We Owed $10,000 in Taxes 😱😱😱 | Summary and Q&A

3.7K views
June 25, 2021
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Debt Free Millennials
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We Owed $10,000 in Taxes 😱😱😱

TL;DR

The video discusses why the creators owed a significant amount in taxes for 2020 and provides tips on avoiding a large tax bill.

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Key Insights

  • 👻 Owing taxes can be seen as a sign of financial success in terms of business income and stock market returns.
  • 👻 Incorrect withholding on the W-2 can result in owed taxes, and employers should adjust withholdings accurately.
  • 😫 Setting aside a specific percentage of monthly revenue for taxes can help avoid owing too much at the end of the year.
  • 🚕 Utilizing online tax software, such as H&R Block or TaxSlayer, can be cost-effective for filing taxes.
  • 🥶 The IRS provides a free filing option for individuals with annual incomes of $75,000 or less.
  • ❓ Refunds from taxes indicate overpayment throughout the year and could be better utilized through investing.

Transcript

so what is today's video about uh taxes everybody's favorite yeah this past year we owed a ton in taxes it's unbelievable so we are going to talk about why that happened and what are some things that we're going to do to avoid it and then what you can do to make the most out of your taxes so you don't owe as much as we did hey guys it's justine wit... Read More

Questions & Answers

Q: Why did the creators owe a significant amount in taxes for 2020?

The creators owed a large sum due to incorrect withholding on the W-2, underestimating quarterly tax payments, and short-term capital gains from stock sales.

Q: How did the creators plan to avoid owing too much in taxes in the future?

They will set aside a percentage of monthly revenue for taxes, based on actual income, and adjust withholding amounts accordingly.

Q: What is a withholding estimator, and how can it help with taxes?

A withholding estimator on the IRS website helps calculate how much should be withheld for taxes based on individual circumstances, ensuring accurate withholding amounts.

Q: Is it necessary to hire a CPA to file taxes?

If you only have a simple W-2 and a few additional tax forms, you can easily file your taxes using online tax software like H&R Block or TaxSlayer.

Summary & Key Takeaways

  • The creators owed almost $10,000 in combined federal and state taxes for 2020 due to various factors such as incorrect withholding on the W-2, underestimating quarterly tax payments, and short-term capital gains from stock sales.

  • They consider owing taxes from a successful business and good stock market returns as "champagne problems," but are frustrated by the incorrect withholding on the W-2.

  • To avoid owing too much in taxes in the future, they plan to set aside a specific percentage of monthly revenue for taxes and adjust withholding amounts accordingly.

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