Today TaxMama® hears from BBall in the TaxQuips Forum, with a common issue. He is trying to understand whether he should claim zero or 1 on his W-4 – and what affect that will have on his paycheck.
Ah yes, the mystery of the wages. That can be confusing. Add to that the effect of being claimed as a dependent on someone else’s tax return – and the waters are further muddied.
There are any number of exemption or withholding calculators out there. The IRS has one, as does TurboTax, as does H&R Block, as does Kiplinger etc. You can certainly play around with those to help you determine your potential total liability and the number of exemptions to claim.
Or, you can go directly to the source – IRS Publication 15 – the Employer’s Tax Guide. Look at the right tax table that relates to your payment frequency for SINGLE or MARRIED taxpayers. (It could be weekly, monthly, semi-monthly, etc.) That will tell you exactly how much each of those exemption selections will deduct from your paychecks.
Of course, if your wages are higher than the maximum amount in the tax tables, you’ll have to go to the tax rate charts. Those are not nearly as easy to figure out. But, at least that means you’re earning enough to have someone help you!
And remember, you can find answers to all kinds of questions about withholding and other tax and business issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
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