Comments on: 3 Reasons why Tax Refunds are Bad & how Allowances can Help

By: j

Wed, 29 Jun 2011 15:02:01 +0000

this is an oversimplification of the trade-offs involved. I save 40% of my income so I would use this approach. However, most Americans do not. As a rule they spend 113% of what they earn in their paychecks. If it were not for this financial babysitting many people would be further in debt, than they already are.

By: Natalie

Natalie — Sun, 30 Jan 2011 16:38:43 +0000

amen brother!

By: Natalie

Natalie — Sun, 30 Jan 2011 16:35:42 +0000

This is between you and payroll, not you and the IRS. The IRS will only get involved if, when you file your return, you owe more than $1000 and 10% of total tax owed. Look at the rules for underpayment penalties. The IRS doesn’t know or care how many exemptions you told payroll to do. Some companies require that you make the request in person if you are claiming a large number of exemptions. I’m sure if you show payroll your numbers they will cooperate.

By: Natalie

Natalie — Sun, 30 Jan 2011 16:22:16 +0000

I think these figures are a little skewed by EIC. I see people all the time with low income who have 2 or three kids and get 6k back on their taxes. (Yes I’m a tax preparer). They certainly didn’t pay in that much, but with 3 alternative child tax credits and EIC it adds up quickly. These people use the money to survive. They are usually late on rent and bills and this is their only opportunity to catch up. The high figure is generally not coming from young professionals who pay in too much.

By: Natalie

Natalie — Thu, 27 Jan 2011 05:21:29 +0000

JP, or anyone in this situation, you deduct alimony paid from your income come tax time, but not child support. So be very clear about what you are paying for each.

For example, you have 80k income and you are paying 30k in support, but only 10k is alimony. You should probably claim single with 3 or 4 exemptions. The standard exemption is currently $3650 so for each $3650 that you are paying in *alimony* you should increase your withholding by one exemption.

To rightfully claim 20 exemptions, you would have to be paying 73k per year just for alimony. If this is the case, do it.

By: Samsung plasma hdtv

Samsung plasma hdtv — Sun, 27 Jun 2010 17:09:59 +0000

We must pay tax, but never increase tax will make our country become a great place for all citizen.

By: create pay stub

create pay stub — Mon, 14 Jun 2010 07:17:08 +0000

We must play on our duty, the citizen must response to pay tax, in order to develop their country. Also if they have a right to refund their tax, the action must be done too (get money back or give it to gov are choices). Avoiding tax is not the option for good people to do.

By: Article Directory

Article Directory — Fri, 04 Jun 2010 05:36:48 +0000

No tax is very great with many people, but how the government can life without money?

By: Sean Kennedy

Sean Kennedy — Wed, 19 May 2010 00:56:41 +0000

I would serious consider contacting your accountant before doing that. It seems like an awful lot of allowances to be claiming on payroll.

By: jp

jp — Sun, 25 Apr 2010 17:34:26 +0000

I’m getting divorced and we have one child. I make about 80k more than my wife and our mediator told us that I should declare single on my taxes, claim 2 for me and my son, and claim 20 withholding allowances to boost my salary and pay the child support and spousal support. Does anyone know if this seems right? THe mediator claims that I still will not owe any taxes at the end of the year. She says my wife should claim head of household, and let me claim our son, and that it will work because I can deduct sopusal support.

Any advice greatly appreciated.