I'm 19 and am working part-time starting this week. I will make about $161.25 per week, and if I continue to work every week until the end of 2007, I'll make about $4,677 if I overestimate to be safe. This is also my first job, and I'll be a full-time student come Fall. I have no summer school this summer. I want to know if I can check the exempt from tax withholding box, or whether to put 0 or 1 in personal allowances. I've been reading a lot of answers from this site about this, but I'm still confused to it all. I guess I have to start somewhere.
2007-07-01 15:06:24 · 6 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Also, I browsed the irs.gov site, but it didn't help, at least I don't know where to look.
2007-07-01 15:07:36 · update #1
Congratulations on your first job!
For the W-4, from the sound of it you will probably be a dependent on your parent's return next year (if you're living with them, a full time student under age 24 and they're providing over half of your support)? If that is the case, you can make up to $5,150 (that amount will probably edge up a little for 2007 taxes) before you owe any tax. If you think there is any chance you will make over that amount, then yes, you should have some withholding taken.
If you are a dependent and you expect to make under $5,150 then you most likely will not have any tax due and filing exempt on the W-4 would not hurt you. In order to file exempt you have to have had no tax liability in the previous year (and if you were not working this is probably the case) and expect to have no tax liability in the current year (again if under $5,150 then probably the case).
The exception to this is if you have large unearned income amounts during the tax year. Unearned income is considered things like interest and dividends. If you are a dependent of someone else, have $300+ in unearned income and have over $650 in earned income (wages) then you cannot claim exempt on your W-4.
Good luck with the job and schooling. And as a PS, if you are a dependent on your parent's return, remind them to look at the available education tax credits.
2007-07-01 15:27:41 · answer #1 · answered by BeckyBeq 3 · 2⤊ 0⤋
Based upon the information that you gave, you can file exempt since your income will be less than $5350 which is the standard deduction if you file Single.
If you had another job, then you should expect to have taxes taken out.
When you fill out your W-4, you can claim 1 exemption for every $3400 in deductions that you plan on having. Assuming that you do not itemize and that your parent(s) are going to claim you as a dependant, you can claim 1 exemption and end up with a refund. Or, you can claim 2 exemptions and owe a small amount of taxes.
If you decide to claim exempt this year, be sure to adjust your W-4 in early to mid-December since you will probably earn more next year.
2007-07-01 15:27:46 · answer #2 · answered by Steve 6 · 0⤊ 1⤋
You can claim exempt if you had to pay no taxes last year and expect to pay none this year. That's the legality of it. If you are wrong and at the end of the year you do, you will owe interest and peanalties.
However, some firms will not let you file this way because it sets flags at the IRS and no one wants the IRS to be paying closer attention to them than they do.
2007-07-01 15:24:35 · answer #3 · answered by kayakdudeus 4 · 0⤊ 1⤋
You wont' pay tax either way so go ahead and file exempt students are allowed and anyone who won't owe tax and didn't last year.
2007-07-01 15:10:31 · answer #4 · answered by shipwreck 7 · 0⤊ 0⤋
Yes, if that's your only income, you can check "exempt". That way federal income tax won't be deducted - with that amount of income, you won't owe any whether or not you are a dependent, so you'll be OK.
2007-07-02 04:57:41 · answer #5 · answered by Judy 7 · 0⤊ 0⤋
No, I filed exempt when i first got out of HS before going To college and ended up having to pay out. just pay the money out and get it back at the end of the year.
2007-07-01 15:13:31 · answer #6 · answered by Anonymous · 1⤊ 1⤋