Can someone pls explain this to me in simple terms : why do I get $2300 in Fed refund and why do I owe $1500 in State?

Intel
InisMona

Go to company page Intel

InisMona
Mar 16, 2021 13 Comments

I work at Intel. I don’t earn super high.
Why do I owe $1500 in State Tax in CA?
My W2 income is even less than 100K (box 1).
Why oh why do I owe taxes?

Pls don’t troll! I can’t figure it out and how can I fix my W4 or whatever withholdings?

Thanks!
#irs #tax2021

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  • Amgen
    Fin4eng

    Go to company page Amgen

    Fin4eng
    Cuz you overwitheld $2300 in federal taxes and under withheld $1500 in state taxes. Just adjust your w4
    Mar 16, 2021 1
  • VMware
    realvm

    Go to company page VMware

    realvm
    California charges HSA contributions which could be a reason if your employer didn’t take that into account. Just guessing here.
    Mar 16, 2021 0
  • #newtoadulting
    Mar 16, 2021 0
  • VMware
    nope12

    Go to company page VMware

    nope12
    You put 0 for both state and federal and you still owe taxes to state? If you're filing single and you don't have any stock sales (ESPP, stock bests, etc.), there is some kind of an error either in your filing or when the company was doing a deduction.

    It's better to owe taxes than get a refund because of the time value of money. You effectively gave the government a 0% loan. If you owe taxes, you would be the one getting a 0% loan. You could have used that money and invested it or put it in a savings account and pocketed the interest.

    If you're filing single, there's something amiss. 0 allowances usually end up with a refund. Feel free to ask questions - I hate giving money to the government with a passion.
    Mar 16, 2021 2

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    • Intel
      InisMona

      Go to company page Intel

      InisMona
      OP
      Thanks for explaining. I’m now gonna pay $100 more every month in state. I’d read somewhere its better to owe them tax than get a bigger refund. I just want to even it out hopefully.
      Mar 16, 2021