Skip to comments.Anyone give some tax advice?
Posted on 11/02/2013 11:15:27 AM PDT by Ghost of SVR4
Hello all... Any chance I can get some tax / income savvy freepers to weigh in? New job, first pay. No exemptions are showing up on my pay stub (I took it in the kiester this pay with Federal Withholding). I have three kids who live with me full time. I have a soon to be x-spouse and we are NOT filing jointly. I am in the 28% tax bracket. Is there a (relatively) easy site I can calculate what I should be getting paid? My last job's with holding was CONSIDERABLY less. My new HR rep's merely have heartbeats for their qualifications so I need to do some homework.
They have calculators - now toward the bottom of the home page. I use them whenever something changes for hubby / son’s checks.
If there are kids involved, be careful if you choose to claim them . . . if the mother does, prepare for a world of hurt.
Uh, no.... You claim every exemption you are entitled to, to maximize your take-home pay...
Exactly! Good for you.
Mother cannot. They live with me full time and that is easily verified. Thanks for the reply..
Thanks for the link, going to check it out..
I plan to do that in 2014 actually. For now, I am still working the Ramsey plan to cut away more debt that is pressing so I can afford an accountant! :)
Hum, no. Claiming zero exemptions on your W-4 will result in the most amount of federal taxes being withheld. The more withholding exemptions you claim on your W-4, the less amount of tax is withheld.
1rudeboy is confused as usual. zero exemptions will maximize your tax withholdings, not your take-home. The more exemptions you claim the less tax withheld and the higher your take home.
You can download a W4 form and use the worksheet to help calculate how many exemptions you should claim.
However, the advice posted earlier about the ex is valid. In the absence of a legal agreement on how to split the tax credits, the person who gets to claim them is who the kids live with more than 50% of the time. And that needs to be documented.
Although the divorce will make things more complicated, I would just take last year's tax forms, and plug in the new pay numbers to get a decent estimate for this year's and next year's taxes. The brackets really didn't change much between years.
Be careful. The mom walks into Jackson-Hewitt (does it still exist?) and the schlub tells her she can. You get caught in the crossfire.
Oops, got that wrong . . . I meant the opposite.
That comment screams, "internet butthurt."
Believe it or not, I actually did that for giggles about a decade ago as well. I didn’t need the help, it was more to prove a point to some people I was having a debate with offline. I called local, next state over and a different coast. Three different accent’s, three different answers, three different codes cited (along with the litany of forms I would have to fill out). The IRS doesn’t even know their own code as it is today, but we are supposed to OR ELSE.
Not sure if serious, but that's backwards. Claiming zero exemptions means your taxable wage isn't reduced before the withholding is calculated. Therefore claiming zero INCREASES your taxes withheld, reducing your take-home pay but likely resulting in a refund.
She lives in a different county (different school taxes) and my kids are picked up daily at my own home (i.e., it's on the School districts roster where they are at time of pickup). Not much more evidence is need than that.
Absent any history, you can:
1) for this year, take one more deduction than what you will be filing for at the end of the year. In most cases you will receive a refund but it will be small.
2) use last year’s tax software with this years information. It should give you a decent understand of your tax liability for the YEAR. Divide that by the number of pay checks and that should be how much you have taken out of your check - no more. Adjust your deductions to get close to that amount.
Understand that taxes, bonuses, deductions, credits, rebates, exemptions etc all change year to year so while a good guestimate, not all ways accurate.
3) Pay to have a tax service estimate your taxes for you. This is a fairly accurate way to get really close.
I figured you just worded it wrong. In any case, I should have read further before I replied, as three others already alerted you.
I pray she does something so stupid. My attorney subpoenas the bus driver’s company; end of story. I live rural, my kids are picked up daily in front of my home.
Claim 9 exemptions...above that your employer must report it...so
I’ve been told
There is the ADP link mentioned above but also try this. It also has a W-4 calculator.
