How can I owe the IRS money this year, when I've always received a refund?

I have completed my taxes using an online software program. After entering all of my information, the system is showing that I owe the IRS nearly $1800. How did this happen? Every year, I've always received a refund. It has nothing to do with any previous returns or errors, as those were always prepared correctly and truthfully, However, my income increased last year about $8000, due to a part-time job. I can understand a smaller refund, or none at all, but to pay! I am burdened in debt with maxed out credit cards and don't know what to do. Did the tax codes change or something? Could this be an error? I cannot afford to pay a tax professional as I have no discretionary income. Please help!!!

Davie, FL -

Attorney Answers (5)

Heather Morcroft

Heather Morcroft

Family Law Attorney - Winter Park, FL
Answered

Maybe you did not have enough money withheld from your part time job, or maybe you entered information incorrectly in the program. You need to take your documents to a tax professional in order to get the answer. No one can give you the answer without reviewing your tax documents.

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Steven M Zelinger

Steven M Zelinger

Tax Lawyer - Philadelphia, PA
Answered

No one can answer your questions without reviewing the return. I would guess that you just did not withhold enough or perhaps due to the job you moved up a tax bracket, etc. I know you say you can't afford to pay a preparer, but it may be worth the investment. Otherwise, you can file your return if you are okay with it and request a payment plan (you can wait for your balance or send it along with the return). Tax payment agreements for such small balances (relatively speaking) are easy to get and pretty flexible. I would suggest reviewing your W4 for 2013 to make sure you are withholding enough taking into account all sources of income (something else a CPA could help you with).

This is not legal advice nor intended to create an attorney-client relationship. The information provided here is... more
Matthew Elon Abernethy

Matthew Elon Abernethy

Tax Lawyer - Smyrna, GA
Answered

The other attorneys are correct that no one can answer your question without reviewing your tax returns. However, I would like to add that the additional $8,000 of income could be playing a large part in the discrepancy, particularly if you were paid as an independent contractor at the part-time job. If you were paid as an independent contractor, you would be subject to significant self-employment tax on Schedule C.

Mansoor Hussain Ansari

Mansoor Hussain Ansari

Tax Fraud / Tax Evasion Attorney - Orlando, FL
Answered

Simply put, more money equates to more taxes. When you earn money via 1099, you have an added issue of self-employment tax. That is a tax paid on income that is earned through being a private contractor or another type of non W-2 income stream. Therefore, factor in extra tax for the extra $8000; then, factor in a little more tax for self-employment tax.

Christopher Michael Larson

Christopher Michael Larson

Tax Lawyer - Seattle, WA
Answered

Part of the problem with part time jobs that pay little, is that they may not know about your other income when taking withholding. If it looks like you make 8k per year, the withholding is much lower than if you have an additional 40k on top of that. The problem could be under-withholding at the part time job. it can also be caused by sources of income for which there was no withholding.

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