Tax Witholding?

Question

I am a single independent female. Does anyone have any insight as to what type of tax withholding I should claim (i.e. 0 or 1)? I really don't understand the difference between the two. Any information or clarification really would help. Thanks!

Answer 1

If you claim 0 they take more out and you have a better chance of getting a return after the Gov holds your cash.

If you claim 1, they take out less money, but increases
the chance you'll have to write them a check on April 15

Answer 2

I just answered a similiar question for another person.
Below is a copy-paste of my reply read it all because it should interest you:
You don't need a 'tax professional.'
What those kind of people don't tell you is, what they charge you for, IRS will do the same or better for free.
I would say that with the verification you have, you can deduct that from your income taxes but to be sure, go to the nearest Social Security office. There will be one someplace as close as in your city or at least no further than a 45 minute drive away.
Take all of your tax information and I'd almost bet they'll find other deductions you can make.
They're not there to 'screw' you, they are really there to help.
They have agents to assist taxpayers with questions about taxes and they are 'USER FRIENDLY,' nothing like the horrible jokes and wild stories you hear about them.
While you're there, the agent will very probably show you ways to save when making out you taxes. I've never met a bad IRS agent.
The first time I went they found a $350 overpayment.
If you call and make an appointment, you won't need to wait in line.
I've been thankful for several years that I went to them so long ago. I was overpaying and they got a refund check mailed to me

Answer 3

Here's my suggestion. Don't give the tax man any more money than you need to and certainly don't give him extra money before hand. With that rule in mind here's what you do:

1. Complete a W2 today requesting a Single Status with 1 dependent.
2. In August review a current paycheck stub and determine the Year to Date Taxes and Earnings.
3. Divide the numbers determine in step 2 by the number of paychecks to determine your average pay and tax withholding.
4. Multiply the numbers in step 3 by the remaining number of paychecks in the year and add that to the numbers from Step 2. This will give you an estimated amount for this year's pay and withholding.
5. Do a quick 'income tax' calculation based on the results of Step 2 through 4. You should be able to determine if you will owe taxes at the end of the year or will receive a tax refund.
6. If you will owe taxes then divide the amount you will owe by the number of pay periods left. Fill out another W2 with everything the same except that you will fill out the space for 'additional withholding' with the calculated extra amount.
7. If you will get a refund, then divide the amount of the refund by the remaining payperiods to determine how much you can reduce the tax withholdings by each pay period. Fill out another W2 and up the number of dependents so that less taxes will be withheld per payperiod.

Using this process you will have an end of year tax liability of almost $0. This allows you to keep most of your money to be used and invested.

Some people use the IRS as a 'savings account' and look for that big return each year. However, this a huge waste of money as that money isn't working for you (ie savings, pay down loans or credit cards, etc.) and you get nothing for your hard work.

You can manipulate the W2 on a more frequent basis but I suggest that you start out simple as I've outlined and get more creative as you see how the 'system' works.

Good luck and I hope this helps!

Answer 4

As for your paycheck, I have always claimed 1 less, so for you it would be 0. Then when it comes time to do your taxes claim 1.

Answer 5

I have always gone with the claiming one less than needed. That way you will usually not have to pay anything at the end of the year (or pay very little), it is surprising how fast interest and dividends can mount up and add to your taxes.