Could someone explain the IRS W-4 exemption process?

Answer 1

The W-4 is a form you fill out for your employer. They use it to determine how much federal income tax to withhold from each paycheck. If you follow the instructions and fill it out accurately, your withholding should come fairly close to your eventual tax amount, so you won't owe a lot when you file your return, but won't get a large refund either.

If you want to get a large refund, claim less allowances than you're entitled to - the fewer allowances you claim, the more will be taken out each pay period. But be aware that by doing that, you're giving the government an interest-free loan - it would be better to set up an automatic deduction into a credit union or bank savings account - then you get the interest.

Answer 2

the IRS-W4 is a form you fill out and give to your employer when you start to work for them. You list all the deductions you want withheld from your pay like how many dependents you want to claim on your income tax when you file your taxes and you can have an additional amount withheld at that time if you wish. You may change this form anytime you wish after you start work.

Answer 3

How plenty are you going to make? You paid no earnings tax final 365 days (till you had a lot of investment earnings). in case you will make below $5950 this 365 days (and below $3 hundred investment earnings), you will owe no earnings tax this 365 days. if so declare exempt. in case you will make over $5950, declare 0 (to owe not something at tax time), or one million (perhaps owe particularly at tax time). The 0 or one million are "allowances", that are used to calculate how a good number of your earnings is tax loose. Exempt skill you assume to not could pay any earnings tax for 2012, and you paid none in 2011, so all of you earnings is tax loose. "Tax loose" refers to federal earnings tax. Tax felony accountability is the earnings tax you pays, calculated on your tax return for the 365 days. You pay it the two via having the money withheld out of your paychecks, or via paying it at tax time (early the subsequent 365 days), or a mixture. in case you do not comprehend some words, ask for a proof of those words.