My wife and I claimed Married - 1 on our taxes. If it wasn't for education credits, we would of owed quite a bit of money this year. We make about the same amount of money. Would we still owe if we claimed married -0, just not as much, or would we get a refund?
2007-03-05 09:21:25 · 4 answers · asked by MovieBuff 2 in Business & Finance ➔ Taxes ➔ United States
Together we make $70,000, we will probably be able to deduct our education credits which probably will add up to around $7,000, so how will that look on tax day for us? Anybody know?
2007-03-07 10:00:34 · update #1
I forgot to add that we both pretty much make equal amounts of money.
2007-03-07 10:01:02 · update #2
Simple breakdown of how exemptions work:
The more exemptions you claim the less taken from your paycheck each week. The IRS assumes if you have 8 exemptions you need all that money to feed your little rugrats.
The less exemptions you claim the more taken from each paycheck. This should help reduce tax liability. I can't say without looking at your finances to say if lowering your exemptions would get you a refund as opposed to owing but it would get your liability closer to zero.
The best thing is to not owe the government anything. Plus, you don't want to overpay just to get a refund because how much interest are you earning on your money that the government has? It's always best to make money work for you.
Ask your employer about changing your exemptions on your W-4 to zero. Also, if that won't lower your liability to zero, you can always request a percentage of your paycheck to be withheld, such as 15 or 20 percent, to ensure you meet your withholding requirement.
2007-03-05 09:33:44 · answer #1 · answered by Anonymous · 0⤊ 1⤋
Without knowing all of the numbers it's impossible to say.
It's not unusual for dual-earner couples to owe at tax time, especially if one earns significantly more than the other. This can happen even when both claim zero on their Forms W-4.
You should sit down together with your Forms W-4 and complete the worksheets on page 2 to account for any deductions and credits and the two incomes. If you don't and don't have any education credits or deductions for 2007, you could owe a significant amount of tax.
2007-03-05 17:31:33 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 1⤋
Try married 0 for a year and see how you come out. Without knowing how much you each make and how much you would have owed this year without the education credits, it's not possible to really answer your question.
2007-03-05 18:03:44 · answer #3 · answered by Judy 7 · 0⤊ 1⤋
depends what u are. Unless youre a liar of course, then its youre choice.
2007-03-05 17:29:41 · answer #4 · answered by SmOKE 3 · 0⤊ 3⤋