W4 tax questions - what do I put here on this question? Or what does this mean?

Question

I claim exemption from withholding for 2007, and I certify that I meet both of the following conditions for exemption:

Last year I had a right to a refund of all Federal income tax withheld because I had no tax liability and

This year I expect a refund of all Federal income tax witheld because I expect to have no tax liability.

If you meet both conditions, write "Exempt" here

Answer 1

If you are a dependent of your parents and will make under $5350 for the year - or if you aren't a dependent and will make under $8750 - and if you didn't pay any tax the previous year, then you can write exempt and they won't take out taxes. Otherwise do NOT claim exempt - you would probably end up owing at the end of the year, and could also be fined for filing a false W-4.

Answer 2

Sounds right. If tax due on your return BEFORE withholding was zero and you expect the same this year, IRS doesn't want to be bothered with send you a refund.

Answer 3

go here to figure out your exemption

http://www.irs.gov/individuals/page/0,,id=14806,00.html