Is it better to have 0 or 1 exemptions on your W2's when you are married?

Question

My husband and I were married in May 2005. When I changed my status at work on my W2's, they changed my expemption from 0 to 1. I had less taxes withheld on each paycheck. I did not want 1 exemption, I wanted to keep 0. Can I change my exemption back to 0? We also have a rental property. Do I have to claim the whole rent check each month or just the amount left over after we paid the mortgage on the rental property?

Answer 1

You should be able to continue to claim 0 exemptions if you want. Ask your employer for a W-4, complete the form requesting 0 exemptions (and, if you want, to withhold at the higher, single rate), and then return the form to the personnel department.

Your rental will be taxed on its income after expenses. One of the expenses is the mortgage interest (NOT the entire mortgage payment).

Answer 2

Changing your W-4 was the right thing to do to fix the problem. You don't say how many allowances you had before, so no way to tell if zero is good, If you had zero before, you might even have to have some extra taken out, using line 6, to really come out even, but changing your status will bring you much closer. Exemptions are an amount of your pay that you don't expect to be subject to tax. In your case, 0 for federal is good. To get money back, you'd have to have more taken out than you actually owe. If you had an extra $50 a week taken out over what you owe, you'd get that extra 50*52 or $2600 refunded. It's the same amount of money, the only thing that changes is when you get it, in your paycheck or in your refund.

Answer 3

You can change your exemptions anytime you like, there are no restrictions on that however, in order to get money back at the end of the year you should claim 0 exemptions on your paycheck and then at the end of the year when you file you claim 1. As far as the rental property is concerned I believe it is only the overage but you might want to check with your tax person on that...

Answer 4

You can change your withholding with your employer at any time. Just file a new W4 with them.

On the rental property, you must file Schedule E. You claim the entire rents received. You can take deductions for mortgage interest, property taxes, repairs and maintenance, utilities, property management fees, etc.

You can also take a deduction for depreciation on the value of the inprovements on the property but not on the land itself so you'll need to separate the cost of the land from the cost of the building(s).

Answer 5

You can change your W4 anytime you want, talk to your employers payroll dept.

For tax purposes the only thing you report for your rental property is profit. All rental specific expenses count against profit. The basic goal is to try and keep the profit to expense ratio that same - show no profit, then you don't pay income tax on the rental.

Answer 6

if your expecting a larger refund it is better to claim one exemtion.although if not then you should claim zero exemption and have your husband change his exemtions.you must claim the whole rent check and then claim all your expenses against the rental property.

Answer 7

There is another status, Married but withholding at the Higher Single rate.
For a good out look of your withholding, go to www.irs.gov, individual, and withholding calculator. Follow it to the end and it will help you understand.

good luck & blessing

Answer 8

change your A4

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