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Author: bigcaat Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121095  
Subject: Deductions Date: 7/14/2011 12:29 PM
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Hi.

My husband is going to receive a sizable bonus in his August check since they are unable to give him a raise this year. His current tax withholding statements says he claims one personal allowance (are those dependents)?

It was suggested that for that one month he could change his dependents so that he would not get most of it taken away for that month. We really need the money right now.

Is that advisable? If so, how many allowances can he claim, etc. We do own a house so we get a mortgage deduction on our taxes, if that makes any difference.

Thanks,
Caat
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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 113677 of 121095
Subject: Re: Deductions Date: 7/14/2011 7:23 PM
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My husband is going to receive a sizable bonus in his August check since they are unable to give him a raise this year. His current tax withholding statements says he claims one personal allowance (are those dependents)?

No, they're withholding allowances. See Form W-4.

It was suggested that for that one month he could change his dependents so that he would not get most of it taken away for that month.

This is why I hate passive voice. WHO suggested it? If it wasn't his payroll people he should go to them and ask how withholding from the bonus will be calculated. The employer has a choice, one of which is to use a flat 25% for Federal tax. If he has an influence over it he should ask them to use that method, which is unaffected by withholding allowances.

We really need the money right now.

Is that advisable? If so, how many allowances can he claim, etc. We do own a house so we get a mortgage deduction on our taxes, if that makes any difference.


The following is totally unrelated to the bonus. If you need cash so badly, why is he claiming only one withholding allowance? I'm guessing that you get large refunds when you file, having lent your cash to the gummint interest-free. Sit down with the W-4 (he can get it from payroll) and figure out how many allowances he could be claiming with you still winding up with a small balance due or refund.

Phil
Rule Your Retirement Home Fool

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