Paying taxes twice in CA

[dde1878]

me and my fiance went to file taxes last night and to our amazment we owed taxes. let me explain. we had a child at the end of 07 so she was on Paid Family Leave at the beginning of 08, then went on unemployment and Training Benefits for the remainder of the year. we also have 2 more dependents, for a total of 4 exemptions with head of household. My fiance now owes $170.00 in federal taxes. You pay taxes on the money they take out of your payroll checks for unemployment deductions, and then when you collect that money you have to pay taxes on it again. So heres the deal one person 4 exemptions and collected all year the money you have already payed taxes on once, now have to pay them for the second time.

 

[haynchinook334]

That's how it was when my wife took out her 401K. She took out $45,000, and it got taxed. We got $35,000 after taxes. And then, We had to pay $3,000 back for taking out $45,000. I guess the IRS found a loop hole for getting more moneys.

 

[jcardona1]

send them an IOU just like they would have done if you were getting a refund. damn CA and their liberal policies. its ridiculous:

State Controller announces delay for tax refunds


Due to the state's persistent cash and budget problems, the State Controller announced on Friday, January 16, 2009, that because of the state's cash shortfall he will have to delay refunds for 30 days starting February 1, 2009 for Personal Income Tax and Business Entity taxpayers. Refund payments will resume when the State Controller indicates there is enough cash available to make refund payments.
Frequently Asked Questions

1. Should I wait to file my return? No. If you have all of the documents and information needed to prepare your return, you may file it any time through April 15 (or October 15, if filed on extension). The refund delay does not affect the return due date or our ability to process returns.
2. When will the refund delay be lifted? It is anticipated that as soon as the cash and budget problems are solved, the refund delay will be lifted. Check this website for updated information on the status of the delay.
3. Once the budget is passed, will my refund be issued? Not necessarily. Even though a budget is enacted, the state will need sufficient cash to pay outstanding debts, including tax refunds. Depending upon the circumstances at that time, there may be a delay before the state has enough cash to pay refunds.
4. Will you still honor my direct deposit request (DDR) when the delay is lifted? Yes, your DDR will be honored when the state resumes the payment of refunds.
5. Is it possible that I will be issued an IOU? If the state’s cash flow problems do not improve, the Controller may need to issue IOUs. If the Controller has to issue IOUs, you will receive a paper IOU warrant, even if you requested a direct deposit of your refund.
6. Are all refunds delayed or just 2008 tax year refunds? All refunds are delayed, regardless of the tax year they apply to. For example, an approved refund claim for tax year 2006 will be delayed until the state’s cash and budget problems are solved.
7. Am I entitled to receive interest because of the delay? It depends upon the length of the delay. For individual taxpayers, interest on current year refunds is only paid if your refund is not issued within 45 days after April 15, or the date that your return is filed, whichever is later. If you are entitled to receive interest on a prior year refund, you will receive it when your refund is issued.
8. Can I apply my refund as an estimated payment toward my 2009 taxes? Yes, if on your 2008 return you request that your refund be applied toward your 2009 taxes, we will apply the amount you designate when we process your return.
9. If I owe for other debts collected by FTB, will my refund be applied toward that debt? Yes. You will be refunded the difference, if any, once the delay on issuing refunds is lifted.

 

[cchhcc]

Yeah........ enjoy those CA liberal economics and take Nancy back home before she spreads it to us all!

%&$*! It's too late!

 

[kafiltafiisch]

that makes no sense to me...

 

[Docsoldlady]

 

[aldiaz33]

That's how it was when my wife took out her 401K. She took out $45,000, and it got taxed. We got $35,000 after taxes. And then, We had to pay $3,000 back for taking out $45,000. I guess the IRS found a loop hole for getting more moneys.

Your 401k is not taxed twice. Contributions to your 401k reduce your earned income; contributions are pre-tax. When you take a distribution from your 401K it is taxed as ordinary income. If you are under 59.5 years old in addition to having to pay ordinary income tax on the withdrawn amount you will also be hit with a 10% early withdrawal penalty. Because of the early distribution penalty, you shouldn't take money out of your 401K unless unless you absolutely need it, you are > 59.5 years old or you qualify under one of the several exemptions (first time home purchase, medical reasons, etc).

 

[jcardona1]

Your 401k is not taxed twice. Contributions to your 401k reduce your earned income; contributions are pre-tax. When you take a distribution from your 401K it is taxed as ordinary income. If you are under 59.5 years old in addition to having to pay ordinary income tax on the withdrawn amount you will also be hit with a 10% early withdrawal penalty. Because of the early distribution penalty, you shouldn't take money out of your 401K unless unless you absolutely need it, you are > 59.5 years old or you qualify under one of the several exemptions (first time home purchase, medical reasons, etc).

yeah, its just a 10% penalty for early withdrawal. some people think you getting taxed again but its not the case.

 

[jcardona1]

also IIRC, distributions from a retirement plan are also included with your taxable income. but since you already had the tax witheld, youll be fine here. the only extra you will pay is the 10% penalty

 

[dde1878]

yeah but unemployment is taxed twice. once when you make the money and again when you claim unemployment. the is outrageous to me. you work pay into it then get laid of and get your money back just to be taxed again when your out of work. doesn't make a bit of sense to me.