Hello,
I am having a little issue with my w4. for the past 3 years i have been owing money to uncle sam.
I file single (not married live alone) ... but i have gotten a raise every year and now my salary is at 43,250. i don't want to owe any money at the end of this year so should i change anything on my w4? to reflect my raises?
2007-06-19 06:54:11 · 4 answers · asked by KTM 450 1 in Business & Finance ➔ Taxes ➔ United States
I currently have single 1- for the past couple of years i have owed $1,300- and this year $600. i would rather break even and not get any money back or more money in my paycheck then have uncle same pocket it for free.
2007-06-19 08:26:57 · update #1
Claim 0 exceptions for the balance of the year. That should be enough to avoid writing a check April 15th. You could also add $50 or so to be deducted from each paycheck in advance.
2007-06-19 07:00:05 · answer #1 · answered by Ginger 6 · 0⤊ 1⤋
Actually, owing a bit at the end of the year is the BEST possible outcome. You get the largest possible paycheck during the year and are not making an interest free loan to the government.
Without knowing your entire situation it's not possible to say how much you should adjust your withholding allowances by. One quick way to break even at tax time is to divide the amount you had to pay with your 2006 return by the number of pay periods remaining in the year. Have your employer withhold that much extra from each paycheck and you should just about break even.
The withholding tables are indexed to the income tax rate brackets so you do NOT need to adjust the number of withholding allowances simply because your pay is increasing.
2007-06-19 07:06:04 · answer #2 · answered by Bostonian In MO 7 · 2⤊ 0⤋
bostonianinmo is right on! Interest-free loans to the IRS vacuum big time! Another thing to consider is the level of unearned income or other income you may have that has no withholding on it. When my spouse retired from the military, they did not do withholding and boy, did we get a surprise the end of the first year!
2007-06-19 07:14:37 · answer #3 · answered by saurus3118 5 · 0⤊ 0⤋
You shouldn't have to make changes because of your raises - that should happen automatically. But what do you have on your W-4? You don't say that in your question. If you have single-one, change it to single-zero.
2007-06-19 07:33:15 · answer #4 · answered by Judy 7 · 0⤊ 1⤋