Please help on filling out Form W-4 2007?

Question

This is my 1st job in California. I am married with working spouse and no children. I entered myself as "1" in the worksheet A and claimed my spouse as "1" in worksheet C. The total allowance claimed is 2. In column 3 I checked Married. Can anyone tell me what I did is correct? Will I owe money at the end of the tax year? Will I get a penalty? I earn $1k a month.

Also, I am a Part-Timer. Do I actually need to fill up the Form W-4?

My husband earned more than I do. He checked single and one dependent. Thanks for your help.

Answer 1

W-4 form is very confusing my advise will be to ignore A-H on the top portion because you'll end up with allot of dependents that you may not have, so on line 5 just put 0 by putting yourself as married on the form you automatically have 2 dependents which are you and you're spouse. Don't worry about owing money only people who put lots of dependents (we are talking about 10 dependents) may end up paying at the end. Remember you can change your dependents whenever you want, for example if you have a baby you can instead of "0" you can change it to "1".

Answer 2

The personal allowance worksheet, line H is 2. The instruction direct you to the Two-Earners Worksheet if the combined earnings from all jobs exceed $25,000.

If your income is the lowest of you and your spouse, on the Two-Earner Worksheet, line 3 (line 1=2 and line 2=2) will be 0 (line 1 minus line 2) and you are directed to enter "0" on the W-4 line 5.

Following these instructions will result in the withholding taxes that are the most nearly equal to your end of year tax bill.

Yes, you do need to complete the W-4 form because your employer is required to withhold taxes from you income

Answer 3

Forget the worksheet. Use the calculator on the IRS website. It will ask how much each of you makes and about common deductions. It will suggest what to claim on each W-4, and show an estimate refund/tax due if you follow the advise.

Actually, you don't have to complete a W-4. If you don't your employer will withhold as if you had claimed single with zero allowances. That is the highest withholding rate.

Using Form W-4 to figure withholding. To know how much federal income tax to withhold from employees' wages, you should have a Form W-4, Employee's Withholding Allowance Certificate, on file for each employee. Encourage your employees to file an updated Form W-4 for 2007, especially if they owed taxes or received a large refund when filing their 2006 tax return. Advise your employees to use the Withholding Calculator on the IRS website at www.irs.gov/individuals for help in determining how many withholding allowances to claim on their Forms W-4.

Ask all new employees to give you a signed Form W-4 when they start work. Make the form effective with the first wage payment. If a new employee does not give you a completed Form W-4, withhold income tax as if he or she is single, with no withholding allowances.

Answer 4

If your working spouse also claimed even one on their W-4, then you shouldn't have also claimed him or her - you'll probably end up owing at the end of the year. You probably won't get a penalty, depending on the total amount you owe. But you'd be wise to take it down to 1 instead of 2.

Answer 5

To be on the safe side, fill in 0 at all designated places on the form, a higher tax will be withheld, but it is better as you will get your refunds back when you file taxes next year, better than claiming yourself and your parents claiming you also, thereby leading to a situation where you will owe the IRS more at the end of the year. Just play safe and enter 0.