Tax witholdings

[twinmama85]

Okay, so I have heard MANY people say to not let the gov. use my money for a year and return it to me interest free. Okay, well how do I protect myself from having too little witheld while claiming some exemptions?I used the calculator on irs website but I am still a little confused. Any and all advice would be appreciated.

[spartan7886]

The calculator on the IRS website attempts to get you as close to $0 changing hands in April as possible, assuming the information you input is correct.

You may have to pay if you are off, but if you meet any of the following three safe harbors, you will not owe a penalty.
1) Less than $1000 owed.
2) Over 90% of your taxes paid through withholding.
3) An amount equal to 100% of last year's taxes paid through withholding (this increases to 110% at higher incomes)

If you are worried that your guesses for the calculator are incorrect, check previous years to make sure you estimate interest and dividends properly and account for credits and deductions. I also always assume I will be taking the standard deduction. I am not itemizing by much, so it only affects it a couple hundred dollars, which cancels out because I take their estimate and aim to owe a couple hundred dollars.

[twinmama85]

Well, the problem is our income has changed radically since we've been married. but now it should be stable since im active duty, my husband is in the reserves and has a job. the thing is, our income seems to not stay steady in the least bit. last year i was the only one working. this year we will be pulling in 3 incomes. and to top it off, my husband's job is starting out part time with $9/hr but will shortly be bumped up to full time and i dont even know what his raise will be. the only thing that really is stable is the reserve money and my income this year.

[Deleted]

Jan 27, 2011 15:00:34 GMT -5 twinmama85 said:

Well, the problem is our income has changed radically since we've been married. but now it should be stable since im active duty, my husband is in the reserves and has a job. the thing is, our income seems to not stay steady in the least bit. last year i was the only one working. this year we will be pulling in 3 incomes. and to top it off, my husband's job is starting out part time with $9/hr but will shortly be bumped up to full time and i dont even know what his raise will be. the only thing that really is stable is the reserve money and my income this year.

As your financial situation change you can always change the info on your w4.

I've had the same situation as you somewhat (only person working till september 2010) and our taxable income changed drastically and will be a bigger difference this year.