Filing my taxes for 2021 and my tax balance due is insane. I owe around $10k additional federal tax due to “underwithholding from my pay stubs” that I was NOT expecting. I’m not special. 2021 was my first full year at Amazon. My TC is $280k, broken down as $155k base, $110k year 1 bonus paid out in paychecks, $15k RSUs vested. Pretty typical comp (I’m L6 AWS). I already paid $50k in federal taxes on my W2, and did “sell to cover” for my RSUs. Filing single. Is this a common problem? Did I do something wrong? Shockingly (or maybe not 🥜) Amazon doesn’t offer a financial advisor to help with this.
Yeah, I owe 5k and was surprised. Owed last year, but was partially at my old job, so thought it was because the first 2 months were at a lower tax rate. Not sure why Amazon under-withholds?
You pick your own withholding rate. Amazon has nothing to do with it.
Yeah, but I reported the right amount of dependents, why can't they do the calculation correctly, like every other employer ever did?
It’s not because of Amazon, it’s because of Uncle Sam.
280 seems very low for L6. Welcome to the reality of making money. I would get used to this because it’s only going to get worse.
Yea good problem to have I guess. For context I’m BD, job family is “Tech Business Developer”
Location?
Looks pretty close to correct. Do yourself a favor and look up how tax brackets work so you're not blindsided in the future. Figure out how to decrease your tax liability by using retirement account like 401k, HSA etc.
Yea already maxing 401k, IRA (back door to Roth), and mega-backdoor after tax 401k. Taxes is next up on list of personal finance topics to learn lol
Get married. Best thing I did to save taxes. 💰
Only works is you marry someone with low TC, otherwise you may even get penalized.
Target a hot chick with low TC
owing tax isn't a bad thing FYI. IRS just needs their cut. either company over-withholds and you let the government borrow your money interest free for up to a year and get it back as a "tax return". or what you're experiencing now. either way the final taxed amount is the same
Just increase your withholding rate, and make sure you do it for RSU vests as well. Also owing some tax is not necessarily a bad thing. You have the same tax liability overall but are just holding on to your money for longer.
I am paying an extra 13K filing jointly. Both of us are withholding as singles. I think the problem is that stocks are getting withheld at a lower rate than they should.
Withholding as singles: there's your mistake. You need to withhold max, with 0 allowances. Or 1 allowance max for both of you. Our combined TC is around 210K and we have only 1 allowance now (or maybe even 0, need to check, but it was 2 before). Anyways, went from paying 4K a year on return (and I've been fined last year for that) back to receiving 1K after those changes.
Aren’t singles taxed at the higher rates compared to other W4 options? I have 0 allowances. I mean which W4 option will result in highest withholding for a given salary with 0 allowances.
At this TC your W-4 should have 0 allowances. What number do you have? I'm not sure about RSU vesting, but that shouldn't make a difference until you sell. You also say you've been there for less than 2 years. Did you short stocks? Also, make sure you report stocks correctly. It's easy to get confused and end up paying more than necessary. Last, but not least, you are underpaying. I make less than that TC and withhold around 50K. If you keep on doing that, IRS will fine you for underpayment.
It says 0, should I change that? Didn’t sell anything this year except the 2 RSUS (out of 4) as part of “sell to cover”. I buy and hold boring index funds. Had no idea I could get fined for this. Appreciate the heads up 🙏🏼
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Same here. Paying 20k with joint married filling with tc of 500k and already paid 130k
At least we have company lol
Withholding for married filing jointly is assuming you're a one income household. Our tax code is written by and for boomers. You gotta withhold more. There's a checkbox for that.