When filing tax status what is the difference between exempt and non-exempt and how do you know what you are?

Question

You have to choose if you are exempt or non-exempt for an employer. What are the specifics and does anyone know a tax/investment for beginners website?

Answer 1

I think you are confusing "claiming exempt" on the W-4 with exempt or non-exempt payroll. Exempt payroll means exempt from FLSA regulations, a salaried employee. Non-exempt means you are covered under FLSA and are entitled to overtime for hours worked over 40.

Answer 2

I was told by a smart *** at the IRS that they put exemptions there so people can choose too many & have to we tax. I've been supposedly claiming too many exemptions since 2004 & have to repay thousands of dollars. The interest & penalty is nothing to brag about either.
If you're unsure just claim 1 exemption & if you're a student, over 65, or blind u qualify for another exemption. If u can afford more tax taken out claim no exemptions; then u have to give u more pack when u file. Hopefully this helps.

Answer 3

You may claim EXEMPT from withholding ONLY if you had $0 tax liability for the previous year AND reasonably expect to have $0 liability for the current year.

FYI, if you are a single taxpayer working full time making minimum wage, you make too much money to claim EXEMPT. The maximum income amount for 2007 to have $0 tax liability for a single taxpayer under age 65 is $8,750.