I will be filing as a head of household with one dependent my child. I bought a house that will be ready on march (being built) and i will be needing more money to make the payments. right now i put 0 exceptions. any help
thanks
2006-11-21 04:22:57 · 5 answers · asked by erika 2 in Business & Finance ➔ Taxes ➔ United States
When you fill out the W-4 form, there's a worksheet to help you estimate the number of allowances to claim. At the very least, you can have two--one for yourself and one for your child.
Once you start making house payments, the taxes you pay out of your paycheck can be decreased because mortgage interest is deductible on your income tax return. Be sure to look at your W-4 again in April or May and do the Deductions & Adjustments worksheet.
2006-11-21 06:15:13 · answer #1 · answered by Mooseles 3 · 0⤊ 0⤋
The link below is a calculator the IRS provides to help determine the best number of exemptions to claim on a W-4. Unfortunately this is for 2006. For 2007, the calculator is not yet available. My best guess is that you should claim 3. One for yourself, one for your child, and one for the deductions the house will allow. Without knowing about any other deductions and/or credits, I can only guess. I am single with no dependents and a condo I am buying. I can claim 2 and receive a refund.
Edit: jade poe (first answer) has withholding allowances backwards. Claiming '0' results in the largest $ amount being withheld. Claiming exempt results in no withholding at all. If she is related to a tax professional, she misunderstood what they told her.
2006-11-21 12:51:56 · answer #2 · answered by STEVEN F 7 · 0⤊ 0⤋
I assume you're talking about allowances on your W-4, the form you file with your employer that determines how much income tax is withheld from your paychecks.
You'd probably be OK taking two allowances, since you will have yourself and your child to claim as exemptions when you file your tax return.
If you are eligible for the Earned Income Credit, it's possible to get that through the year rather than at the end when you file your return.
2006-11-21 04:34:42 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
The more exceptions you claim the less taxes they take out of your check. Your best bet would be to claim one on your w-2. This will give you more in your paycheck and still ensure that you will get some refund at the end of the year. Which is always better than owing!
2006-11-21 04:32:41 · answer #4 · answered by Barbiq 6 · 0⤊ 0⤋
if you put 0 exemptions, then you have the least amount of taxes beingtaken out, which would give you more money in the month for your payments. however, when you file in april, you will probably find that you will end up owing the IRS more than what they took. on the other hand say you filed exempt and 10 then they take out much more, which might affect your ability to make paments, however you will most likely get a refund (this refund of course would be interest free as it wasn't in a bank). so it just depends... hope that helps...
2006-11-21 04:28:49 · answer #5 · answered by Jade Poe 2 · 0⤊ 3⤋