Can I claim exempt to federal tax withholding? I make about $50 a month, am living off of previous savings, and my parents are funding my education. I claimed it in 2006 because I was still dependent on them for most of the year. I moved into an apt in August. In 2005, I claimed "single" and got all of my withholding back.
I don't really understand what tax liability means if I am earning money but not much.
2007-01-30 10:14:55 · 2 answers · asked by retzy 4 in Business & Finance ➔ Taxes ➔ United States
Based on your information, it sounds like you owe no tax because the standard deduction of $5,150 and the personal exemption of $3,300 will wipe out all your taxable income anyway. Your previous savings generate interest that is taxable and so also are your earnings of $50/month, assuming they are not tax-exempt.
If you do file and your AGI is less than $8,450, you will not owe any tax and any tax that you have paid during the year will be refunded back to you.
2007-01-30 10:43:47 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Yes, but if you only make $50 a month, it doesn't matter what you claim. Even claiming Single and ZERO allowances (the highest withholding rate), they should not withhold anything at 4 times that income.
2007-01-30 11:53:47 · answer #2 · answered by STEVEN F 7 · 1⤊ 0⤋