|
another follow up. It is the W-4 where you claim the # of exemptions which ultimately determines the amount of federal withholding.
I always itemize (it sounds like you do also). As such you get a deduction for the amount of taxes (state, local, school, etc) that you pay. If you overpay state taxes, and get a refund, it is taxable.
ie you deducted the amount of state taxes you paid in the previous year (say 2005), but when you filed (sometime before jan and Apr 15) your State return, you got a refund. So the taxes on that overpayment were not paid in 2005 because you deducted it from 2005 federal return.
Hope I'm making myself clear here.
Still, you are leaving some additional income on the table.
Just looked at the tax tables briefly. For $50 k of income (no deductions at all taken out) the total of the tax liability is $6749 (MFJ). If you are overpaying by $6 k....WOW.
|