How to decide how many to claim on w4?

Question

I am getting back a large refund this year and I would like to see a little bit more on my weekly check and get a smaller return next year. The w4 form suggested I claimed 6 but that just sounds too high...I don't want any risk of having to pay next year. I claim 1 now and am getting back $5000 any suggestions on how many to claim to get back around $2500 next year?

Answer 1

Go to
www.irs.gov
In the bottom left corner there is a link called online tools, click that link.

On that page, the second link is called IRS Withholding Calculator.

This tool will help you accurately determine your withholding exemptions.

Ideally, you do not want the government holding ANY of your money all year, as they don't pay you any interest to use your money all year. But I have used that calculator several times, and gotten back more on my paychecks each period, without owing taxes at the end of the year.

I will try to include a direct link to the page you need, but yahoo may cut it off.

Answer 2

The IRS has an online calculator you can use. If you want to know the exact amoutn, have your payroll manager plu in differnet exemptions to hispayroll software (this is assuming you work for someone who is large enough to have this on site). Otherwise, just start with 6 and then see what your next paycheck looks like. If you don't like it, file a new W4. But why on earth do you want to make an interest-free loan of even $2500 to the Treasury???? Adjust your W4 so you get as small a refund as possible and put the additional amount you receive into your savings account.

Answer 3

If you properly completed Form W4, that number should be correct and will normally result in a small refund and the largest possible paycheck. If you're not comfortable with that, split the difference and claim 3 or 4 withholding exemptions.

Answer 4

How many are you legally entitled to claim? 5-6 or more? claim one less and see what that does for a couple of paychecks. If that isn't enough, you can always change your W-4 to claim one less or one more. But don't make too many changes. This sometimes triggers a response you don't want.