Mark Bole <ma...[at]pacbell.net> wrote:
- quote -

I said in prior post: "Next year divide this year's tax (or
110% of it). Divide that by number of paychecks. Tell
peresonalle to deduct that amount."

It should have read: "Next year (2008) divide 2007 tax (or
110% of it) by the number of paychecks in 2008 and have
Personelle withhold that amount from each paycheck".

ed

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<jgearyiii[at]yahoo.com> wrote:

- quote -


There is no rule of thumb per se.
There are various methods to compute how much should be
withheld from each paycheck. A good starting point is to
read the instructions on form W4 & inquire of your CPA/tax
advisor what is most appropriate to your case. The
perspective of withholding is to cover your tax liability,
not to overpay it. You should withhold enough to avoid
penalties and pay the balance next April.

Getting large refunds each year is poor tax planning (to put
it politely). A large refund is giving the government and
interest free loan. Better to owe on April 15th - but not
pay a penalty.

You should also apply the above to your state income tax
situation. If you're not subject to AMT, you may want to
consider pre-paying the state liability on Dec 31st, to get
the deduction a year earlier.

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

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Newsgroups: misc.taxes.moderated

jgearyiii[at]yahoo.com wrote:

- quote -

If you are counting on an annual income tax refund to pay down your
credit card debt, you will most likely fall behind each year. While it
may be a good idea to minimize your refund by adjusting your
withholding, will the extra money in each paycheck be used to pay your
credit card bill in full?

-Mark Bole

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

jgeary...[at]yahoo.com wrote:

- quote -

Try estimating your full year's tax and subtract $1,000. If
less than that, use last year's tax (110% of last year's tax
if your AGI was over $150K last year). Subtract withholding
to date, divide the remainder by the number of paychecks yet
to come. Have personalle add enough to your present
withholding amount to meet that amount. You'll owe at least
$1,000 next April but won't have a underpayment penalty.

Next year divide this year's tax (or 110% of it). Divide
that by number of paychecks. Tell peresonalle to deduct
that amount.

ed

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

jgearyiii[at]yahoo.com wrote:

- quote -

No "rule of thumb", but there are rules which you'll find on
the form W4 itself. get a copy of it and see what's the
maximum allowable. From what you say above, and with no
other facts, you qualify for at least 5 allowances (NOT
exemptions.) If the two kids qualify for the child tax
credit, make that at least 7 allowances.

ChEAr$,
Harlan Lunsford, EA n LA

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

jgeary...[at]yahoo.com wrote:

- quote -

Read and follow the instructions that come with your W-4
form.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

<jgearyiii[at]yahoo.com> wrote

- quote -

What are you claiming now? Should be like married and four,
but could be higher to account for deductions and credits.
See if you can talk to someone at your employer in HR
(payroll) that can tell you how much more take-home you
would have as you increase your allowances. Remember,
federal and state allowances can be different, and
especially today with the child tax credit at the federal
level.

--
Paul A. Thomas, CPA
Athens, Georgia

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

You may have to pay a penalty if you owe more than
$1000 in taxes. The IRS automatically computes
the 2210 penalty form for you and sends you the bill.
That same form describes several ways owing more
than a thousand DOESNT always trigger a penalty.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

<jgearyiii[at]yahoo.com> wrote:

- quote -

There's even a worksheet on the W-4, which you can get from
your employer. Make sure you work through the entire thing.
At a bare minimum you should be claiming four withholding
allowances, assuming you don't have a lot of income not
subject to withholding.

--
Phil Marti
Clarksburg, MD

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Is there a rule of thumb for the excemptions you claim for
your paycheck? I have a wife that stays home and two
children. I would rather get more a paycheck and get close
to braking even at tax time than waiting all year for a
refund then end up using that to pay off credit cards.
Anyone out there doing this? I would be thankful for any
advice on the subject.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >