The US tax system has a number of different flaws that needlessly complicate the tax-paying process. One of the biggest problems is tax withholding.
Typically, when someone starts a new job or begin drawing a pension, they are given a form W-4 along with its attached worksheet to determine their income tax with-holding election. The process seems straight-forward enough. All one needs to do is elect single or married and the number of exemption to claim. But this simplicity hides a very deceptive system that often leads to under-withholding and a resulting tax due at tax time.
The first problem with the withholding election is that selecting married or single does not relate to your marriage status but rather which table will be used to determine the amount withheld. In a two income household, a married couple may need to elect single to have enough tax withheld.
Second the number of exemptions can be wildly inaccurate depending on the amount of income earned and the amount of deductions that an individual can claim.
Third, the withholding election only takes into account the income from that source, not the total income. For example, if someone has multiple sources of income that are all quite small but add up to a large amount, each income source will likely withhold very little in tax even though the actual amount owed may be much greater.
The solution to this challenge is to engage in tax planning during the year to check your tax withholding and avoid a nasty surprise at tax time.