I am currently claiming 2 allowances, and i ended up oweing the IRS about 200+ dollars. I make about 13,000.. how many allowances should i claim?
2006-06-17 05:25:56 · 18 answers · asked by CJimen 1 in Business & Finance ➔ Taxes ➔ United States
I am single, no kids, live in my own apartment pay my own phone and all that stuff i am going on 20.
2006-06-18 04:05:26 · update #1
I assume you mean the W-4 form. You are doing just fine with 2. Stay at 2. You should be claiming what you really can deduct. You might get away with 3, but I don't have the numbers handy.
The ones who are saying to claim 0 or 1 aren't really thinking it through except for the person that mentioned spending control.
If you claim 0 or 1 when you're doing fine with 2, the government gets to keep your money interest free before returning it to you 6-18 months later. What's the point of that if you can put that money to better use? For example, they might tax an extra 100 per month from your paycheck and then 6 months later, they'll give you exactly 1200 back. There's no gain from that. As long as you withhold roughly the amount that you would have owed in taxes and it sounds like you are, there are no financial penalties from the government.
200 sounds about right if you're doing things correctly.
2006-06-20 11:18:40 · answer #1 · answered by Arbitrage 7 · 8⤊ 2⤋
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2006-06-17 05:28:29 · answer #2 · answered by <*}}}>{ 3 · 0⤊ 0⤋
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2006-06-17 05:27:51 · answer #3 · answered by Rusty 4 · 0⤊ 0⤋
You should stick with 2; owing $200 is not a large amount to owe. If you change to 1, then you will get money back when you file your taxes, but will have less money to use throughout the year. And remember, they don't pay you interest on that money.
Start a savings account; if you put $25 month into it, you will have $100 left over after you pay your taxes, plus the interest it's grown. Keep saving at that amount and start investing it in safer securities. Without much effort, you will be saving for the future or have money in the event of an emergency.
The government will take the same amount of money, regardless of whether you overpay throughout the year and they refund, or if you underpay throughout the year and they give you a refund. The benefit of having more money in your check is that you have more cash in hand, and are able to earn interest on the money rather than the government.
A single individual is NOT required to only have 1 exemption; that is a guideline. There are numerous factors that can affect the number of exemptions; one example is owning real estate.
2006-06-17 05:31:59 · answer #4 · answered by Garth 6 · 3⤊ 0⤋
What To Claim On W2
2016-12-10 19:59:28 · answer #5 · answered by ? 4 · 0⤊ 0⤋
It depends on your situation--are you single, married, have any dependents? The allowances you claim on your W-4 only determine how much money will be withheld from your pay by your employer. It doesn't change the tax you will owe when you file in April. If you don't want to owe the IRS, either claim what you are entitled to or less (for example, if you are married and have 2 kids, claim either 4 or less). Generally you will either break even or get money back. If you are single with no dependents and claiming 2, you are not having enough withheld from your salary to cover the taxes you will owe at the end of the year.
2006-06-17 05:30:27 · answer #6 · answered by besoseda 3 · 0⤊ 0⤋
If you mean the W-4 form you fill out when you are hired, claim zero. All it does is take more out of you in taxes during the year.
I actually go one step further and have them withold another $12/ week, and increase it when I get a raise. I don't know if this is recommended, but it works for me.
Keep in mind, laws may be different depending on where you live. If you have an accountant do your taxes or have an IRS office in your area, talk to them. Believe it or not, they do try to be helpful.
2006-06-17 05:39:24 · answer #7 · answered by posymouse 2 · 1⤊ 0⤋
First you mean your W-4. Since you only owed the IRS about
$200, then you are doing just fine by keeping your money and paying the IRS later. It seems to me that you need to keep all of the money that you can from your paycheck. If you are looking for a refund, then only claim 1. Your refund should be about $200 for this year and about $400 next year assuming that your income doesn't change dramatically.
2006-06-17 05:32:33 · answer #8 · answered by Steve 6 · 0⤊ 0⤋
If you claim one, you might end up paying next year. If you can 0 there will be more taxes coming out of your check but u probably wont be owing next year. For the record they are called "exemptions" An allowance is when you ask your employer to take out an amount in addition to your regular federal taxes. If you are a student you might want to look into education credits and itemizing to lower your taxable income (Your tax professional should tell you about this) !!
2006-06-18 05:58:46 · answer #9 · answered by Anonymous · 0⤊ 0⤋
If you can live without the cash each week, I would claim 0 deductions and get a refund when you file your taxes. I know it's stupid letting the government have your money interest free during the year, but I can never seem to save a penny on my own so this method works for me.
2006-06-17 10:09:57 · answer #10 · answered by anyang2 2 · 2⤊ 0⤋