You should also factor in whether you will have any pre-tax deductions like a section 125 health plan(s), contribute to an FSA or a 401k. Be careful however because 401k contributions are exempt from Federal and most state withholding (not in PA for example) but not from SS & Medicare.
Ideally you want to have enough tax withheld as to not owe anything and not so much that you get a refund. I typically do a W-4 withholding calc midyear to make sure Im on track.
My new HR rep's merely have heartbeats for their qualifications so I need to do some homework.
FWIW, I am and have been a payroll professional for over 20 years and I will only give an employee generalized guidelines and will point them to resources to help them but I will never tell them how many exemptions they should claim as Im not their personal accountant, may not be aware of all their personal financial situations and dont want to give them advice that might result in them being under withheld its not my job or responsibility
You corrected before I could. The more allowances you claim the less is withheld the more take home you keep. The secret is to have enough withheld to make your tax bill come April.
Find a good tax preparer who has their own business and make them your new best friend. They don’t necessarily have to be an accountant. If you have your dependents with you and you have supported (supplied their welfare) for more than half the year, you might be eligable for earned income tax credit, child tax credit and child care expense. Those contingent on child ages and your income. Again find a GOOD tax preparer who is in business year round.
This can and does often happen. You file your taxes claiming the dependents, but you have to file by mail...can’t use efile. Have proof to support your claim and duke it out with the IRS and the other party. If you have good documentation, you should be able to take the dependents and overturn the other filing.
Claim 9 exemptions
Claim nine for the greatest take home pay.
You will likely own more come tax time, but that may depend on other factors.
Keep in mind, The W-4 “worksheet” is virtually meaningless.
It is simply a guide, and “how” you get to 9 exemptions is not submitted to the IRS.
OK, First my qualifications are 10 years as a professional seasonal tax preparer.
First thing is that this is the beginning of November and by your comment you are not yet legally divorced, is that correct? By law, you marital status is what it is as of 12/31/2013. If you are not legally divorced you have problems. If you lived with your spouse any time after June 30, the best you can do is MFS and suffer or grit your teeth and file jointly. If you are legally separated and no joint cohabitation after June, and/or divorced you should be able file as Head of Household (HH). HH requires you to pay at least 50% of house costs after taking out any assistance received and you house/support your children.
So it appears to me that in the old job you were probably claiming Married status and multiple exemptions (5?) so that there was minimum withholding. If you think that you will be qualified for HH status by the end of the year, make sure that is included in your W4 computations as an added exemption. Also there are spots for adding in Child and Dependent Care Expenses as well as Child Tax Credits (all of this depends upon the age of your children). I can easily seeing you claiming 9-10 exemptions if the children are under 16.
Still remember you only have 2 months of this income on your 2013 return if you just started this job. What you do now may have to be reworked at the beginning of next year depending upon circumstances. In your shoes, I would be at a tax preparer office as soon as I had my papers in order. Even if you think your kids are your tax claims as custodial, the IRS rule is first filed gets the credit and the later filer has to dispute the claim.
Hope this helps!
The money in the account gets used in your community, you are are getting a free one year + 3.5 month loan, helps your credit rating, you now have an "emergency" fund, and you're earning interest - all for a minimum amount of effort on your part.
Watch what poor people do (i.e., don't clam any exemptions so they can get a refund in April), and don't do it.
I will add something here, you talk about bus driver route etc., that may help but the key is what address does the school have on record? How about their pediatrician? THOSE are the key records for any dispute with the IRS but filing FIRST keeps the ex from even making that initial claim.
Next, I hear you and agree with using the Ramsey plan. However, if you are computer savvy, any one of the financial programs is a great tool to have. Many of them have decent income tax calculators as well.
Granted this is a bad year for you but once you are back on an even keel, it will get better! Hug your kids and keep the shiny side up! God Bless!
.so consequently, we paid a penalty last year and our tax guy gave us voluntary quarterly tax submission forms to avoid this..
...which we didn't do..
