I am single and currently paying $1200/per month in State and Federal taxes.. I am just wondering how can I cut that # down so i wont pay that much per month.. End of the year I only get about $1000 back.. Can I claim a sibling as dependent? please give some ideas..
2006-06-12 15:51:38 · 10 answers · asked by fmtjatt 3 in Business & Finance ➔ Taxes ➔ United States
1. Put money away in a 401K. If your company matches it, you can make money on it right away. Second, it reduces your taxable income (as you are not charged taxes on the money you save), and might put you in a lower tax bracket. You can save $14,000 annually.
Try $50 a month for starters.
If your company does not have a 401Kput money into a IRA. Again, the money you put away is not taxed. You can save up to $4000 annually.
2006-06-12 16:05:47 · answer #1 · answered by man_about_the_net 3 · 0⤊ 1⤋
There is a difference between actually paying taxes and having money withheld from your pay every payday. If what you want to do is to have less withheld every month then simply fill out a new W-4 form and claim a higher number for your withholding allowance. It doesn't have to be based on anything siblings have nothing to do with it. It's a withholding allowance, not an exemption or a dependent or anything like that. If you are claiming 0 now, change it to 1, 2, 4, 8, 10, whatever. The higher the number the less will be withheld and the more you will get in your paycheck..this has no effect on the tax you will actually owe, so if you have a lot less withheld during the year you would end up having to pay at tax time instead of getting a refund. If you had no federal income tax liability at all in the prior year and do not expect your situation to change, you can enter "exempt" and have nothing withheld at all.
2006-06-12 23:13:35 · answer #2 · answered by Kokopelli 7 · 0⤊ 0⤋
The easiest way to reduce taxes is to max out your your 401K savings plan and put as much as legally allowed into an IRA or Roth IRA. If you are paying that much in taxes, and only getting $1000 back, than you can change your withholding allowance from 0 to 1.
2006-06-12 23:03:29 · answer #3 · answered by andy 7 · 0⤊ 0⤋
You can only claim a sibling as a dependent if you are giving the majority of the support of this sibling. You could start a small business in your home.
2006-06-12 22:58:31 · answer #4 · answered by patclem2 4 · 0⤊ 0⤋
Open a flexible spending account at work. It will reduce your taxable income and you use the money to reimburse your self for any out of the pocket medical expenses. If you're in the 25% tax bracket and have $1000 of out of pocket medical expenses you'd save $250 on your taxes by using this.
2006-06-13 11:43:23 · answer #5 · answered by rudge 2 · 0⤊ 0⤋
If you have any family member that stays over 6 months in your household over the 12 month period rather it be just here and there occassionally or every weekend. If it adds up to the amount of 6 months, then you get to claim them. Make sure nobody else is claiming them
2006-06-12 22:58:18 · answer #6 · answered by Keri L 1 · 0⤊ 0⤋
If your sibling is living with you and under 18 and is not a dependent by your parents, then you can...
2006-06-12 22:55:07 · answer #7 · answered by :-) 3 · 0⤊ 0⤋
Find a liberal, croooked accountant!!!!
No cannot claim your sibling as a dependent.
2006-06-12 23:01:55 · answer #8 · answered by newyorkgal71 7 · 0⤊ 0⤋
buy a house
start a business
claim yourself as dependant
2006-06-12 22:55:26 · answer #9 · answered by igotalife2000 2 · 0⤊ 0⤋
buy a house, have children, start your own business (so you can deduct expenses), give to charities
2006-06-12 22:55:23 · answer #10 · answered by BigDaddy 4 · 0⤊ 0⤋