brahms@spp5.UUCP (Bradley S. Brahms) (02/25/86)
[}{] At the beginning of this year, my wife and I moved into a new house. Of course, the intestest part of the paryments are tax deductible. Is it legal to increase the number of deductions on a W-4 so that we won't have to have a huge tax refund at the end of the year? I hate given interest free loans! If so, how do I go about figuring how many deductions to take? Ask our local company employee office? Thanx. -- Brad Brahms usenet: {decvax,ucbvax,ihnp4}!trwrb!trwspp!brahms arpa: Brahms@usc-eclc
deacon@ihu1g.UUCP (j m deacon) (02/27/86)
> course, the intestest part of the paryments are tax deductible. Is it > legal to increase the number of deductions on a W-4 so that we won't have > to have a huge tax refund at the end of the year? I hate given interest As far as I know, you can claim anything you want on your W-4. Many people I know claim 0. -- Jim Deacon ihnp4!ihu1g!deacon
joepwro@ihopa.UUCP (Joe Wroblewski) (02/27/86)
> [}{] > Is it > legal to increase the number of deductions on a W-4 so that we won't have > to have a huge tax refund at the end of the year? > how do I go about figuring how many deductions to take > Definitely, The W-4 usually comes with a work sheet to help you figure out how many deductions you should take. I personally claim 10 deductions (which was calcualted using the work sheet) and I usually come very close to paying the right amount (+/- $100). Joe P. Wro
spock@iham1.UUCP (Ed Weiss) (02/27/86)
In article <104@spp5.UUCP>, brahms@spp5.UUCP (Bradley S. Brahms) writes: > [}{] > At the beginning of this year, my wife and I moved into a new house. Of > course, the intestest part of the paryments are tax deductible. Is it > legal to increase the number of deductions on a W-4 so that we won't have > to have a huge tax refund at the end of the year? I hate given interest > free loans! If so, how do I go about figuring how many deductions to > take? Ask our local company employee office? Thanx. > > -- Brad Brahms > usenet: {decvax,ucbvax,ihnp4}!trwrb!trwspp!brahms > arpa: Brahms@usc-eclc I believe you easily take up to 15 deductions. If you want to take more than that it gets complicated. (They want PROOF.) This is what I did: I managed to acquire a copy of the tables employers use to compute how much tax is to be withheld. You should be able to get a copy of these tables or the formula from your payroll department. I then figured out how much my taxes would be the next year (given my approximate salary for the coming year, the amount of interest I would pay, and assuming the tax rates would be the same). Then I used the tables to see how many deductions I could take and still have the correct amount of tax withheld. I then subtracted 1 from that number of deductions to be safe. The above worked for me. You can adjust your deductions during the year if your calculations are not working out (or one of the variables changes). I suggest that you make sure Uncle Sam OWES you some money at the end of the year. I believe you are more likely to be audited if you owe money. Good luck. -- Ed Weiss ihnp4!iham1!spock --> Live Long and Prosper <--
szyld@duke.UUCP (Daniel B. Szyld) (02/28/86)
Regarding increased excemptions to avoid a large refund... Simply file a new W-4 with your employer. The form has instructions which are easy to follow. Essentially you estimate your deductions and the form gives a formula for the number of exceptions to claim. There is absolutely no relationship between that and the excemptions to be claimed in your 1040. The only detail to have in mind is not to own too much, and thus avoid a penalty. Another warning: After 10 exceptions, there is no difference in the witholding (I think) AND the IRS flags you in case you are a tax protestor. -- Daniel B. Szyld, Dept.of Computer Science, Duke University, Durham NC 27706-2591. Phone (919)684-3048. Telex 802829 DUKTELCOM DURM CSNET: szyld@duke UUCP: {ihnp4!decvax}!duke!szyld ARPA: szyld%duke@csnet-relay or na.szyld@su-score
brahms@spp5.UUCP (Bradley S. Brahms) (03/02/86)
[}{] First, I would like to thank all those that replied to my query. I have tried to reply to everyone but may have left a couple off. Second, my query was to find out if it was possible/legal to increase the number of deductions to offset the interest paid on a mortgage. Well, the answer is yes. Evidently on the back of the W-4 is a worksheet that can be used to calculate the number of deductions to take. Again, I wish to thank all those the responded. -- Brad Brahms usenet: {decvax,ucbvax,ihnp4}!trwrb!trwspp!brahms arpa: Brahms@usc-eclc
king@kestrel.ARPA (Dick King) (03/02/86)
From: szyld@duke.UUCP (Daniel B. Szyld) Newsgroups: net.taxes Date: 28 Feb 86 14:11:39 GMT Reply-To: szyld@duke.UUCP (Daniel B. Szyld) Distribution: net Regarding increased excemptions to avoid a large refund... Simply file a new W-4 with your employer. The form has instructions which are easy to follow. Essentially you estimate your deductions and the form gives a formula for the number of exceptions to claim. There is absolutely no relationship between that and the excemptions to be claimed in your 1040. The only detail to have in mind is not to own too much, and thus avoid a penalty. Another warning: After 10 exceptions, there is no difference in the witholding (I think) AND the IRS flags you in case you are a tax protestor. -- Daniel B. Szyld, Dept.of Computer Science, Duke University, Durham NC 27706-2591. Phone (919)684-3048. Telex 802829 DUKTELCOM DURM CSNET: szyld@duke UUCP: {ihnp4!decvax}!duke!szyld ARPA: szyld%duke@csnet-relay or na.szyld@su-score There is no threshold above which the effect of claiming additional exemptions vanishes (except, of course, when no income is withheld). Copies of W4 forms claiming more than 14 (not 10) exemptions are sent to the IRS, but it doesn't seem to do any damage. They probably WILL get on your case, however, if you end up owing them substantial money. You are never in trouble if either 1> you have withheld at least 80% of your taxes, or 2> you have withheld at least as much as you owed last year. -dick
miorelli@pwa-b.UUCP (BoB Miorelli) (03/04/86)
The tables the employers use to figure deductions are in `Circular E' published by the IRS. The formulas are quite simple and I will be willing to post them to the net if there is sufficient interest. -- -->BoB Miorelli, Pratt & Whitney Aircraft also, H & R Block tax perparer and Instructor pwa-b!miorelli