How much should i claim in taxes?

Question

I make about $41,000 at one job and $8,000 at another job. I just bought a home and I estimate I'll be paying about $17,000 in interest this year. How much should i claim so that I can maximize how much i take home a month without having to pay at the end of the year? I am single with no kids. Estimated annual property tax would be about $800. Income tax rate is about 8%. No other contributing factors except for 4% going into my 401k. Hope that is enough info to answer my question.

I live in Hawaii and yes, i pay state taxes. As of now, i file standard. Thanks in advance.

Roughly how much of a difference would it make in my take home amount?

Answer 1

Use the worksheets on page 2 of Form W-4 to figure your withholding allowances.

Answer 2

I'm assuming that the 401K is at your first job, and that the $41,000 is your income before the 401K deduction. After the 401K deduction you'd have income from the 2 jobs of around 47,360. Your itemized deductions might total around $3800 (state and local tax) + $17,800 (house interest and taxes) or $21,600. So your taxable income would be around $20,410 and your federal income tax for the year would be around $2700. No matter how many allowances you claim on your W-4 for your second job, if the money came in fairly evenly through the year, they will deduct little if anything from that check for federal income tax, although you'll owe tax on it because of the two jobs, so claim one allowance there. If you claim 3 allowances on your main job, then they'd probably take out about the right amount to cover the tax you'll owe.

This assumes that on both jobs, you are working as an employee and having social security and medicare deducted. If the 2nd job is self-employment, you'd owe self-employment tax on it so should probably just claim one allowance on your main job to cover the self-employment tax.

Answer 3

Regardless of your income, you can claim one exemption on your W-4 for every $3400 in planned deductions (either standard deduction or itemized deductions plus your personal exemptions). Do not include your 401(k) deductions in this calculation.

In your case, I would claim 7 exemptions ($17000 interest + $800 property tax + $3000 state income tax +$3400 personal exemption = $24200 total deductions) to come as close to breaking even for the year.

Answer 4

ok...what state do you live in, do you pay state taxes? do you file standard or do you itemize?

Answer 5

well dont hav any idea about the payment of tax coz here in my country we dont pay tax