I recently got married to a woman with a 2 yr old. Obviously this changes my tax standing. I make ~57k/ year and she makes ~30k/year. Last year's W-4 (when I was single), I took 1 deduction, me. She took 3 (herself, her little boy, and head of household). FYI: Something I just learned in the difference between last year's taxes, and this year's.....the marriage penalty tax is a killer. Anyway, I've been re-evaluting how we should set up our W-4s. I've been to the IRS's website and used their calculator. It said the dumbest thing....we should both claim 0 and actually have $166 removed from my paycheck. This obviously doesn't make since that means they will be taking even more out our paychecks and we're getting a refund now as it stands. Did the W-4 paper worksheet, and it said to claim 0 and have $10 taken out. Went to H&R Block's website calculator and it said for me to claim 10 and her claim 7. This makes no sense. We are trying to avoid a refund and oweing. Ideas?
2006-12-12 01:56:04 · 3 answers · asked by scotty_b_1976 3 in Business & Finance ➔ Taxes ➔ United States
Details: We do not own a home, and it looks like we will get more if we take the standard deduction instead of itemizing it.
2006-12-12 02:08:42 · update #1
BASED ON 2006 Information:
You have total Income of 87k (57+30).
If you claim the child as a dependent, you have 3 exemptions @ $3300 each = $9900
Married Filing Joint Standard Deduction = $10,300
Taxable Income = $66800 (87000-9900-10300)
Tax on this amount is $9,821
You may be eligible for the $1k child tax credit which would reduce your tax to $8,821.
Therefore you & your wife need to pay in a total of $8,821 for the year (assuming 2006 rates) on your federal taxes in order to avoid a refund or oweing.
I do not have access to the withholding tax tables, but you can use this to figure out how much should come out of your paychecks each week and tweak your W4's accordingly.
Personally, I would recommend paying in at least a little more than the minimum. This will provide you with a cushion should you not be eligible for the child tax credit or when you or your wife receive a raise during the year.
2006-12-12 02:20:30 · answer #1 · answered by nova_queen_28 7 · 3⤊ 0⤋
If you are in school full time and your parents claim you and will get less than $5,000 then you will not owe any federal taxes for 2008. You could claim exempt for 2008. You just need to make sure that you change this for 2009 if your situation changes in 2009. $5,000 less the $5,450 standard deduction is less than zero - leaving you no taxable income. Any income over $5,450 would be taxed at 10%, so if you made $6,450, then $6,450 less $5,450 would be taxable income of $1,000 - thus you would owe $100 in taxes. Normally, if you are single, and your parents do not claim you, you can claim two exemptions and still be OK with taxes at the end of the year. Sometimes, you may have to pay a small amount at the end of the year. It all depends on what kind of deductions you have. If you are in school full time, then your parents can claim you until you are 24 years old - if you do not provide more than one half of your own support - including room, board, car, food, tuition, books, insurance.
2016-05-23 08:34:30 · answer #2 · answered by ? 4 · 0⤊ 0⤋
In order to answer this question properly, we'll need some more information:
Do you plan to take the standard deduction this year, or itemize deductions? If you plan to itemize, then you'll have to provide the projected amounts of the deductions. If you own a home, it makes sense to itemize, otherwise, you'll have to do the math to see.
2006-12-12 02:03:29 · answer #3 · answered by Anonymous · 0⤊ 0⤋