W-2: Single, Married? Pros, cons, suggestions appreciated.?

Question

Some have told me to keep my W-2 as is, 0 deductions, more withheld each paycheck. I was married in Sept. 06. What would be reasons to change to married? Or stay as is? I did get a nice tax refund this year. What do you do?

Answer 1

The form you want is a W4, not a W2. You got a refund because you paid too much to the IRS in the year - they are giving you back the money without any interest, and you lost the benefit of having that money all year. Better to adjust the W4 and get closer to your actual tax liability.

The W4 adjusts your withholdings from your paycheck. It has a worksheet on it on page one, and another on page 2 if your spouse works, you have two jobs, or you itemize your deductions (eg. you have mortgage interest and real estate taxes.)

The safe answer is to fill out the W4 per the instructions and have the right amount withheld all year. It has a small refund built into it, so if you have no other income apart from employment income, and your spouse does not work, you should end up very close to your tax liability at the end of the year. If your spouse works you need to fill both of your W4s out together, or else you will probably owe at the end of the year.

There is a penalty for not withholding enough, but if you fill out the W4 correctly, you will not fall into this penalty unless you have significant non-employment income.

Despite what people think, getting a refund is a bad thing. Someone else gets your money all year and gives it back to you with no interest. Its by far a better idea to get the withholdings right in the first place.

Answer 2

If you were already married in 2006, so you filed as married in 2006, got a refund, and nothing much has changed, then leave it alone or else change to decrease the amount taken out. Changing to married would mean that less will be taken out of each check, and you'll get less as a refund - your refund is just the amount that you overpaid during the year. You either get the money in each paycheck or in a refund check - it's the same money, and is your money.

Answer 3

Your W-2 is simply put, a way to adjust the with holdings each pay period, so that enough taxes are taken out. If you choose to have the most take out and really want the biggest refund, then leave it as single claiming zero. But most people would rather not give the government all that money to use for six to nine months, and not give any interest back. The worst thing to do is to have not enough with held, and owe a penalty for under paying you with holding. The whole concept is to land as close to the actual tax owed mark as possible, with out paying too much when you file your tax return. One rule of thumb is that for each added exemption you claim, about ten dollars per pay period is with held.

Answer 4

No you are not able to dossier your tax go back as unmarried, even though leaving your W-four that method is not a drawback. If you have been married as of 12/31/07, your offerings are a joint go back otherwise married submitting individually. A joint go back will most of the time shop the 2 of you taxes total over your most effective different authorized alternative, submitting as married submitting individually.