Can someone give me the "plain english" formula for determining the correct witholdings on my W2 if my goal is to not have to pay, but not get a big check back (I don't want the Gov't to be a no interest bank!)
Salient points:
I'm full-time
married, 4 kids
I itemize
no other critical deduction issues
2006-08-10 17:30:33 · 5 answers · asked by kre84him 2 in Business & Finance ➔ Personal Finance
Ask your employer for a W4. Fill in the blanks (not just the first page) and when you get to the end it will tell you how many dependents to claim to achieve your goal. The IRS also wants you to even out your pay so that you are not due a large refund.
Your itemization is a critical deduction issue. It can make a huge dollar difference in the amount of withholding tax you pay with each pay check.
There is no "plain English formula" because it depends on how much you make and other factors you will find on the W4.
2006-08-10 17:40:48 · answer #1 · answered by lcmcpa 7 · 0⤊ 0⤋
Figure what your tax would be on this year's income and itemized deductions, based on last year's forms since this year's forms aren't out yet. This will be pretty close. Or if nothing much has changed since last year for you, use your last year's total income tax.
Divide the annual tax by the number of pay periods you have each year to get the amount you need to have withheld each pay period..
Go to irs.gov and look at Publication 15, starting around page 38. Find the section for married and for the frequency you're paid. Look in the table for the amount you should have withheld, then look at the top row to see how many withholding allowances that would be.
2006-08-10 19:41:39 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
This is crazy, but the IRS does provide an easy tool to use in estimating your withholding. On their website irs.gov, you can locate the withholding calculator. It takes into account your earnings, previously withheld taxes, other sources of income, possible deductions, and gives an approximate total of what you will owe or receive at year's end based on current situation. Then it makes recommendations for raising or lowering your withholding. No guesswork or formulas on your part!
2006-08-11 10:52:55 · answer #3 · answered by Freddie 3 · 0⤊ 0⤋
Filing with spouse you have 6.
2006-08-10 17:36:57 · answer #4 · answered by BigPappa 5 · 0⤊ 0⤋
no idea - you need an acountant
2006-08-10 17:36:10 · answer #5 · answered by Anonymous · 0⤊ 0⤋