megarooski3 t1_jeeh2z5 wrote on March 31, 2023 at 12:55 PM

Reply to comment by staile in Taxes - No deductions but still owing?? by [deleted]

My total base salary is $152k, and my total commission (what I make if I hit 100% if my plan) is an additional $101k. I am paid bi-monthly, 1st pay check is salary only, 2nd paycheck is salary+commission for the pay period.

I am claiming nothing on my W4s, so withholding nothing.

themudcrabking t1_jeei025 wrote on March 31, 2023 at 1:03 PM

If you’re having nothing withheld that’s why. A simple version would be as follows:

Tax owed at filing=(total tax owed)-(tax withheld during the year)

megarooski3 t1_jeei8ht wrote on March 31, 2023 at 1:05 PM

Thank you! I guess I'm confusing myself...I thought because I'm not claiming any dependents/allowances etc., I was being taxed at the max withholding level for my tax bracket. I guess that's not the case?

themudcrabking t1_jeejcin wrote on March 31, 2023 at 1:13 PM

Claiming no deductions on your W4 and having nothing withheld are 2 separate things.

The more deductions claimed the less you’ll have withheld.

My previous comment is assuming you are not having anything withheld. You should review your W4 and W2 in order to understand which statement is correct (0 deductions or 0 withholding).

megarooski3 t1_jeek020 wrote on March 31, 2023 at 1:18 PM

Thank you!

We were able to get a meeting with a CPA yesterday for today, so hoping someone can make sense of this. I know each person's situation is different, but i can say friends/colleagues of mine that are also making around the close to the same range as me and not claiming allowances/or further withholdings are not having this issue But thank you so much for all your help, these have been really helpful comments.

Its-a-write-off t1_jeej83e wrote on March 31, 2023 at 1:12 PM

That is not the case, no.

DeluxeXL t1_jeen1d9 wrote on March 31, 2023 at 1:42 PM

The fact that your paychecks are still not $0 means you haven't reached maximum withholding. Maximum withholding is 100% of your paycheck.

Also, you haven't mentioned

the amounts of your FIT withholding and your spouse's FIT withholding.
the amounts of your pretax deductions and your spouse's pretax deductions. (Pretax deductions are things like health insurance, FSA/HSA, and pretax 401k)

(Supply the amounts for 2022 if your question is focused on 2022)

IKnowStuff t1_jeejeaq wrote on March 31, 2023 at 1:14 PM

You are in the 35% federal tax bracket, but the federal withholding on your commissions is probably 22%. That means you have about $10,000 too little federal withholding just from that. You need to either make estimated tax payments or increase the withholding on your other income to compensate for the underwithholding on your commissions. (You could ask your payroll department if there's a way to increase withholding on your commissions, but usually there isn't.)