Payroll Withholding

[Triple Threat J]

How can I calculate my withholding allowance to minimize my tax refund and get more of my money in my paycheck each month? 

Thanks!

TTJ

[resolution]

You can use the IRS withholding calculator after its been updated for the new tax year. I don't know when it will be back up though. www.irs.gov/Individuals/IRS-Withholding-Calculator

[Deleted]

Amusing nothing changed in your life, the easiest way is to take your total tax liability from the previous year and divide it by the number of pay periods you have. Tell your payroll department that is how much you want taken from your check each pay period.

You may need to fill out a w-4 with a bunch of exemption (try 10) and put the number you want as supplemental withholding.

[Rocky Mtn Saver]

Personally, I just increased my number of exemptions by 1 until I saw how it affected my pay. If that wasn't enough, I did it again next month. My salary is steady, so once it was adjusted enough, I didn't have to bother Payroll again.

[Rocky Mtn Saver]

Jan 17, 2013 13:02:19 GMT -5 ArchietheDragon said:

Amusing nothing changed in your life, the easiest way is to take your total tax liability from the previous year and divide it by the number of pay periods you have. Tell your payroll department that is how much you want taken from your check each pay period.

You may need to fill out a w-4 with a bunch of exemption (try 10) and put the number you want as supplemental withholding.

FWIW, I wouldn't do 10 exemptions.  I would max it at 9.  It used to be that the employer had to notify the IRS if any employees claimed 10 exemptions on their W-4.  Or so I was told by HR... 

[Triple Threat J]

So one thing I looked at is that my tax refund divided by 12 (# of pay periods) is more than the tax that's taken out of my check each month. If I adjust is that going to adjust the amount of Federal tax I pay to 0?

If the refund is more than I pay in tax yearly is it inevitable that I'll get some kind of refund?

[mwcpa]

"FWIW, I wouldn't do 10 exemptions. I would max it at 9. It used to be that the employer had to notify the IRS if any employees claimed 10 exemptions on their W-4. Or so I was told by HR... "

That is not longer a rule....

"If the refund is more than I pay in tax yearly is it inevitable that I'll get some kind of refund?"
so you get EIC and other credits to offset the tax to zero, meaning even is federal withholding was zero you would get a refund... if so adjust withholding until it is zero....

[Triple Threat J]

Yes I get EIC, have a wife (not working), 2 kids and a house

[Deleted]

Also, can't you set your withholding so you essentially negatively withhold, and get your EIC up front?

[Triple Threat J]

ArchietheDragon good question - I'd be interested to find out if anyone's done that. I'm going to give it a shot with my HR people.

[Rocky Mtn Saver]

It looks like you can't do the Advance Earned Income Credit any more:

www.irs.gov/Individuals/EITC-Home-Page--It’s-easier-than-ever-to-find-out-if-you-qualify-for-EITC

Advance EITC or AEITC news. Legislation signed into law August 10, 2010 repeals the Advanced Earned Income Tax Credit. Recipients will not receive Advance EITC on their paychecks after December 31, 2010. Those who received AEITC on their paychecks during 2010, need to file a tax return to report the amount received.


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[Rocky Mtn Saver]

Archie, how would you 'negatively withhold' You can set it to zero, but negative?

[mwcpa]

Also, can't you set your withholding so you essentially negatively withhold, and get your EIC up front?

at one point one could get an advance on the EITC, but as noted above it was done away with in 2010...you cannot get a cash advance anymore from your employer for EITC

[Triple Threat J]

So once I get federal withholding to zero that's the max I can get added to my check each month - is that correct?

If that's the case I will still be getting a large refund around $1500 - $2000...any way to get that back monthly or will it just have to be considered a refund?

[Rocky Mtn Saver]

TTJ, do you also get a refund from the state?

[Deleted]

Jan 17, 2013 17:05:59 GMT -5 Rocky Mtn Saver said:

Archie, how would you 'negatively withhold' You can set it to zero, but negative?

By doing what you posted in your preview post.

[TheOtherMe]

Jan 17, 2013 17:32:13 GMT -5 mwcpa said:

Also, can't you set your withholding so you essentially negatively withhold, and get your EIC up front?

at one point one could get an advance on the EITC, but as noted above it was done away with in 2010...you cannot get a cash advance anymore from your employer for EITC

There were too many problems with people getting advanced EITC that they were not entitled to have.  Problems with paying it back.  

[Triple Threat J]

Rocky Mtn Saver - I live in TX = no state income tax

[Triple Threat J]

I refinanced my house in December of 2012 and dropped the rate over 2 points - that should have an effect on my taxes right?

[Deleted]

Jan 18, 2013 10:03:00 GMT -5 Triple Threat J said:

I refinanced my house in December of 2012 and dropped the rate over 2 points - that should have an effect on my taxes right?

Yes and no. Since you don't have any tax liability it will not affect your taxes, but the amount of mortgage interest you pay is able to be deducted, if you itemize, so it would be reflected on your itemized deductions.