Id like to know on the w4 forms what is the outcome if you put exempt. I currently own a rental property and is in the process of acquiring two more. I am employed full time and the reason why I wanna put exempt is because I think Im paying more on taxes as employee and also on the property taxes. What should I do?
2006-12-17 10:57:07 · 3 answers · asked by oliver s 2 in Business & Finance ➔ Taxes ➔ United States
Read the instructions on the W-4. You are only allowed to claim exempt if you don't expect to owe any taxes for the year. The taxes on your rental property have nothing to do with your taxes as an employee, except that when you file your return, all of your income from both sources is added together to figure your total tax. Property taxes are separate from income taxes, except that you can take a deduction of the property taxes when you do your income tax return.
You should file your W-4 accurately as defined in the instructions, to avoid a large tax bill in April, along with possible penalties and interest.
2006-12-17 11:49:01 · answer #1 · answered by Judy 7 · 1⤊ 0⤋
W-4 has nothing to do with property taxes. Do not put exempt at all unless low income which you are clearly not. Do take extra deductions for the houses if you have mortgages due to the extra interest you are paying. If single 4 deductions about right likely if you have mortgages.
2006-12-18 01:46:52 · answer #2 · answered by vegas_iwish 5 · 0⤊ 0⤋
If you claim on your W-4 that you are exempt, yet wind up paying taxes, you will be subject to heavy fines. You can claim one or two more deductions on your W-4 without a problem, but "married and nine" is no longer acceptable practice.
2006-12-17 12:52:18 · answer #3 · answered by texascajun82 2 · 1⤊ 0⤋