How much allowances should I claim?
I want to claim 7 allowances, my payroll manager said that was an awful lot. She would not offer any "adivse" or help to determine the numb...
I want to claim 7 allowances, my payroll manager said that was an awful lot. She would not offer any "adivse" or help to determine the number. So am I crazy? Perhaps someone out here can help me out…
I am filing jointly.
I make 000 with 00 annual bonus
My wife makes 000 with no regular bonus
No significant dividends, interest, etc.
Itemized Deductions:
000 Total Mortgage Interest for the year
00 Property Tax
0 Ad Volerum Tax (My State’s "Birthday" Tax)
00 State Tax
0 Charity
0 Car Loan Interest (does this even qualify?)
00 Business Mileage (this was reimbursed, do I still use it?)
00 Health Insurance (this may be pre-taxed?)
50 My 401K contribution (this may be pre-taxed?)
50 My Wife’s 401K contribution (again might be pre-taxed?)
No Children
I am guessing whatever the magic number is that I would do that only one W4, and would claim 0 on the other form…
In response to the third reply:
I was under the impression that deductions were most definitely revelant to Allowances you would claim. Is this not true? Isn’t the point to claim enough allowances so that you are very close to what you actually owe at the end of the year after deductions and credits.
Also, I was about 99% sure the Car Loan, Mileage, 401K, and Health Insurance did not qualify. I just wanted to check.
The deductions you are questioning don’t apply, you’re right. The others add up to roughly $31k. That’s around $20K over the standard deduction, which would translate to around 5-6 extra allowances. The problem is this – the withholding tables severely underwithhold for married couples who both have high incomes, so if you claim all those you are likely to owe a small fortune in tax, plus penalties for underwithholding, when you file your return. I’d go with somewhere around 3-4 total between you and your wife”s W-4′s, split however you want. Even that might not be totally safe, especially if you get hit with AMT and lose some of those deductions.
You can sort of claim what you want to even though you’re signing that what you claim is true and accurate. But you need to be prepared to pay tax at the end of the tax year rather than get a return. Some people who are good savers like to do it that way so they can earn interest on their money before giving it to the government. But if you’re wanting to claim a lot just so you can have more money in your pocket because you can’t save anything, it’s going to backfire spectacularly.
Go to the IRS website and click n the withholdings calculator..it will tell you exactly how many you can claim and still be safe
You should claim 2, one for you, and one for your wife. 401k and insurance are pre-tax. Reimbursed mileage cannot be claimed. Car loan interest doesn’t qualify, only mtge interest, student loan interest, and a couple others. Regardless, those are deductions, not allowances.
Just follow the instructions on the W4.