I will proclaim my complete lack of knowledge in how taxes are figured. So I'm wondering if this tracks with anyone since it doesn't with me. In the year 2006, I was single with no dependents. Therefore my W-4 was filled out as being not married with only 1 allowance (me). I taking in weekly net $735. I got married to a woman with a child back in July. Revised my W-4 to start January 1, 2007 to state I was married with 3 allowance (me, her, and her kid). Under the new W-4, I'm taking in $738. Now that's what doesn't track with me. I change my status to married with 3 allowances instead of 1 and my net only goes up $3. Does that make sense?
2007-01-19 04:06:11 · 4 answers · asked by scotty_b_1976 3 in Business & Finance ➔ Taxes ➔ United States
It sounds like your company's payroll department did not make the adjustment to your withholding yet. With your net going up $3, it sounds like they are still withholdiing you at Single-1 and the increase you are seeing is the annual change to the withholding tables to account for the cost of living adjustment.
2007-01-19 05:49:32 · answer #1 · answered by jseah114 6 · 0⤊ 0⤋
The thing to remember about employer tax withholding is that you can claim as many exemptions as you want and your employer withholds accordingly. The idea of withholding is to end up neither owing much on April 15 nor getting much back.
What you need to do in your case is a pro-forma tax return and see how much you owe in taxes as a single person and as a person with three exemptions. A quick and dirty pass would have your taxable income drop by the value of two additional exemptions ($2,000 if memory serves). If your top marginal tax bracket is 25% then you'll pay $500 less in taxes. If you're paid every two weeks then you should be withheld about $20 per pay period less ($500/26).
Go to your personnel department and get the tax tables and find out home many you have to claim to put another $20 in each paycheck. Then fill out a new W-4.
Lest any reader be tempted to run into the company and claim a dozen exemptions to pump up the paycheck remember this: While your company doesn't care the IRS does and if you're grossly under withheld you are going to get penalized: Pigs live, hogs get slaughtered.
2007-01-19 04:30:01 · answer #2 · answered by Flyboy 6 · 0⤊ 0⤋
The something don't sound right with the math. Are you claiming the kids as an allowance or are you claiming them at the end of the year?
2007-01-19 04:16:43 · answer #3 · answered by Ricky J. 6 · 0⤊ 0⤋
Check with your employer. I've calculated withhold with the tax tables and that doesn't make sense. Maybe their software is messed up.
2007-01-19 04:13:28 · answer #4 · answered by Dizney 5 · 0⤊ 0⤋