I'm a single male so you knw I'm getting raped on the taxes. Like 22% 27% of my money is taken out of my check

Question

I claim 1 on my taxes. But my friend told me to claim more like 2 or 3 then simply change it at the end of the year. This way I get more of the money I earn. I've also heard that claiming two is legal because a single person can claim 1 for being single and 2 because no one else can claim me. Sounds stupid to me but can tax experts let me know. I just want more of my money. Any feedback is appreciated.

Answer 1

You can claim anything you like on your W-4, but if your employer does not withhold enough federal income taxes from each check, YOU will pay the penalties and interest to the IRS when you file your taxes next year. The ideal situation is to have as little a refund or as little to pay as possible when you file your income tax return.

Answer 2

If you claim 2 now so as to get less withholding tax deducted, then when it comes to tax time you'll have to pay the government extra money, because you will owe them the tax you should have paid throughout the year. If you just go along with the single person tax now, chances are you'll get a nice refund at tax time.

I think you'll find that the government doesn't appreciate false information being used on taxation declarations, and you could be fined or worse.

Answer 3

Claiming a higher number on your W-4 isn't going to change your total taxes, only when you pay it. If you have less taken out each pay period, you'd either owe when you file your tax return (plus possible penalties for underwithholding depending on how much you owe) or would get less of a refund.

The "1" IS because no one can claim you - if they could, you should claim zero. But if you only have one job, you might be able to claim 2 and come out somewhere close to even at the end of the year.

Answer 4

If you claim more deductions, then your employer takes less out of each paycheck for taxes. When you file your taxes you may end up owing a lot of money to the gov though, instead of getting a refund. Your choice.

Answer 5

If you want to break even at tax time, claim 1 exemption for every $3400 in deductions that you plan on having. I have no idea if you itemize your deductions or not. Assuming that you don't itemize, if you claim 2 exemptions, you will have a small refund, if you claim 3, you will owe.

Answer 6

You may get ahead financially if you invest the difference and earn a nice return throughout the year. Keep in mind that your employer pays half, i.e. 7.65%, of your FICA (social security and medicare) taxes. If you underpay the FICA tax you may need to pay the employer's portion, too. I would recommend that you pay what you owe, probably get a refund at tax time and try to earn a higher income (you'll be in a higher tax bracket, which applies only to the money above a certain amount, but you'll have more money to play with, too).