Let me preface our financial situation. I currently make in the area of 30k/yr and my spouse is near $23k/yr. My deductions are taken out based on being married while my wife has her deductions taken out at the married but higher, single person rate. Basically I want to know if this is the best way to ensure we wont owe money at the end of the year?
2007-11-30 04:56:29 · 5 answers · asked by locotrentrece 1 in Business & Finance ➔ Taxes ➔ United States
If I understand you correctly, you have you W-4 reflecting that you are married and your wife's W-4 reflects that she is single. Based on the incomes that you provided, I think you are in great shape. It is highly unlikely that you will have to owe anything.
I just looked at the 2007 tax tables which are now available on irs.gov. According to your combined income of $53K your taxable income with only standard deduction is $35.5 and your tax is $4,539. If you look at your most recent pay stubs, you should be able to determine if you are over or under withheld. Once you determine that, you can always submit a new W-4 whenever you want to prevent owing anything.
Some people choose to be intentially overwithheld, so they can get a refund. Personally, I'd rather save my own money, and not let the IRS do it for me.
And congrats on the marriage. I hope it is a long and happy one.
2007-11-30 05:15:38 · answer #1 · answered by Griffin 4 · 0⤊ 0⤋
The W-4 is your friend, and it need not match your tax return in anyway. You are allowed to just leave them alone and have the higher dollar amount at the single rate be taken out of your check. Another approach is to actually do your taxes, a year in advance, and yes guessing on somethings, on paper, see how much you owe, then have your employers take that amount out of your check. For example, your guys make 53k, after standard deduction (assuming you don't itemize), and personal exemptions, your taxable income for next year will be 35,950- tax on that is $4641. Assuming you get paid every-other week, take that number divide by 26 (number of pay periods) and divide that by 2( for each of you) that's $89.25. So instead of messing with allowances or status, just have each of your employers take $90 of each one of your checks every period.
2007-11-30 13:10:48 · answer #2 · answered by rob b 3 · 1⤊ 0⤋
Using IRS Publication 15 as a guide, combined, you and your wife can claim one allowance for every $3500 in planned deductions in 2008 regardless of your income.
Assuming that you don't itemize, you will have about $18000 in dedcutions in 2008. That means 5 allowances can be claimed and you will still have a small refund.
2007-12-01 08:02:44 · answer #3 · answered by Steve 6 · 0⤊ 0⤋
Are you each claiming one? You'll probably come fairly close to breaking even the way you have it. You might get a small refund, but not much.
2007-11-30 22:05:00 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
If it was me I will countinue to do it the way i was doing it before i got married so that it want be no problems.
2007-11-30 13:04:45 · answer #5 · answered by ivory 2004 3 · 0⤊ 1⤋