..but we realized a few months ago that my husbands main check was taking very little out and we'd have to owe thousands....so he decreased his w2 to be less than zero to make up the difference.
...what a blow to your net income though..
It used to be true that if you claimed 10 or more exemptions or claimed Exempt on the W-4, employers had to send a copy to the IRS. That is no longer the case. It is I think still the case in some states that have their own withholding certificate.
I would caution however against claiming more withholding exemptions than you are entitled to claim or justify and ending up at the end of the year, well under withheld. That can result in penalties and an IRS Lock In Letter in which they will tell your employer how many exemptions you can claim, overriding any W-4.
Again the idea is to not be over withheld and get a big refund (an interest free loan from you to the government) or to be under withheld and ending up owing a lot or even worse, more than you can afford to pay on April 15th.
Ebxcellent advise. I have experienced what uninformed people do. Had one young man file and owe big time come filing time. I asked how he filled out his W4. He said 4 allowances cause thats how many dependents he had, but the ex claims the kids. I karumba...gave him a quick lesson in the purpose of the W4 and told him to run don’t walk to his HR person at work and update. It is really sad how many low level employees don’t understand payroll and the income tax picture. When I have to speak to employees at my work regarding the W4 form, I always start out by stating to the group...you pay taxes on your income...hence the INCOME TAX..because your government loves you. There is always a few people who suddenly get that startled look of..wait...what, we pay taxes on our income.
I can relate..I’m an independent contractor with my work. I have to remember to make those pesky quarterly estimated payments to cover my tax bill.
Modulo the usual “I am not a tax professional” disclaimer:
You should be able to claim at least four exemptions form withholding if you have three minor children residing with you who receive financial support (or even if any of them are full-time students under, I think 24 years of age, and get at least half their financial support from you: one for yourself, three for the children.
If you itemize deductions, you can also estimate additional exemptions from withholding on the basis of estimated deductions. If you can get a really good handle on your tax liability for the next year, you can even claim one more than the standard calculation method suggests, then ask for an additional amount to be withheld so you end up owing whatever you could conveniently pay in April (up to 10% of your tax liability, but not more to avoid penalties), rather than getting a refund.
You should have been given a W-4 to complete, the purpose of which is to give the employer ballpark amount to withhold.
2 points to remember:
Your tax liability is the same regardless-it’s pay me now or pay me later
If you intend on being an Obamacare scofflaw make sure you have no refund
Take your last year’s tax return. Pay at least the amount of last year net income and other taxes plus 10%. This is exemption before a penalty is incurred for not paying your current year taxes in a timely manner. The remainder of your taxes will be due on April 15.
Review Form 2210 for the rules and other exemptions.
You can adjust your tax withholding with Form W-4, but I would advise you to have a tax accountant help you or review your calculation. It is late in the year and there may already be more than the minimum tax withheld for a W4 adjustment to work for this year. The W4 may need to be revised again for the 2014 year.
That would be for tax year 2014 and tax season of 2015. Not what he is currently working on.
Don’t worry. You will make it all back on your ObamaCare subsidies.
Sometimes the obvious must be stated.
Here’s some tax advice: hire a REAL accountant - one who will charge you REAL money - not some doofus from down the street.
Hire the BEST accountant you can POSSIBLY afford.
It makes a colossal difference.
Now you are free to ignore my advice.
This is in regards to who claims the kids and is exactly correct.
The IRS has a form that is used to predetermine who will claim the kids - one signs away their rights/intent for a particular filing year. When I got divorced, it came in handy because the ex signed it (it was part of the divorce agreement) and then tried to renege. I told her that she might be able to get some court to turn a blind eye to either the divorce document OR the form with notarized signature, but I would not hesitate to spend her alimony money on a lawyer to beat her about the head and shoulders if she kept trying to devise ways to illegally screw with me. She was one of the vicious spite-mongers.
ALWAYS get necessary signatures - "amicable relationship" is usually a ruse to take your guard down...