I was wondering, what's the difference (or what's better)... Claiming "1" or "0" for allowances?
2007-02-13 01:55:16 · 9 answers · asked by zO. 1 in Business & Finance ➔ Taxes ➔ United States
Claiming 0 versus 1 will mean you have more withholding taken out, and less net take home pay. I personally don't see the point why anyone would want to have more withholding taken out than they are required to have. If you are getting a $5,000 or $10,000 refund every year, that is just overkill. Some may look at it as a "forced" savings plan, but you are basically giving the government an interest free loan for one year. And you can't really even say that it is a savings program, since most likely once you receive your refund, you will spend it on bills, or whatever. If you were getting a $6,000 refund, and you reduced your withholding so that you were paying in just what you owed, then you would increase your monthly take home pay by $500 a month. Even if you were to take that $500 a month and stick it in the bank, you would at least get 0.5% interest on the money, which is still better than the 0% interest the government is paying you.
2007-02-13 01:59:09 · answer #1 · answered by jseah114 6 · 2⤊ 0⤋
No way to say without knowing your marital status and family composition. IF you have 3 kids all under age 17 as of the end of the year and your spouse does not work, you can safely claim 12 allowances and just about break even. If you are single with no dependents and claim the standard deduction, claiming 12 allowances would generally leave you with a pretty big tax bill at the end of the year. Just follow the instructions on the Form W-4. They are very explicit. Edit: Well, if you are single and have no dependents then 2 will leave you close to the break-even point. You might get a tiny refund or have a small bill to pay at filing time -- generally within $100 either way. If you claim 3 however you WILL have a bill of several hundred to pay when you file.
2016-05-24 05:09:32 · answer #2 · answered by Anonymous · 0⤊ 0⤋
If you claim 1 they will take less taxes out of your check.
If you cliaim 2 they will take more taxes out of your check.
The benefit of claiming 2 is that you have a higher probability of getting a refund, or not having to pay so much out at the end of the year.
You cannot choose 1 if you parents plan on claiming you at the end of the year. Check with them. But it really doesn't matter, if things change by the time you are ready to file taxes.
If you do not plan to file a tax return, choose 1.
It's really not that big of a deal, but I would recommend that if you work as a waitress or bar tender that you choose zero, just to be sure that the most money you can pay in toward your taxable tips, is taken out. It is a little complex, but that is the basic idea.
Otherwise, you are fine. Choose one or the other. Depending on how much you want taken out. Good Luck.
2007-02-13 03:18:00 · answer #3 · answered by Chris 3 · 0⤊ 1⤋
The difference is, how much $ the gov will take out. 0 = more $ taken out. 1 = less $. 2 = even less $. 99 = no money AND you get a call from an IRS agent.
I used to write 4 even tho I was single. Having a house as a deduction justified it. Friends put less than they should so they get $ back in the spring, and they treat it like a forced savings account.
2007-02-13 02:03:39 · answer #4 · answered by Meg W 5 · 0⤊ 0⤋
It is just a matter if you want to pay in more taxes now or later, or if you would prefer to pay in more and get money back later. If you claim 0 single you should have money coming back at the end of the year. I prefer this to taking a chance of having to pay in latter. Some prefer to have their money right away so they claim 1, but if they don't pay in enough during the year they will have to pay in at the end.
2007-02-13 02:04:13 · answer #5 · answered by JAN 7 · 0⤊ 0⤋
The more allowances you claim the less taxes they withhold from your pay. If you claim too many you will owe taxes to the IRS at the end of the year. Which is better depends on your situation. Are you married or single? If married what is your spouse's salary and what is she claiming. Do you have kids? What is your salary, or better what tax bracket will you fall into?
Its not a simple question.
2007-02-13 01:59:44 · answer #6 · answered by meathookcook 6 · 0⤊ 0⤋
I agree with Jseah. If you're single and don't have any dependants, one should be fine. You may still get a refund (I've always filed 1, and have always gotten a refund, except for one year from the State, and the Federal balanced it out anyway).
If it's the "surprise money" you like, then just transfer a couple hundred dollars from every paycheck into a savings account the minute you get your direct deposit, or have it done automatically. Don't ever touch that money, and pretend it doesn't exist except for the purpose you had in mind for it.
2007-02-13 02:43:05 · answer #7 · answered by sarcastro1976 5 · 0⤊ 0⤋
You should claim "0". That means that they take more tax out of your check but you get a bigger refund at the end of the year. Claiming "1" can be risky because sometimes it maked you owe money at the end.
2007-02-13 01:59:01 · answer #8 · answered by Urban Informer 3 · 1⤊ 1⤋
depends on how much u want at the end of the year....i always claim 0 just to play it safe so i know i won't owe on taxes....but it also means less on your paycheck
2007-02-13 02:04:14 · answer #9 · answered by Anonymous · 0⤊ 0⤋