Why do I owe $28 in taxes? Did I do something wrong

I just finished filing my taxes for the first time since getting a steady salary. I’m filing single with the standard deduction, no state taxes since I’m in Florida, and I contribute to my 401k. I also make monthly payments on my student loans.

This year, I owe $28 in federal taxes. Is this normal? Does it mean my company is getting my withholdings right? I used to get small refunds when I worked part-time, so this feels a little different.

Yeah, it looks like your company got it pretty close. If you only owe $28, your withholdings were nearly perfect.

Clarke said:
Yeah, it looks like your company got it pretty close. If you only owe $28, your withholdings were nearly perfect.

People don’t realize that a smaller refund means you’re keeping more of your money throughout the year.

@MegWHITGAL
That’s actually fine with me.

@MegWHITGAL
It’s wild how some people are excited about big refunds. They’re basically letting the government hold their money interest-free all year.

Beckett said:
@MegWHITGAL
It’s wild how some people are excited about big refunds. They’re basically letting the government hold their money interest-free all year.

One time I owed $5,000 because my old company messed up payroll taxes. It was awful, but now I always withhold a bit extra just to be safe.

@Emerson
I get that, but some folks overdo it. I’ve seen people get $6,000 refunds on small incomes. I’d rather keep that money and put it to work during the year.

Beckett said:
@Emerson
I get that, but some folks overdo it. I’ve seen people get $6,000 refunds on small incomes. I’d rather keep that money and put it to work during the year.

Wow, $6,000? I thought only people with a lot of kids got refunds like that.

Beckett said:
@Emerson
I get that, but some folks overdo it. I’ve seen people get $6,000 refunds on small incomes. I’d rather keep that money and put it to work during the year.

That’s usually from refundable credits. Someone with two kids and a $30k income could easily get over $6k back.

Beckett said:
@MegWHITGAL
It’s wild how some people are excited about big refunds. They’re basically letting the government hold their money interest-free all year.

I hear you, but for me, getting a bigger refund forces me to save. If I get an extra $40 a week, I’ll probably just spend it.

That’s great accuracy. If you got paid 26 times last year, your company missed the exact number by just $1 per paycheck.

Bennie said:
That’s great accuracy. If you got paid 26 times last year, your company missed the exact number by just $1 per paycheck.

The hardest part for me is getting paid once a month instead of every two weeks.

@Soren
Monthly pay can be tough, but if you’ve learned to manage it, you’re already ahead of the game.

@Soren
Yeah, it’s tricky to adjust to, but you nailed it for taxes this year. That’s one less thing to stress about.

@Soren
Throw your spare change in a jar all year, and that’ll cover your taxes next time!

You’re doing great. You almost hit the sweet spot of owing nothing or getting nothing back.

Paxton said:
You’re doing great. You almost hit the sweet spot of owing nothing or getting nothing back.

So when people get big refunds, it’s because they overpaid during the year?

Soren said:

Paxton said:
You’re doing great. You almost hit the sweet spot of owing nothing or getting nothing back.

So when people get big refunds, it’s because they overpaid during the year?

Exactly. Sometimes it’s over-withholding, and other times it’s because of refundable credits.

@Clarke
Or if you’re in Colorado, it might be that unexpected Tabor refund.

Soren said:

Paxton said:
You’re doing great. You almost hit the sweet spot of owing nothing or getting nothing back.

So when people get big refunds, it’s because they overpaid during the year?

Yep. A big refund just means you gave the government an interest-free loan.