To be exempt or independent on taxes?

Question

My last year of college I was working part time and was listed as exempt.

I have been working full time since June of 07 and still listed as exempt and not sure if i checked in/dependent or not.
Where could I find out this info.?


Should I claim myself as an independent of 1 (myself). I live alone, have my own apartment, car, no children, etc...pay Everything I need to live alone.

Would I get more money back at the end of the year being independent. I will have been with the same company for a year and 4 months in Jan. 08.

Is it too late to change my tax status with my company?
Will I loose more money from my paycheck being independent claiming 1?

Im still young and confused about taxes.

Answer 1

To find out where you currently stand, contact the payroll person at work. They have all the details. How else wound they know what to withhold?

You should only consider yourself "exempt from withholding if you expect not to have any tax liability at the end of the year.

As to what you should be claiming. For the most part that is a personal choice. So long as you don't have too little tax withheld from your paycheck (under withholding penalties), then it's all about how comfortable you feel.

Some people will say have as little as possible withheld so you don't give Uncle Sam a tax free loan of your money. Others like to have alot withheld because it "forces" them to save (they get a big refund come tax time).

Basically it is never too late to change your withholding (unless it's right at the end of the year). All you need to do is fill out a W-4 and give it to your payroll person.

If in doubt, talk to your tax person.

Answer 2

You'd better undo that "exempt" right away - you aren't exempt any more even if you might have been while you were in college. You can be fined for filing as "exempt" when you aren't.

If you've been showing "exempt" all year but have worked full time since June, you will have a tax liability when you file, and will owe taxes and possibly penalties at that time. You can avoid the penalties if you have enough extra taken out between now and the end of the year to bring what you owe under $1000 when you file.

You don't check "independent" or not on a W-4. You claim an allowance for yourself, or you don't. You can find out what you currently have on your W-4 by checking with your payroll department - but it really doesn't matter, since if you filed exempt they won't have been taking out any federal income tax. So yes, when you correct your W-4 they'll start taking out taxes and your check will go down. And this year you won't get a refund - you'll owe unless you make up the difference before that. You'll owe a few hundred dollars less by being independent (claiming yourself) on your return.

Answer 3

You will probably want to file and claim yourself as a dependent on your taxes this year. You usually want to do this if you provide for the majority of your own expenses. If you originally put Exempt on your W-2, you will have more money taken out of your check if you change it to Single-1dep, and you need to fix this soon--it's October--taxes are due in April. If you originally put Single-0 dependents, leave it alone--you'll probably get a refund.

On your W-2 filed with your company, you should make sure you are having the appropriate taxes withheld so you don't get a big tax bill at the end of the year. You can change this at any time. I advise filing this form as single with no dependents, so that a little extra is taken out and you'll (normally) get a refund at the end of the year (you still claim yourself as a dependent when you file your taxes, but not when you are having your employer withhold taxes). If you originally filed as exempt, you could get hit with a big bill at the end of the year--you need to fix this NOW, and you may want to get some tax forms (1040EZ, or 1040A to get the deduction for student loan interest this year) and instructions (from the library or the irs website).

Basically, you need to figure out a few things. First, look at your pay stubs and estimate how much you will have made at the end of the year. Put it on the 1040EZ form and figure out about what your tax will be. Then look at the amount of taxes withheld from your check, both each pay period and year to date, so you can figure out how much you think will be withheld by the end of the year if you do nothing. If it looks like you will owe money, you can have a flat rate taken out over and above the normal amount so that you'll be caught up by the end of the year and won't get hit with a big tax bill.

If you work at a company big enough to have an HR department, they ususally don't mind helping people out with this--give them a call--they'll be able to show you what I've been trying to explain, and it would probably make more sense.

Answer 4

Why do you're saying you're exempt. you could desire to be, yet merely putting exempt on your W-4 would not advise you do no longer pay tax, it merely skill they do no longer withhold earnings tax. in case you purely make a touch over 8500 you will no longer owe any tax. yet once you're making over $13,350, you will owe.