Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I realize that this is probably a basic questions, but I couldn't find anything that directly addressed it. I bought a house at the beginning of 2000, am married and we are expecting our first baby in March 2001. Since I have little concept of how much refund I will get, I have just left my tax exemption at 1. What should I up this to, or where can I find a calculation sheet to help me make an educated judgement on how much I should have withheld vs. getting paid out in each pay check. I am asking this both in light of our new home and considering alternative income scenarios for my wife (continue working full-time, part-time or not at all). Thank you for your help.
Print the post Back To Top
No. of Recommendations: 0
I realize that this is probably a basic questions, but I couldn't find anything that directly addressed it. I bought a house at the beginning of 2000, am married and we are expecting our first baby in March 2001. Since I have little concept of how much refund I will get, I have just left my tax exemption at 1. What should I up this to, or where can I find a calculation sheet to help me make an educated judgement on how much I should have withheld vs. getting paid out in each pay check.

As a first step, use the Deductions and Adjustments Worksheet that is attached to Form W-4. You can download/view that here: http://ftp.fedworld.gov/pub/irs-pdf/fw4_00.pdf.

The more exact way to do it is to estimate what your taxes will be. Then, get Publication 15 Circular E (available here: http://ftp.fedworld.gov/pub/irs-pdf/p15.pdf) and compute exactly what your employer will withhold at each exemption level. This way you can precisely adjust the withholding exemptions to achieve the withholding that you want.
Print the post Back To Top
No. of Recommendations: 1
<<Since I have little concept of how much refund I will get, I have just left my tax exemption at 1. What should I up this to, or where can I find a calculation sheet to help me make an educated judgement on how much I should have withheld vs. getting paid out in each pay check.>>

Check the EDCO website at http://www.edcosoft.com

Ed has a good website to help you with your computations.

TMF Taxes
Roy

Print the post Back To Top
Advertisement