits you may qualify for, like Food Stamps or reduced phone & utilities. Plus, we help you apply, saving you time and making it easier than ever to get more money! Estimate based on calculation of Benefit Assist users from tax year 2013 and published reports of average benefit and savings amounts from federal and state programs. Benefit Assist users who received one or more federal or state benefits received on average $576 (based on survey March-June 2015). Actual amounts and qualifications based on your individual situation; some individuals will not qualify. Feature may not be available for all customers.