My company did it automaticly for me as a 2. I am single and live alone? should i change it?
2007-07-03 12:59:41 · 9 answers · asked by MICHAEL P 2 in Business & Finance ➔ Taxes ➔ United States
You can claim 1 exemption for every $3400 in deductions that you plan on having.
Assuming that you don't itemize, by claiming 2 you should have a small refund. If you increase to 3, then you should owe a small amount.
2007-07-04 00:20:19 · answer #1 · answered by Steve 6 · 1⤊ 0⤋
The quick answer is no.
When you claim 2 on your W-2, you actually end up paying pretty close to the correct amount of tax. This means you will have a small refund at the end of the year, or no refund at all. Rarely would you end up paying taxes at the end of the year.
I have always claimed 2 on my W-2 (single and live alone as well). My refund at the end of the year between state and federal is about $500. Sometimes I have to pay one or the other, but I get back more than I owe from the remaining one.
Think of it this way. If you get a huge refund, that means you gave Uncle Sam an interest free loan for the year. Wouldn't you rather have your money today than next year? You could invest whatever amount you think you would get as a refund and earn better returns, even if you put it in a low-interest savings account! Collecting some interest is better than none.
So don't lend Uncle Sam money for free. Keep the allowance at 2.
Hope this helps!
2007-07-03 13:11:36 · answer #2 · answered by Kurt B 3 · 1⤊ 0⤋
Your company should request that you fill out a W-4. Follow the instructions that come with it. If you are single, you need to change it or you will owe at the end of the year. Your company should never make that choice for you. The form requires your signature.
2007-07-03 18:17:01 · answer #3 · answered by towanda 7 · 1⤊ 0⤋
If you just have one job, then if you leave your W-4 at 2 allowances you'lll probably be pretty close at the end of the year. If you change it to 1, you're more likely to get a small refund.
2007-07-03 15:25:01 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
Change it. Too many exemptions means you could owe money when you do your tax return. Set it at 1 or zero.
2007-07-03 13:09:06 · answer #5 · answered by Anonymous · 0⤊ 1⤋
Yes you should change it to one because if you put zero there going to take alot out of your check and using one you will receive money back n e ways.
2007-07-03 13:12:41 · answer #6 · answered by vanechita 2 · 0⤊ 1⤋
read IRS code 3401 (n) it states the employer has no right to determine the number you can go total emept see www.givemeliberty.org for free package .
2007-07-04 12:53:00 · answer #7 · answered by DRK1946 2 · 0⤊ 0⤋
claim 1 more money out and back , 2 less money out and less money back ...
2007-07-03 16:30:49 · answer #8 · answered by craftduck 1 · 0⤊ 0⤋
OH YEA you better change it to 0 or you'll be paying out the butt come next April...
Whew I'd hate to be you if you don't change it.
2007-07-03 13:07:36 · answer #9 · answered by noobienoob2000 4 · 0⤊ 4⤋