I currently make about little over 29,000 a year, how may allowances can I claim, without getting hit owing.?

Question

I was claiming 8 and Federal was not being taking out of my check, in addition my hrs were cut. so I was trying to make up for the lost.please help. I do own my home, have a 19mth old son.

Answer 1

You don't give enough info to really answer your question. Since you mention a home and a baby, I'm going to assume for my answer that you are married. If your wife doesn't work, you are most likely OK and can leave your W-4 as it is. You'd get a child tax credit which would wipe out most or all of your taxes, and would also be eligible for EIC, so you wouldn't likely owe anything and with EIC, should get something back.

If your wife works too, you might and up owing a fair amount, depending on how much she makes and what she has withheld. If she works too, both of you should take your allowances to Zero for the rest of the year and you might be OK.

If you aren't married, you are possibly already well past the point where even claiming zero for the rest of the year would let you break even.

Answer 2

Trying to make the numbers come out right by using the number of allowances as your only tool can be difficult.

I would recommend that you take maybe twice the allowances you appear to have (you and your son equals two, so take four). That will ensure you are underpaying your taxes.

Then request that your payroll department take additional tax from your paycheck in the amounts that will bring your Fed and State tax deductions to the exact amount you want.

Figuring out the exact amount you want deducted each payday can be done by looking at the total amounts of taxes you ended up having to pay last year (it's on the income tax forms you completed for the year).

If it's safe to assume you'll receive about the same income this year as you did last year, then divide each amount, the Fed amount, and the State amount, by the number of paydays you have per year. That will tell you how much should be deducted each payday. Then compare that amount with what is currently being deducted from your check each payday (with four allowances). Request the differences (Fed and State) be added to Fed and State tax deductions each payday, and you'll end up with your deductions being right on the money (or right where you want them based on last year's taxes).

Also, remember that you can be, I think, up to 20 percent off without having to pay a penalty for underpaying your taxes. Check the government's website www.irs.gov to be sure though.

If you will be earning more money this year than you did last year, you can use this year's tax forms to figure out what your taxes would be if you earned that much money this year. Next year's tax laws won't be that much different, so you could use those numbers the same way you used last year's numbers in the previous paragraphs and come pretty darned close to being right on the money. Also, it's a lot easier if you have a tax preparation software package. I use TaxAct. The total cost for both Fed and State combined is only $20. Real cheap. Also, I think there is software out there that is completely free. There might be reference to that free software (name and availability) at the government's income tax website which I think is www.irs.gov.

Answer 3

You should only be claiming two, with a child and the rebate you can get away with 3 but will lower you refund. At 8 you will be owing money, and a sizable sum at that, and will most likely be audited when you file at the end of the year with the correct amount of two. Pay a little a week now, or pay a whole lot at once later your choice.

Answer 4

Our tax system is a "pay as you go" system which means that your taxes are due by December 31. If you owe the IRS more than 1000 dollars come tax day, they can penalize you and charge you interest.

You should claim ZERO for the rest of the year (and probably then some) and then come Jan 1 you can change it to 1.

You didn't say whether your spouse has income also, so....

You can go to http://www.irs.gov and use their tax calculator and it will tell you exactly how much to have taken out of each check.

Answer 5

I would advise you to have as many exemptions as you will claim on your tax return