On my W-4 I found out from my employer that I am claiming Married status with 2 exemptions. Right now over $100 in deductions is being taken out of my check every time. In order to lower the deducation amount per check, do I need to raise or lower the number of exemptions I'm claiming?
2007-09-19 05:07:15 · 7 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Raise the number. The more exemptions claimed on the W-4, the less deductions taken out of your paycheck. But remember, that will only affect federal withholding and state withholding. It won't affect social security or medicare withholding at all. Those are fixed %'s and not dependent on W-4. Also, if you have deductions that are not tax related (health insurance for one) they won't be affected by the W-4 changes either. You also want to make sure that you don't have so little taken out in deductions that you owe a large amount next April. If you owe more than $1,000 in federal taxes, you could be hit with an underpayment penalty.
2007-09-19 05:13:08 · answer #1 · answered by Anonymous · 2⤊ 0⤋
A higher number of allowances on your W-4 will mean that less will be taken out of your paycheck. But be careful not to claim more allowances on your W-4 than you're entitled to, or you could end up with a big tax bill, maybe plus penalties, when you file your tax return.
Allowances aren't just for yourself and for people you can claim. You can also take additional allowances if you have high itemized deductions or credits.
What you claim on your W-4 doesn't change the total tax you owe for the year, just changes when you pay it. If you've been getting a large refund, it would make sense to increase your allowances so you get that money in your paychecks - but realize that your refund will be smaller by the amount you got extra through the year.
2007-09-19 12:26:08 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
Raising the number of exemptions lowers your tax (an exemption states that you are "exempt" from paying a certain amount of tax.)
2007-09-19 12:26:06 · answer #3 · answered by Mel 6 · 0⤊ 0⤋
The more exemptions you have the less your employer will withhold from your check of the Government.
2007-09-19 12:17:04 · answer #4 · answered by JS 3 · 0⤊ 0⤋
never claim exempt.... put you are married with how ever many incomes (2).... then when it says how manyyou are claiming put 0.... this will still take money from your check but you will get every penny back in april..... its worth the lump sum
2007-09-19 12:16:22 · answer #5 · answered by amplifyurbeauty 2 · 0⤊ 1⤋
To lower withholdings, you claim more exemptions.
(To increase withholdings, you would claim fewer exemptions.)
2007-09-19 14:22:48 · answer #6 · answered by StephenWeinstein 7 · 0⤊ 0⤋
Raise but be careful you will probably end up paying next year
2007-09-19 12:16:12 · answer #7 · answered by Rick K 3 · 0⤊ 0⤋