do they take more taxes out of your paycheck or less taxes out of your paycheck?
2006-09-23 21:56:36 · 8 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
"An employee may claim exemption from Federal Income Tax withholding because he/she had no tax liability last year and expects none this year.
This does not mean that the employee merely received a refund on last year’s tax return and is expecting one this year too. This means that when preparing last year’s tax return that there was $0.00 tax calculated before considering amounts withheld or paid in and that the employee expects the same this year.
Very few employees would qualify for the exemption from withholding. An employee would have to earn very little to be below the income level of having no tax liability. Many factors come into consideration in preparing a tax return, but an example of an employee who might qualify for the exemption from income tax withholding in year 2003: Files Single who has 1 job, no dependents and no other source of income with total annual wages of less than $7,700.00."
To sum it all up-- they take less out of your paycheck. But you have to make sure you qualify."
2006-09-23 22:00:21 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Exempt means that you didn't have ANY tax liability last year, and won't have any this year. It's possible that you do meet that, depending on your income - if you do, just claim exempt and don't enter the allowances. Allowances are meaningless if you are exempt, that's all the online program is telling you - so I'm a little confused why your tax guy would tell you to claim exempt and to claim 5 allowances - you don't do both.. If your tax guy said you should be able to claim exempt, then do it, just don't enter anything for allowances. If you make under around $43,000 you should be safe claiming exempt. If you made over that, I'd stay away from exempt and claim the allowances, although you could claim more than 5, you should be good with at least 7, maybe more.
2016-03-27 06:07:38 · answer #2 · answered by Anonymous · 0⤊ 0⤋
if u claim exempt, only do it for 6 months and then change your w-2 to claiming 1 . it will even out for the year.
2006-09-24 05:57:03 · answer #3 · answered by Bandice 3 · 1⤊ 0⤋
Exempt would equal no taxes withheld. The number of exemptions reduces the amount of taxes withheld.
2006-09-23 22:19:07 · answer #4 · answered by John K 5 · 1⤊ 0⤋
They would not withhold any tax, but it won't change your legal filing status at the end of the year and you will end up paying if you are not really exempt.
2006-09-24 09:32:21 · answer #5 · answered by misslabeled 7 · 1⤊ 0⤋
Claim yourself and they will take less out of your paycheck.
2006-09-23 22:05:25 · answer #6 · answered by Anonymous · 1⤊ 0⤋
they take 0 taxes
2006-09-23 21:59:19 · answer #7 · answered by momoftrl 4 · 0⤊ 0⤋
no tax only takes out social security
2006-09-23 22:13:11 · answer #8 · answered by Xavier 2 · 1⤊ 0⤋