Does anyone know how this works? If I have say...8 allowances on my W-2's (dependants)...
1) Does that mean the goverment takes out more or less taxes??
2) Does that mean I'll pay/receive refund come tax filing time?
2007-03-09 04:47:19 · 11 answers · asked by SF 1 in Business & Finance ➔ Taxes ➔ Other - Taxes
I meant W-4 form
2007-03-09 04:50:31 · update #1
More more allowances claimed on the W4 the less tax they take out,
You would get less of a refund and based on what your tax liablity is, could possibly owe
2007-03-09 04:50:56 · answer #1 · answered by Anonymous · 1⤊ 0⤋
The higher your number of dependent allowances on your W-4, the LESS taxes the govt takes.
Be careful with this so you dont overstate your dependents and end up owing alot at tax time Now if you want to all but guarantee a refund, then take fewer allowances than the worksheet says you can and you'll know that the taxes taken out each pay will cover your debt at filing time and then some for a bigger refund.
2007-03-09 04:53:25 · answer #2 · answered by answers999 6 · 0⤊ 0⤋
The more dependents you claim, the less taxes that are taken out, the more money you get back. Be careful, though: you don't want to claim more dependents than you actually have, or you'll owe money on your taxes at the end of the year (and it's not fun!).
If a single person with no dependents claims 1 dependent (himself) on his W-4, he'll usually get a refund. Go from there.
2007-03-09 18:16:06 · answer #3 · answered by Neil 2 · 0⤊ 0⤋
The higher the number of deductons, the less tax you have taken from in your check.
As for if you would have to pay or get a refund would depend on many things. If you have a very large family (say more than 4 children) a spouse, and a mortgage, you will possibly get a refund.
If however you have only 1 child and a spouse, even with a mortgage, you might still have to pay.
It certainly depends on income level etc.
My income (combined) is about $100,000 a year, I have 1 child and a mortgage of about $1800 a month. I claim Zero (highest withholding) as married, and my husband claimed married 1, and we got a $1800 refund this year.
You situation needs to be lookd at to determine the best deduction level.
2007-03-09 04:54:25 · answer #4 · answered by Jen 5 · 0⤊ 1⤋
The less exemptions you fill in on your w-4 , the more taxes they take out, the more you claim , the less they take out, just make sure you claim enough to cover your taxes or be prepared to pay. I personally claim exempt, they don't take any taxes out except soc.sec and medicaid, so I have more in my pocket, but only do this if you can pay it when the time comes or know you won't owe anything when you file. The IRS may also issue penalties if you have to owe too much, too many times. As a rule you may want to claim one less than you will claim on your taxes, to make sure they take enough out and will usually get a refund too.
2007-03-10 07:57:23 · answer #5 · answered by Alan M 1 · 0⤊ 0⤋
the higher the allowances the lower the tax amount. If you want the max taken out, claim "single 0" -- on a W-4 you can claim single even if you are married. It's the tax return that must be considered married.
2007-03-09 07:31:47 · answer #6 · answered by ? 4 · 0⤊ 0⤋
The more allowances you have the less taxes you pay. If you don't have as many dependents as you claim on your W-2, there is a possibility that you might have to pay at tax time. I don't know about itemized deductions that you might take, or even how much you make per year.
2007-03-09 04:51:28 · answer #7 · answered by flintgeneral 2 · 0⤊ 2⤋
That means they take less out of your paycheck each week. And unless you really do have 8 dependents, you will probably owe taxes when you file your return.
2007-03-09 12:19:11 · answer #8 · answered by crazydave 7 · 0⤊ 0⤋
Here is how this works.
the more dependents/deductions you have on your W2, the higher your salary must be before they will take income taxes out of your pay checks.
The higher that number is the less likely you will have to pay taxes. So the more dependents you have changes the amount of taxes you owe, or get back. Of course that depends on your salary.
The lower that number, the more money the government will take from each of your pay checks. But if you have a larger number of dependents, you will then get most of that money back.
Now if you have quite a few dependents you should also look at the Child Tax credit, and the Earned Income Credit. You can actually recieve money from the governement over and above what you paid in.
2007-03-09 04:53:11 · answer #9 · answered by Adorabilly 5 · 0⤊ 4⤋
The more exemptions you claim on your W-4 the LESS tax is withheld. If you claim more than you're entitled to you will end up owing at the end of the year.
2007-03-09 10:21:37 · answer #10 · answered by Bostonian In MO 7 · 0⤊ 0⤋