Married, three kids, homeowner, Charitable giver
2007-06-29 04:16:29 · 6 answers · asked by Christopher T 1 in Business & Finance ➔ Taxes ➔ United States
Married, spouse works also, homeowner, 3 kids, charitable giver
2007-06-30 23:05:36 · update #1
What you are talking about is called Advance Earned Income Credit (AEIC). Go to your Human Resources or Accounting department and they'll help you calculate it.
But remember: If for some reason during tax time, you discover that the EIC you got in advance is higher than what the IRS actually dishes out, then you'll owe them the difference.
Your allowances are calculated based on your filing status (in your case, Married Filing Jointly), the number of dependants (3) and personal exemptions (5). Now, it would be ludicrous to put 5 allowances coz that means teh IRS will be barely taking anything out of your paycheck. This means that if you & your spouse are both employed and making at least $25,000 then your chances of owing the federal government increases exponentially.
I would recommend 3 allowances: they'll still be taking some money from your paycheck but not so much that it'll hurt you and it decreases your chances of owing by 50%-60%.
Go to your accountant armed with this information and you'll be so proud.
2007-06-29 04:41:59 · answer #1 · answered by bluepassion_life 2 · 0⤊ 2⤋
If your spouse doesn't work, you can claim Married and 5 withholding allowances and get a moderate refund. You could also claim 6 and be just about even with the IRS at tax time.
Depending upon the value of your itemized deductions you may be able to claim more withholding allowances. Use the worksheet on page 2 of Form W-4 to figure the total number that you should claim.
2007-06-29 04:22:37 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
http://www.irs.gov/pub/irs-pdf/p15.pdf
Read this publication. Here is my summary.
You can claim 1 exemption for every $3400 in deductions that you plan on having. This includes deductions that are taken out pre-tax like 401(k) contributions. Does your wife work? If so, then you need to account for her income as well.
Look at last years tax return as a guide for your total deductions. Prepare a mock tax return for the year to estimate this years total liability.
Since half the year has passed, When you file your new W-4, you can double the number of exemptions for the rest of the year. Be sure to make yourself a note to change your W-4 in early to mid-December so you don't get burned in 2008 for not having enough taxes taken out.
2007-06-30 01:46:05 · answer #3 · answered by Steve 6 · 0⤊ 0⤋
The IRS has a withholding calculator better than the information they provide on the W-4 form. Go to www.irs.gov/indiduals/article - the title of the article is IRS Withholding Calculator. You provide anonymous information used only for purposes of the calculation. It will not be shared, stored or used in any other way. It will be discarded when you exit the program.
2007-07-06 04:52:57 · answer #4 · answered by Malcolm K 2 · 0⤊ 0⤋
Not sure about allowances. If you claim less you get more in check and less at the end of year. The reverse is also true.
2007-06-29 04:22:57 · answer #5 · answered by nottroyswife 3 · 0⤊ 2⤋
go to www.givemeliberty.org has information (free) how to keep all your money .
2007-07-04 11:41:49 · answer #6 · answered by DRK1946 2 · 0⤊ 0⤋