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We had been a one income family for 20+ years and always received a refund at tax time. In 1999, I went to work earning > $6.00 p/h; claiming zero allowances. Husband claimed 1 allowance. At tax time, we owed apx. $500 more in Fed. taxes but received a refund from State as usual. For Y2000 wages, husband changed his W4 Withholding to zero, I kept mine at zero and we now owe $300. What gives?

From our AGI of apx. $37,000, we take the standard deduction for married, filing jointly ($7,350)and 2 exemptions ($5,600). Our Best Guess is that my employer is NOT withholding the correct amount of Fed. tax but since I work for Wal-mart, I am finding that a little difficult to believe. Will receive a refund from State, so that's not a problem.

Any suggestions as to why this is happening would be appreciated. I shudder to think that W-M is miscalulating my Fed Withholding amounts but what else could it be?


It's basically the fact that between you you get only one standard deduction. If you want to verify that your employer is withholding the correct amount, based on your W-4, download a copy of Publication 15 from www.irs.gov. That publication has the withholding tables. If you want to get your balance due closer to zero, go through the two-earner worksheet on the W-4.

Phil Marti
VITA Volunteer
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