Credit For Taxes Paid To Other State Worksheet: Fill & Download for Free

I am assuming this is about the U.S.? And about income taxes in particular?For income taxes, two things happen:Money is withheld for taxes from every paycheck. The employer withholds an amount depending on how you filled out the form W-4 when you started working. The withholding is supposed to approximate how much you need to pay in taxes, but is not the exact amount.After the end of the year, you file an income tax return with the IRS at the beginning of the next year. In it, you calculate the actual amount of tax you are supposed to pay, based on your final income and deductions and tax credits, etc. If the total amount withheld in (1) above is more than the amount you are supposed to pay, the extra amount is refunded to you ("tax refund"); conversely, if the the total amount withheld in (1) above is less than the amount you are supposed to pay, you need to pay the difference. So, (to a certain extent) the exact amount withheld doesn't matter that much, because it will be adjusted to the same amount at the end.Ideally, the withholding should be set so that it approximately matches what you should pay in taxes, because if you got too much taxes withheld and get it back as a refund, you've basically given a free loan to the government. And if you got too little taxes withheld and you owe too much (more than a certain amount), the IRS will make you pay a penalty, because you've basically gotten a free loan from the government.The optimal solution would be to under-withhold by a small amount, not enough to trigger the penalty. However, that is kind of risky. The withholding worksheets generally make you over-withhold by a small amount. So most people get refunds.So the answer to your questions is, both. Taxes are paid automatically, but you also need to file an income tax return at the end. What happens if you don't file a tax return? It depends on whether you are supposed to get a refund or owe taxes. If you are supposed to get a refund, probably nothing will happen other than you not getting your money. You only have up to 3 years to amend past tax returns to claim past refunds. If you are supposed to owe money, the IRS will probably come after you and make you pay not only the amount you owe, but interest and a penalty.In addition to income taxes, there are also payroll taxes -- the FICA tax, which includes the Social Security tax and the Medicare tax. Unlike the income tax, these are paid in exact amount directly from your paycheck, so they do not need to be adjusted later. This is because these taxes are a fixed percentage of your wages, so the exact amount to pay per paycheck is easy to figure out.State taxes are separate, but they work similarly to what I described above for federal taxes. If the state has an income tax, the employer will also similarly withhold a certain amount from your paycheck; and it is adjusted when you file your state income tax return.

The 3.5% down payment you mention tells me that you are considering an FHA loan..Anytime you do anything with real estate—buy, sell or refinance—there are certain fees and costs involved. There will nearly always be two policies of title insurance (one for the owner, one for the lender), escrow fees, recording and notary, appraisal, and certain lender fees for underwriting, processing and document preparation. There may also be discount points (one “point” is 1% of the loan amount) to “buy down” the rate.These fees and costs are collectively referred to as the non-recurring closing costs, since they happen only once, in connection with that specific transaction.There is another category of closing costs, called prorations and prepaids. These are items that you’ll pay regularly as the owner of the property.These closing costs include your first year’s homeowner’s insurance, prorated interest, possible prorated property taxes, and the initial deposit to fund your impound account for the future payment of taxes and insurance.FHA loans require mortgage insurance. It is paid in two forms: the up-front MI premium and the monthly renewal. For most FHA loans, the up-front premium is 1.75% of the base loan amount. It is added to the loan, so it is not an out-of-pocket cost. The monthly renewal premium is .85% for most FHA transactions.If you are buying a home for $150,000, your down payment will be $5,250 (3.5%). Your base loan amount will be $144,750. The up-front premium of $2,533 (1.75%) will bring your actual loan amount to $147,283. The up-front premium will be listed on your closing statement as a debit, as all other closing costs will be.It is impossible for me to tell you accurately what your total closing costs will be, because they vary by state and even by city in some cases. The amount of money you’ll deposit to fund your impound account for taxes and insurance will vary according to the time of year an the tax calendar in your state.Here is an example for California. We’ll assume that escrow closes on 4/15, with the first mortgage payment occurring on 6/1.Note that the non-recurring closing costs (including the up-front MI premium) come to $4,481. The total closing costs, including the initial deposit to fund your impound account, are $1,445 in this example.FHA requires a down payment of 3.5% for most programs. This is called the statutory investment. Many first-time buyers are appalled to discover how much other money is involved in addition to the down payment. In this example, it is almost equal to the down payment itself.There are four ways to handle the closing costs:Pay them out of pocketAsk the seller to pay themGet a rebate from the lender to cover some or all of the costsCombine any or all of the aboveSellers are permitted to pay all the buyer’s closing costs up to 6% of the loan amount. The amount they credit comes from their sale proceeds. When a seller agrees to pay closing costs, they are essentially getting a higher price for their property. This happens often with FHA and other transactions with small down payments.A buyer can get a rebate from the lender by agreeing to a slightly higher interest rate. Raising the rate .25% will typically generate a rebate of about 1% of the loan amount.Your lender can give you an itemized listing of the closing costs. It is called a closing cost worksheet or something equivalent. There is another document listing closing costs, a Loan Estimate, but that is a compliance document. Issuing a Loan Estimate is not a trivial process, but any lender should be more than willing to give you a worksheet so that you have an accurate idea of what the costs (and cash requirements) are likely to be.I hope this is helpful. Good luck!

It is—or at least was, prior to the 2017 tax code changes that take effect in 2018—fairly common for taxpayers who itemize to have very large refunds unless they deliberately overclaim allowances. However, the optional W-4 worksheets actually allow for you to estimate this, and so you can compute an appropriate number of allowances to yield a fairly close match if you followed them. Claiming more allowances than you can justify in order to have have less tax withheld then you will ultimately owe is a violation of tax law and may result in penalties.However, the changes to the tax code for 2018 will make itemization less likely to be beneficial for a wider range of taxpayers, many of whom will simply need to go back to using the standard worksheet to determine allowances. My strategy, prior to 2018, was to (early in each year) calculate the number of allowances that would result in withholding the same amount in any year as we paid in tax the prior year (since the IRS rules state that no penalty will accrue if your prepaid tax in one year was at least as great as your tax due in the prior tax year). This usually results in a modest refund for us because of the child tax credit. In 2018, however, we are using the standard allowance calculations because the changes in the tax code mean that we may well not itemize in 2018, and in any case withholding to match 2017’s taxes would be foolhardy in a year with a significant change in tax law.