I'm so confused. When I start a job (I live in CT) I always been told to claim 1. Then when tax season comes around, I don't get crap back. Just need some advice, thank you!
PS: I'm 23 married and it's not like we make a ton of money a year. We make about 45year combined.
2007-02-28 07:36:02 · 6 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
You are apparently having just the right amount of taxes withheld from both you and your spouses wages. A refund is paying back an overpayment in taxes.
The goal should be that you do not owe any taxes when you file your return, and the goverment doesn't owe you any overpayment
2007-02-28 07:42:53 · answer #1 · answered by Anonymous · 3⤊ 0⤋
Well, you're not getting much back but you're not paying either, right?? That means you're walking away at the end of the year even-up with Uncle Sam. That's where you really WANT to be!
You could cut your withholding exemptions and get a larger refund but you'd have less money in each paycheck throughout the year. If you're OK with having smaller paychecks all year, go for it and drop your withholding exemption to 0. It's your choice, though not a very good one IMHO.
I hate letting the gummint hold MY money all year interest free, so I figure my withholdings so I have to pay a couple hundred $$$ each year. Not underpaid enough to trigger any penalties or interest for underpayment and as much $$$ in my paycheck every payday as possible.
2007-02-28 18:42:55 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
If you claim the right amount, you won't get much of a refund if any. A refund is only getting back your own money that you overpaid in the first place. If your goal is a big refund, then claim zero. Heck, ask them to take out an extra $500 a month from each of you, then you'd get a $12,000 refund.
Doesn't sound like a good idea? I didn't think so.
2007-02-28 20:03:41 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
If you dont get crap back, but don't owe either, you're claming exactly correct.
The goal is NOT to get a return. The goal is to break even. If you claim lower exemptions (say, a 0) it just menas your paychecks will go down a bit becuase you're giving more money to the government-- which you'd then get back later.
If you're getting large sums back, it means you're giving the government a free loan of your money.
If you both claim 2, you could end up owing money at the end of the year.
2007-02-28 15:46:24 · answer #4 · answered by Anonymous · 1⤊ 0⤋
Using the government as a savings account is throwing money away.
They do not pay you interest, and you can't get the money if you really need it.
Instead of sending an extra $25-50 dollars a week to the IRS, just open a savings account and everytime you cash your payroll check put money in the account. At least that way you will earn a little bit of interest.
2007-02-28 15:42:52 · answer #5 · answered by Gem 7 · 0⤊ 0⤋
When you file are you filing with 2 dependents? (you and your wife?)
The ideal situation is where you don't get money back, but don't owe either (theoretically you're making more money because you're keeping the money in your pocket and making interest) - the best way to get this scenario is to have the spouse who brings in more income to claim 2 and the spouse with the smaller income to claim 0 - but it sounds like you're in this situation already.
If you WANT a tax refund then claim 0 on your W4 and they will withhold more tax during the year.
2007-02-28 15:40:12 · answer #6 · answered by AriesJWR 4 · 0⤊ 4⤋