Do I get more money by claiming my children during the year or should I get taxed harder and get a bigger refund? Is one better than the other, or does it all equal out in the end?
2007-07-05 15:33:10 · 8 answers · asked by Jr. fan 2 in Business & Finance ➔ Taxes ➔ United States
I am married and have kids and have my taxes withheld at the higher single rate, claiming no dependents. This is because once I had to PAY in when I had them hold out as married, claiming my dependents. I hated having to come up with a large sum of money for taxes at once! Having the money held out like I do now ensures me that I have a fat tax refund to look forward to in February. I like to make my vacation reservations with it to get me out of the winter blahs.
2007-07-05 15:39:14 · answer #1 · answered by Snowflake 5 · 0⤊ 1⤋
It all equals out in the end. What you put on your W-4 determines what is withheld from your paychecks. Your tax is calculated on your total income, so what's there won't matter. If you had too much withheld, you'll get the extra back as a refund - which means that you lent your Uncle Sam your money at no interest for the year.
If you don't have enough withheld, you'll have to pay the extra at the end of the year.
2007-07-05 15:43:54 · answer #2 · answered by Judy 7 · 2⤊ 0⤋
1. The tax system should be fair? Oh that's cute. 2. Not sure exactly what you'd sue for since the rebate is, in fact, the law. Vote out you're congressperson. It's why we have a democracy. 3. You're missing the point. They shouldn't be taking so much in the first place. Just be grateful they're giving some of it back! (Full disclosure - I don't get anything - I don't qualify!) 4. Have a child - you'll find out why you need more.
2016-05-19 03:19:27 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Why loan money to the government and receive no interest? Your goal should be to have just enough withheld so you only have to pay a small additional amount.
You would be loaning the government money every paycheck from Jan 1 to Dec 31 which they will return to you several weeks after you file your tax return the following year. Wouldn't it be better to put that extra money every paycheck into a savings account?
2007-07-05 17:54:49 · answer #4 · answered by skipper 7 · 3⤊ 0⤋
If you get a large refund you are just making an interest free loan to the government. I honestly can't think of a more irresponsible use of my money than that. Claim whatever withholding allowances you are entitled to and keep YOUR money in YOUR pocket all year. Put the extra in the bank and let it earn a bit of interest for you. But don't give the government a freebie!
2007-07-05 15:41:15 · answer #5 · answered by Bostonian In MO 7 · 2⤊ 1⤋
In my opinion, you should try to come as close to breaking even for the year. Getting a huge refund is a poor way to manage your taxes.
When filling out your W-4, you can claim 1 exemption for every $3400 in deductions that you plan on having. You will need to adjust the deductions for any credits that you have as well.
2007-07-06 00:27:51 · answer #6 · answered by Steve 6 · 2⤊ 0⤋
Don't know what fool gave a thumbs down to Bostonianamo, but he is on the ball. This is the very thing my dad told my little brother. Do not put any additional monies in the government's pocket. Claim all of your legitimate dependents and put your money in your pocket. The IRS is not a savings account....
2007-07-05 16:45:38 · answer #7 · answered by Anonymous · 2⤊ 0⤋
It depends on whichever way you wish to file your tax and whether you want to get more net pay in your earnings. If you claim your children on your W-2 form, you will receive less net pay during the year. If you wait until you file your return, claim the children and receive a larger refund.
2007-07-05 15:43:13 · answer #8 · answered by Sunshine 6 · 0⤊ 2⤋