What are my deductions on my w-4 form for a summer internship?

Question

I'm just getting into the business world so I don't know much about taxes or filing out w-4 forms properly. I'm 19, full time student at the university of colorado and i'm home for the summer working as an intern. I receive hourly pay of $13.45 with a monthly stipend. My parents are still fully supporting me and I work just to get a little extra money. I got my first pay check today and my father pointed out that I must have filled out my w-4 form incorrectly because I was being taxed federal income taxes, SS, federal medicare, CA income taxes, and CA Vol. Disability. (and well thats a pretty big lump of money if you're not making much) I figured out that I won't get any of that money back until I file my tax returns for 07 correct? But when I correct the w-4 what should I put down???

Answer 1

If you expect to earn less than $8,450 and paid no taxes last year then mark "exempt" on your W4. You will still pay all the other taxes but no income tax.

Answer 2

You'll pay ss, medicare in any case, and probably CA income taxes and CA disability . And if you're making the $13.45 an hour for 40 hours, 13 weeks, and are a dependent of your parents, you'll owe some federal income tax for the year also, so if you're a dependent, and it sounds like you are, you are NOT eligible to file exempt on your W-4, and could be subject to various penalties and fines if you did.

You probably filled out your W-4 as single, zero allowances - that would be correct. Unless you put something on the line that says "additional amount, if any, that you want withheld from each paycheck", leave it alone. Maybe your dad isn't realizing how much 13.45 an hour adds up to over a summer, especially if you also get some kind of monthly stipend.

You don't get the ss, medicare, or CA disability withholding back. Early next year when you file your tax returns, if you overpaid income taxes to CA or to the feds, you'd get the overpayment back as a refund. The way withholding works is that they calculate withholding for each paycheck as if you were making that much every pay period all year. Since you're only working for the summer, there probably will be some overpayment, at least on the federal level, so some refund.

Answer 3

If your continue to be a student for some part of at least 5 months this year your parents will continue to claim you, and you will file as a dependent which means you can not claim your own personal exemption ($3,400 in 2007). As a dependent your standard deduction would be your earned income plus $300, not to exceed $5,350.

So, in English this means if you are making less than $5,350, and you had no tax liability (taxable income) in 2006, you can file a W-4 claiming "Exempt" from with holding this year.

They will not take out Federal with holding but will continue to take FICA and Medicare Tax.

Answer 4

Your parents are probably still claiming you as a dependent. You may have a tax liability this year depending on the amount of your summer earnings. The W-4 has nothing to do with SS, medicare, and CA SDI. It only impacts the amount of federal and state income tax withheld.

Answer 5

If you did not owe any taxes last year (liability owed, not whether you go a refund or owed extra) and expect to owe no taxes this year, you can file a W-4 claiming exempt. That will eliminate the Federal and CA withholding. You will always pay social security, medicare, and CA SDI taxes.

Answer 6

Put single/zero allowances. If you're absolutely sure that your total income for the year will be under $5700, you can put exempt - then they won't take out for federal income tax, you won't owe any.. And the HR people can't guarantee you no penalty - if the internship is your only income for the year, you'd be unlikely to make enough to owe a penalty,