what does exemption mean?
2007-01-16 07:23:07 · 5 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
It means that you do not want any tax withheld from your paycheck.
If you earn, say, $100/week, your company may pay you $80, which is your "take home" pay. That $20 they "withheld" comprises federal and state taxes, and social security payments.
(If you claim exemption from withholding and still end up owing tax at the end of the year, you'll still have to pay it)
2007-01-16 07:29:50 · answer #1 · answered by Liza 6 · 0⤊ 0⤋
Ok on a W4 you do not claim exemptions, you get allowances. The withholding calculator will get you close enough to where you won't be due such a huge refund, or owe. $7200 is a lot of money IRS holds for you all year without interest to you. $7200 is a lot of money you are having to do without each payday. The worksheet states you qualify for 6 allowance not exemptions. The worksheet is correct. good luck....
2016-05-25 02:19:51 · answer #2 · answered by ? 4 · 0⤊ 0⤋
It means you are claiming under penalty of perjury that you either have diplomatic immunity or you did not have income enough to require you to pay taxes.If you fit the criterion, you in fact may be qualified to receive and earned income credit.
2007-01-16 07:29:55 · answer #3 · answered by Faerie loue 5 · 0⤊ 0⤋
It means you are not subject to income tax withholding.
2007-01-16 07:26:19 · answer #4 · answered by jseah114 6 · 2⤊ 0⤋
it means no money is taken out from your pay check, you need some taken out or otherwise you will end up with a bill next year in the possible thousands
2007-01-16 07:27:31 · answer #5 · answered by Juleette 6 · 0⤊ 0⤋