i have a question about allowances on my w-4?

Question

i am 24, living with my parents, and working a part time job. i make like $10,000 gross a year. i accidentally put 2 allowances on my w4 and i wonder if i will have to pay back alot. i wish i could keep it at 2 if i can without having to owe, because i don't like getting raped on taxes. i'd rather have the money now, than get it refunded later. my parents claim me on their taxes.

Answer 1

Your parents cannot claim you as a dependent unless you are a full time student, and then only until age 24 maximum, so I would certainly have them look into that.

2 does not seem to be so high as to cause you a major shortage. If you are really concerned, calculate your taxes using 1040ez (use 2006 forms), and see where you fall. For your tax paid, just take one check, and multiply the amount by the number of checks that you will be receiving.

Answer 2

You're probably going to owe at least a little this year. And you should cut back your allowances on your W-4 to just claim 1, or even zero, unless you have significant adjustments like lots of student loan interest.

And your parents can't claim you on their taxes if you turned 24 in 2006, even if you were a full-time student for some part of at least 5 months of 2006. If you weren't a full-time student for some part of at least 5 months of the year, then they can't claim you for 2006 in any case. You're too old to be claimed as a qualifying child, and make too much money to be claimed as a qualifying relative, and those are the only two kinds of dependents there are. Let them know this - they need to amend their return dropping the claim to you as a dependent. If you just turned 24 in 2007, and were a full-time student last year, then they can probably still claim you for 2006, but not for this year or the future. It doesn't matter if you live with them and they support you - they still can't claim you. They can read the rules in IRS Publication 17, chapter 3.