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Members of the Maryland Association of Certified...


Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Q: My wife and I both have federal taxes withheld from our paychecks. When we get to the end of the year, we owe a lot of money. Given that we do have some deductions, it seems like we're doing something wrong. My wife claims no exemptions, and I claim one. What's going on?

A: There are several possibilities:

* When both spouses work, many find that they do not have enough tax withheld when using the married withholding rate. To avoid this, use the higher single withholding rate.

* You may have nonwage income, such as interest, dividends, alimony, unemployment compensation or self-employment income. If this is the case, you should withhold additional amounts from your paycheck or make quarterly estimated tax payments.

* You may have more than one job at a time.

To change the tax withheld from your paychecks, submit IRS Form W-4 to your employers. See IRS Publications 505 "Tax Withholding and Estimated Tax" and 919 "Is My Withholding Correct for 1995?."

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

To submit a question, call Sundial, The Sun's telephone information service, at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford 836-5028, and in Carroll 848-0338. Using a touch-tone phone, enter 6225 after the greeting. Push 1 to submit a tax question. Push 2 to hear a tax tip. No questions will be answered by phone. Please Leave your name and phone number.

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