The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Personal Exemption||Date: 2/9/2001 8:13 AM|
|Author: LooseChange||Number: 46016 of 125206|
This is certainly not the only way to do it, but I had pretty good success using TurboTax's tax planning calculations (I know it's available in the Deluxe edition, not sure about the other edition). I got married last year in May, so both my wife and I had already had taxes held at the single rate. We were in different tax brackets while single, I had a mortgage and capital gains/interest/dividends to consider and the calculation was a bear to do by hand.
TurboTax asked all of the questions (including the amount of taxes already paid) and figured everything up for us so we would run out right at the end of the year. The result was one that I didn't expect (it said to list my wife as married but tax her at the single rate with 1 exemption and tax me as married with 3 exemptions).
I'm not completely done with the return this year (I am done with the income), but it looks like TurboTax nailed it for me. Just an option for you.
If you want to do the calculation by hand, go get Publication 15 from www.irs.gov (which shows how employers will take out taxes for the year) and start backfiguring based on your situation. If your situation is not complicated, then it would only take an hour or so to complete this task (most of the time spent wading through the publication).
Do NOT use the IRS's online W-4 calculator. I used this thing to compare with TurboTax's results, and it had me WAY OVERPAYING for the year (how convenient for the IRS).
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