Help - filing 2007 taxes - newborn daughter and student loan interest deductions?

HELP!

My husband and I do not make any money under the table, so the figures I give are legitimate.

We make about $66,000 per year before taxes. We made about $300 in interest from some short-term investments. We had a daughter in 2007. I had $4,000 of student loan interest (can only deduct $2,500 apparently).

How in the world can we owe money? My husband and I plugged these numbers into the 1040 and we owe something like $200. We thought we'd get at least a $2,000 refund.

Where did we go wrong? HELP!!!

Help - filing 2007 taxes - newborn daughter and student loan interest deductions?

The only recommendation that I can make is to try Turbotax, it costs about $30 per tax season along with a fee for filing. But, you will get lots of help with deductions that you might miss, it updates your (possible) refunds as you do the worksheets and it keeps your records for the following tax year. You and your spouse may not have withheld enough by having used too many dependents (update your W-4s this year). Or, if you're still unsure, try a tax service like H %26amp; R Block.

Help - filing 2007 taxes - newborn daughter and student loan interest deductions?

The point of withholding is to break even, not get a huge refund.

66,000 wages + $300 = 66300 adjusted gross income.

66300 - 2500 - 10700 - 10500 = $42,600 taxable income.

This is about $5600 in tax. Child tax credit $1000.

Tax bill is about $4600.

If your total withholding was less than that, then yes, you would owe.

Help - filing 2007 taxes - newborn daughter and student loan interest deductions?

You didn't go wrong, actually, you went RIGHT. A refund is nothing more than the repayment of an interest-free loan to the government. You DIDN'T make that foolish financial decision and are to be congratulated.

Help - filing 2007 taxes - newborn daughter and student loan interest deductions?

You did not have enough withheld. When you start a job, you complete a Form W-4. This indicates how much should be withheld from your paychecks. The more that is withheld, the more you get as a refund or the less you owe. The less that is withheld, the less you get as a refund or the more you owe.

Help - filing 2007 taxes - newborn daughter and student loan interest deductions?

You owe because you didn't have enough deducted. I come up with a number somewhat higher than $200.

$66,000 - 10,700 standard deduction - 10,200 for 3 exemptions - $2500 for student loan interest is $42,600, which would be $5611 tax, minus the $1000 child tax credit is $4611. If you paid in $3900 I'd expect you'd owe the other $711.