What is best to file 0 or 1 when they take money out of your paycheck?

Question

I am claiming 0 right now and they take a lot of money out. I have never owed when claiming this and get back about $1,000 when I do my taxes. Is it smart to switch to 1 so they take less out? Of course I want the best way to get me more money.

Answer 1

If you typically get about $1,000 back when doing your taxes, just go to your payroll dept and ask how much more you would getting per pay period with changing to 1. Then just figure out how much less over the course of a year you'll be paying for federal withholding. By changing from 0 to 1 you'll have less federal withholding taken out each pay period, but you want to make sure that you don't end up owing. To come to about a break even point, you would have to have $19.23 less taken out of your paycheck each week, or $38.46 every 2 weeks if paid bi-weekly. Overall, you're not going to actually end up with more money, you're just getting the $1,000 refund back sooner.

Answer 2

I would switch to 1 or even 2 personally.

At 1, you'll get a smaller refund but bigger paychecks during the year.

If you claim 2, you'll get even more money in your paycheck and will just about break even at tax time. You might get a small refund or have a small tax bill, usually within about $50 either way of even money.

I always shoot for a small bill at tax time - something under $1,000. If you owe less than $1,000 there are no penalties or interest for underpayment. If you've been setting some $$$ away in savings you won't have any problem with the tax bill AND you'll have the benefit of any interest earned on the $$$ throughout the year. I HATE making interest-free loans to the government!

Answer 3

If you are single, with no dependents the best way to file would be to claim 1. You won't get as big of a refund at the end of the year, but your paycheck will be bigger. If you have a big refund at the end of the year, that just means that you let the government have a 0% loan on your money for 1 year.

Answer 4

The reality of it is this.

If you want more money to live on through out the year,( ie more to put in savings and earn interest on), and be able to keep more of your money file 1.

If you don't mind the government taking more of your money than they should and not being able to earn interest on it the whole year and be able to have a big spending spree that is reliant on filing your taxes and waiting for the return file 0.

More likely than not even if you file 1 you'll still get a small refund at the end of the year. Ultimately as stated before it is your choice.

Answer 5

in case you get greater in each paycheck, then via definition you get much less on the tip of the three hundred and sixty 5 days. the whole is the comparable - in case you get a huge refund, that purely potential which you paid in better than you mandatory to, and lent the funds interest-loose on your Uncle Sam in the time of the three hundred and sixty 5 days. in case you have one new child you will desire to be happy with claiming 2 on your W-4, or perhaps 3 in the adventure that your better half does not paintings and you report a joint return. you will likely nonetheless get some thing decrease back if the youngster is under 17 as a results of youngster tax credit.

Answer 6

You have all the facts. There is no "best way". Most experts are inclined to suggest giving the IRS as little as needed. The IRS doesn't pay interest on the extra cash they take when you claim "0"......

But the real answer is... you make the choice that's best for you!

Answer 7

If you're getting back $1000, you'd be safe to switch to filing one allowance on your W-4, maybe even 2.

Answer 8

you should file 0 cause they will take more out and you will get more back at the end of the year.

Answer 9

Change to 1(claim yourself), you will get more money in your check.

Answer 10

In the long view, stay with zero. You don't have to scramble for cash, at tax time.