I am a single mother with a7 year old. Im really confused as to what I should claim on my W4. I need help.?

Question

I am not sure what to claim. People have told me to claim the max throughout the year and not let any taxes come out of my checks during the year. They say I will still get a big return. I want to make sure. I would rather have the big return at the end of the year.

I can claim head of household becuase of my daughter. But, I am not sure if I can get the child tax or the additional child tax credit. I cannot seem to figure out if I am eligible.

If I continue to work like I am until the end of the year, my gross income will be like $17529.60. (As close as I can tell) I would appreciate any help that anyone can give me.

Thanks so much.

Answer 1

As long as your daughter is under the age of 17, you would qualify for the child tax credit. As head of household, your standard deduction would be $7,550 (for 2006, 2007 would be a bit higher) and you would get an exemption for yourself and your daughter ($3,300 x 2 for 2006, 2007 would be a bit higher). This would mean that after deducting standard deduction and personal exemptions, your taxable income would be $3,380. Since this would put you in the 10% bracket, your tax would be approximately $338. The child tax credit would be limited to the lesser of your tax liability or $1,000, so the child tax credit would zero out your tax liability, so anything that you would have paid in through withholding would come back to you. Since your income would be below the earned income credit limit, you would also qualify for the earned income credit as well, which would be a refundable credit.

Therefore, for 2007, you could file exempt from federal withholding and you would still get money back (the EIC). You could also file exempt, and also file for the advanced earned income credit, which would increase your take home pay by giving you your earned income credit each paycheck, rather than requiring you to file for it at the end of the year when you file your tax return.

A reminder that the numbers above reflect 2006 tax brackets and deduction/exemption amounts. Since these numbers are indexed for inflation each year, the actual calculations you would get for 2007 would be lower.

Answer 2

I have done taxes for seven years for clients very much like you. With your income and dependents you will have a zero tax liability if you have zero deducted from your check. The calculation would be.... If the child lives with you and you claim the child as a dependent.... The child tax credit would be up to $1000 or zero out on taxes owed. In addition you will receive approximately $2500. in Earned Income Credit. This will be plus or minus a couple of hundred dollars.

Be careful with the state withholding. You will probably have some state tax liabillity. Depending on the state.

Hope this helps. If you are still confused you can email me at [e-mail]

Answer 3

Use a withholding calculator to figure out your excemptions for w4. Remember the smart tax move is to get '0' tax refund and own nothing to IRS. I know many people don't like this idea as all tax professionals sells their service promising big returns. But remember a big tax return is big loan (without interest!!) you gave to IRS. So it always smart on your side to keep the money on your side and even own little ( less than $1000 ) to IRS at the tax season.

Again take this advice only if you are good at managing your money.

You can use this calculator to figure out w4 excemptions.
http://findtaxservice.com/taxcalculator/tax-withholding-calculator.html

Answer 4

JUST A WORD OF ADVICE, YOU DON'T WANT TO CLAIM 9 ON YOUR W4 FOR MORE THAN 3 MONTHS. IF YOU CLAIM 9 FOR THE WHOLE YEAR, THAT AUTOMATICALLY THROWS A RED FLAG UP FOR THE IRS. PLUS IF YOU DON'T PAY ANY TAXES AT ALL, YOU WILL HAVE TO PAY IN. EVEN WITH THE EIC, YOU MIGHT BREAK EVEN. YOU CAN CLAIM 2, THERE WON'T BE MUCH TAKEN OUT FOR TAXES AND YOU SHOULD STILL GET QUITE A BIT BACK AT THE END OF THE YEAR.