What exempt should I claim to receive a large refund????

Question

I heard if you claim a lower number of exempts on your W-4( the form from your employer) then pick the other exempt that you qualified for back up in the end (filing your taxes) you could receive a larger return. Is this true?

Answer 1

If you claim zero allowances on your W-4, yes, you might get a good refund. That's not because you'll pay less taxes, but because they'll take out more each pay all year, then you'll get the extra back at the end. This gives the government a tax-free loan for the year of your money.

Answer 2

"Exempt" means that you are not subject to tax withholding, and therefore you are instructing the employer to withhold NO income tax from your pay. Checking "Exempt" is an easy way to get a huge tax BILL next April.

The best way to get a large refund is to have a large amount of tax withheld. The less exemptions you claim, the more tax is withheld.

The highest tax is withheld if you select status "Single" with 0 exemption.

You can also have an additional amount withheld from each paycheck by filling in the "additional amount withheld" section of the W-4 form.

Answer 3

Why would you want a huge tax refund?? You are basicly letting the government earn interest on your money without receiving any benefit for yourself. It is a horrible savings plan. You should consider opening a savings account instead.

Answer 4

Also, if you claim zero and they owe you too much of a refund at the end of the year, the IRS will penalize you for not properly estimating your taxes. Lovely, isn't it?

Answer 5

yes its true but you could also just select a higher with holding % and that would do the same thing.