How many exemptions should I claim on my taxes?

Question

Im 20 yrs old and a college student in RI. I work constantly when I am not in school to pay for tuition and my apartment. When I filed my taxes this year I owed over $1,000 between state and federal taxes. I was told because I didn't have enough taken out. I managed to not have to pay the entire amount by claiming some school expenses but it was a close call.I can't afford to owe next year. How many exemptions should I claim to avoid this? I currently claim 0 for both state and federal. Am I going to screw myself over in the end??

Answer 1

You can ask to have extra taken out of each pay - there's a line on the W-4 for that. Divide what you almost owed for 2006 by the number of pay periods, and ask to have that taken out.

As to allowances, if you're already claiming single zero, that's as low as it gets. If that's not what you're claiming now, change to single-zero.

If you have multiple jobs, you end up with weird withholding, since each job takes out like they're your only income, then at the end of the year they all get added together so you come up short. That might be what happened to you last year.

Good luck with your taxes ande with school.

Answer 2

If you're claiming zero and still owe taxes it's a virtual certainty that your parents are claiming you as a dependent. With that, you lose your personal exemption so your tax bill will be higher.

Divide the amount you owed on the Fed and State returns by the number of pay periods remaining in the year and ask your employer to withhold that much extra from each paycheck for the rest of the year. The reason that you need to do this is that when you claim zero exemptions your employer withholds the maximum amount of tax from your pay. Since that is not enough to cover your tax liability you need to have extra $$$ withheld from each paycheck.

Answer 3

Zero is a wise number; it means that they will withhold the maximum possible. If you are working a number of part time jobs you may be low on the bracket and still fall short in withholding. If you can figure out how much your total income will be for 2007, then figure out your tax due on same, then extropolate your withholding to see if it matches your tax. If you come up short you can ask that an extra five, ten or whatever be withheld from each paycheck so you come out even at the end of the year.

Answer 4

A couple of years ago I claimed 2 exemptions(my husband at the time was disabled with no taxable income)and at the end of the year wound up owing federal taxes, and skimmed by on state. The following year I had my employer to withhold an extra $10 on each per pay period, and that helped in that I didn*t owe, but got li back. My tax preparer told me that the best way to ensure that You don*t have to pay is to check your check stubs and if your federal withholdings isn*t at least 10% of your gross pay you aren*t being cut enough in taxes. Have employer withhold an extra amt. of dollars each pay period. You may miss it at first, but I*d rather change my spending limit now than have to pay at the end of the year.