I have a payroll question, as far as what I should claim? married or single?

Question

I claim single 3 on my paycheck, and then claim married at the end of the year, but lately I'm working 12 to 15 hrs overtime and bringing home less money then when I have no overtime, so my question is should I change to married now and just not get back as much at tax time? Is there anything else I can do to see more of my paycheck? Thank you for your help.

Answer 1

When you claim single on your paycheck, they take the most out of your pay. You say you are taking home less with the overtime. Obviously, when you claim married at tax time, you will get a lot back. Some people like this because they use it as a way of saving money all year & putting the refund in the bank when it comes in.

The problem with this is that they are not earning any interest on the money all year. You are better off taking a chunk out of each paycheck & putting it in the bank — if you have the discipline to do it.

If you do have the discipline to save a certain amount from each paycheck, then you should change your status. I strongly suggest you see an accountant one time. He/she can figure out how many dependants you can claim during the year to get the most money out of your paycheck, while at the same time have it balance out to zero at the end of the year.

You're allowed to claim as many dependants during the year, as long as you claim the actual amount on your tax returns. You will take home more with each paycheck, but you could wind up owing money at tax time. That's why an accountant can help you. Also, do you have a lot of deductions? And, is it more beneficial to file jointly with your spouse or to file separately? These are all the things that have to be considered.

I had a married co-worker once whose accountant worked it out for him. He claimed 8 dependants all year, getting a lot of money from his paycheck. He put all this extra in the bank. At the end of the year, at taxtime, he had to take off those 8, of course, and he ended up not getting a refund, but not owing anything either.

If you are like many other people who have a hard time saving out of their paychecks, you may want to have them take the most out of your paychecks, and then at tax time, getting a large refund.

So, it depends upon what is the easier way for you to handle the money. The 2 ways to see more of your paycheck are to change your status to married and then claim as many dependants as possible. However, be careful not to end up owing money to the IRS. So, have a professional work it out for you. By the way, if you see an accountant for tax purposes, you can deduct his/her fee.

Good luck.

Answer 2

If you can manage it, you should claim higher deductions and put the extra money in a savings account instead of letting it sit for 12-15 months then getting it in a lump.
If you haven't changed your deductions, it is likely that you have bumped into a higher tax bracket by working over time and it is just enough higher that the extra taxes are dragging your net down. Depending on what you actually earn, you may need some of that money at the end of the year because they may not take out enough when you work most of the year just below the increase point.

Answer 3

It would make sense to claim married, 3 allowances if you have yourself, your spouse and an additional dependent. If you are getting refunds each year, you might be able to claim more. A refund just means that you overpaid through the year, and the extra is being refunded to you.

If the third exemption is for a child under 17 so you get the child tax credit, you could probably claim an additional allowance or two on your W-4 without being in trouble at tax time.

Answer 4

First question, are you married? Assuming that you are, then you can claim married on your W-4. Second question, does your wife work? If so, be careful so too much tax isn't withheld.

You can claim one exemption for every $3400 in deductions that you plan on having for the year regardless of your income level. Assuming that you don't itemize, are married, and have no children, you can safely claim 5 exemptions on your paycheck and still get a small refund at the end of the year. If your wife works, you will have to reduce your exemptions by the number that she claims.

Answer 5

The more dependents you claim the more money you get on your check, but the less you get back at tax time. So if you claim 0 they are taking out the maxium from your check, but you get most of it back at tax time. If you claim more than 0 you get more now less later.