how many tax exemptions should I have?

Question

I work full time, no kids, no mortgage, no school, no car payment, etc... I dont know what else exempts you from paying taxes. I heard the lower the number the more taxes they take out, but you will get more on your return.

Answer 1

You should claim 1 exemption for every $3400 in deductions that you plan on having.

It appears that you will not be itemizing. Therefore, your total deductions will be $8750 for 2007 as long as someone does not claim you as a dependent. That means that you can claim 2 exemtpions and still have a small refund or 3 exemptions if you want to owe a small amount. If you can be claimed as a depenent, then reduce the previous exemptions by 1.

Answer 2

If you are asking how many dependents should you put on your withholding then the answer is 1, unless you are married then it would be 2. Some folks inflate these numbers so less tax is taken from their check, but then at the end of the year they might have to come up with extra money to pay their taxes. There are a lot of tax exemptions you might be able to take, here are just a few: Charitable contributions, office in home, mileage for doing charity work, large medical expenses etc. Perhaps you should look into buying a home then at least you would have an interest deduction.

Answer 3

If you are alone, no kids, etc. I would claim 0 exemptions on your W4s for state and federal. This way they will take out more money during the year, but you will end up with a bigger refund. If you want a few dollars more every month, then you will need to claim 1 exemption for yourself. The more exemptions you take (and dont need) the more money you will keep, but when your taxes are calculated next year - you will regret it! Your refund will be lower or you will owe. So stick with 0.

Answer 4

Here's what you need: owe nothing more, get nothing back.

Ideally, when you figure your taxes at the end of the year, you should owe no more than what has already been withheld from your pay. Alternatively, you should not be getting a huge refund.

So, you need to go to the IRS website and look at the tax tables. Use the Standard Deduction and calculate accordingly. Since we're over half way through the tax year, use the numbers on your pay stub to calculate your whole year's earnings and with holdings. Adjust accordingly, if needed.

If you're getting a huge refund, that's money the government borrowed from you at no cost. If you owe a huge amount, there could be additional penalties, as the IRS frowns on it.

Answer 5

You should always claim yourself, since the money they are taking is a huge amount anyway. By not claiming anyone you are actually losing money since recent tax laws have changed. People are now starting to claim the one because the calculations that the IRS is using you actually lose around 500 a year by claiming zero deductions. If you take an online course you can claim tax exempt since you are a full time student, but you must work the approriate hours every day online to continue your education. Good luck

Answer 6

Claim one and you'll come in pretty close to even at tax time. Ignore the response that tells you that if you're a full-time student you are tax exempt - that person is flat-out wrong. And the person who tells you to claim three is wrong in her reasoning and is setting you up to owe money when you file.

Answer 7

none... but depending on if you have any interest bearing accounts then you may get a lesser amount...

Answer 8

You are screwed until you become wealthy.