<p>Maybe the sister got caught caught in the AMT trap. Whenever we end up having to pay substantial $$ to the IRS beyond that which is withheld, it is because of that reason.</p>
<p>Thank you for all the information. My sister and her husband have their taxes done by a professional. Their income went up quite a bit for the year. I think this is basically a one-time thing; her husband got a teaching job a few years ago, and although his salary hasn’t gone up, I think that last year would have been the first year that would have reflected him working for a full year at the job. Maybe they were bumped into a higher bracket, as one person above suggested.</p>
<p>The IRA contribution is the only after year end item that can reduce taxes, isn’t it? I can’t think of anything else.</p>
<p>megdog, they might also want to check their state withholding and especially their FICA. If those were also incorrect for 2010, they definitely want to make whatever adjustments are needed going forward.</p>