I'm reading alot of dave ramsey stuff and he says that if you are getting a huge tax refund, you are lending the goverment money tax free. I was thinking about claiming 10, so I would have more money on my paychecks. i just don't want to have to owe at the end of the year.
2007-11-16 05:30:10 · 9 answers · asked by Diana G 3 in Business & Finance ➔ Taxes ➔ United States
The deductions you claim are only a small part of the total amount of taxes. The largest part of your taxes is for social security, of which the number you claim isn't a factor. I am married with 2 kids, claim 4 and always get back a huge refund, while not paying out a lot every paycheck.
2007-11-16 05:48:23 · answer #1 · answered by Jeff G 2 · 0⤊ 1⤋
There is probably a balance between claiming 3 and 10. You should do a bit of research and figure out how many you should claim. Or you could claim 10 then put the difference between 3 and 10 in a savings account where it will draw interest. At the end of the year if you do owe taxes you will have it and if not then you have a nice savings plan started.
2007-11-16 13:34:47 · answer #2 · answered by Don 5 · 0⤊ 0⤋
If you go that far overboard, you will owe AND have to pay a penalty or interest.
Claim the most that you can without owing.
If your spouse does not work, claim 5.
If your spouse does work, the total claimed by the two of you should be 5, but you can decide how many of these 5 to claim on which W-4. (You could go 3 and 2, 4 and 1, or 5 and 0. Generally, the larger number should be on the W-4 of the higher paid person.)
2007-11-16 14:26:23 · answer #3 · answered by StephenWeinstein 7 · 0⤊ 0⤋
If you are well disciplined and able to save, it is not a good idea to get a big refund. If you are like a huge chunk of americans, living paycheck to paycheck, it might be a good idea to set up your W4 so it takes out a little more than needed. It may be tough to have to come up with a bunch of money on April 15. I've found that if I use my "true" deductions, myself, wife and kids, I still owe a little bit and that works for me. I'm sure that depends on how much you make, how much you can claim on interest, medical, charity etc. deductions.
2007-11-16 13:42:54 · answer #4 · answered by Ty 2 · 0⤊ 0⤋
For 2008, you and your husband are allowed to claim one allowance for every $3500 in planned deductions to come close to breaking even regardless of your income. Planned deductions are your personal exemptions and the greater of either your itemized deductions or standard deduction. Also, if you are eligible for tax credits, you can convert the credit to an equivalent deduction and add those to your total deductions.
If you calculate that you can claim 10 deductions, that is the total that you and your husband can claim, you cannot claim 10 deductions each. Otherwise, you will owe severly.
For your total deductions, when you file your 2007 taxes, you can use that as a guide.
Read IRS Publication 15 for more details. Start around page 35.
2007-11-16 14:08:30 · answer #5 · answered by Steve 6 · 0⤊ 0⤋
A worksheet should accompany your W-4 to determine what the appropriate amount should be. If you've been getting huge refunds in the past, then yes that's not good, because the government gets an INTEREST free loan on that money.
2007-11-16 13:37:18 · answer #6 · answered by mplsundin 4 · 1⤊ 0⤋
If your kids are all under 17, so you'll get the child tax credit for all of them, you'd be OK claiming 10 or possibly even a little more. Use the worksheets to see what you qualify for.
2007-11-16 21:07:39 · answer #7 · answered by Judy 7 · 0⤊ 0⤋
Just make sure you don't end up owing too much...If you do you'll owe penalty and interest.
The MAN wants his money and won't let you make the interest on it.
2007-11-16 13:42:42 · answer #8 · answered by feanor 7 · 0⤊ 0⤋
Use the W-4 worksheet. Its not hard.
2007-11-16 13:47:40 · answer #9 · answered by npk 7 · 0⤊ 0⤋