How much will each additional allowance reduce the taxes taken from your salary if you earn $30,000 per year?

Question

Increasing the number of allowances in US tax law will reduce the amount of taxes you pay in any given paycheck. As long as I can figure out how much tax is necessary to pay in order to not owe in April, how much will each additional allowance provide me in my pocket?

I get paid semimonthly.

Answer 1

I assume you are filing single and you use the standard deductions...

this means (tx yr 05) 30,000 - 8200 = 21,800 taxable income.

tax on 21,800 for single is $2,916.00 for the whole year.

Now divide by 24 pay periods = $121.5 per paycheck.
{(Or is only 6 pay periods then divide by 6 = $486.00 per paycheck) ($486 on the W4)}

This is Federal tax only, do the same thing for State tax if any and add them together.
Now just look at your pay stub and have the payroll department help you fill in the W4 and adjust the federal tax withholding to $122.00

hope this helps.(if need more help drop into a H&R Block office with a pay stub, they will help you)

gl

Answer 2

depends on how often you get paid. Check out the link http://www.irs.gov/pub/irs-pdf/p15.pdf - start on page 36.