For example, I pay 1000/mo alimony, I am in the 28% tax bracket. Is it OK to have the IRS not withhold that $280/mo?
2007-10-16 04:24:24 · 7 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Yes. You might find the withholding calculator on the IRS website useful. It takes adjustments to income, such as alimony, into account in determining the correct number of allowances you should claim.
It's at http://www.irs.gov/individuals/article/0,,id=96196,00.html
2007-10-18 12:31:22 · answer #1 · answered by Steve B 6 · 0⤊ 0⤋
Maybe. Some other tax advantages that are potentially beneficial is taking part in 401K plans / other retirement savings plans through work and flex plans.
You should also take into account any other tax related issues that have happened this year as well. If you'll be considered married at the end of the year (and were not last year) you'll have to take into account your tax may be higher as a single individual (depending on income and dependents). The purchase or sale of property will also effect your tax rate too. You may want to do a what if scenario with your tax professional. Many times it would be a free service provided your a good customer.
2007-10-16 04:33:40 · answer #2 · answered by Sherri M 1 · 0⤊ 0⤋
You don't have an exemption on your W-2, it is a reporting form. You checked exempt on your W-4, which means you had no tax withheld from your pay. Hopefully you have some money in savings, depending on how much more than $5,700 you made because you will owe at least 15% on every dollar over $5,700. If your income is over by a lot, you may also incur a penalty plus have to pay interest. Go to your employer right now and take 1 exemption on a W-4. They will give you one to fill out.
2016-05-22 22:52:09 · answer #3 · answered by ? 3 · 0⤊ 0⤋
Yes, but this could lead to you being liable to pay some amounts. You have to careful when playing with the withholding. Laws change regularly on taxes and who knows what will happen by the time that you file. Just remember that if you adjust it that way, you can red flag yourself to the IRS. If there is any questions that they have or you end up owing them, they can go to your employer and submit a form that will instruct the employer to change your withholding stats to what they think it should be.
2007-10-16 04:48:39 · answer #4 · answered by T 5 · 0⤊ 0⤋
Talk to your tax person about this.
If you do your own taxes, talk to payroll at your employers about it.
If your usual tax withhold is $280/mo I would not drop the entire thing...
Think about how much you get refunded each year from this and divide by 12 to see what reduction might be safe to do each month. If this is your first year paying alimony, you might want to wait till tax time next year to figure it out.
2007-10-16 04:29:37 · answer #5 · answered by Nedra E 7 · 0⤊ 0⤋
Yes you can adjust your W-4, but remember it's an adjustment so your tax savings is 28% of what you pay, not the entire amount, so you don't reduce your withholding by the amount you pay, just the tax that you don't have to pay on it.
2007-10-16 04:54:44 · answer #6 · answered by Judy 7 · 0⤊ 0⤋
It is OK to not overwithhold your taxes from your pay. You can add some allowances to your W-4 to reduce your withholding. Adding 2 allowances should be safe.
2007-10-16 04:46:22 · answer #7 · answered by ninasgramma 7 · 3⤊ 0⤋