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Unread 01-07-2012, 05:13 PM
 
64 posts, read 62,043 times
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Default Tax Status Incorrect on Pay Stub

A friend and I were comparing our pay stubs (we work in the same school) and I noticed that our Federal Exemption Statuses were different. We wondered why and it seems that I have been claiming the status of having a dependent. I do not, and never have had, a dependent. I have NOT claimed dependents on my federal tax returns. However, I am worried about how this has been affecting my paychecks and if it has affected my IRS returns/what I might owe. I have contacted my HR but, being a Saturday, I won't really be able to talk to them until Monday.

Does anyone have any ideas on how this could have/will affect my paychecks and/or tax claim? I guess I'm just kind of freaking out because I've worked at this school for three years and, knowing little to nothing about paying federal taxes, I'm a little worried that I'll owe a ton of money to someone!

Any words of wisdom?
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Unread 01-07-2012, 05:30 PM
 
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Don't worry about it too much. Claiming more exemptions is always better than claiming more. That way your paychecks are larger because you're getting more money upfront. Since your paychecks are larger you'll owe more (or get back less) when you file your taxes, but in the end it will all be the same met.

Generally the rule of thumb is to pay the least in taxes upfront and pay it all at the end. That way you aren't giving the IRS a free loan.
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Unread 01-07-2012, 06:27 PM
 
Location: Alexandria, VA
5,003 posts, read 7,809,594 times
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Quote:
Originally Posted by NJBest View Post
Don't worry about it too much. Claiming more exemptions is always better than claiming more. That way your paychecks are larger because you're getting more money upfront. Since your paychecks are larger you'll owe more (or get back less) when you file your taxes, but in the end it will all be the same met.

Generally the rule of thumb is to pay the least in taxes upfront and pay it all at the end. That way you aren't giving the IRS a free loan.
Claiming more is always better than claiming more???????
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Unread 01-07-2012, 08:50 PM
 
Location: SF Bay Area
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Withholding is just an estimate of your income tax liability; your actual tax liability is independent of what you have on your W-4 (though if you under-withhold by a lot without making quarterly payments, you could be liable for penalties). Having one extra allowance on your W-4 isn't a big deal.

Note that allowances (on your W-4) are NOT the same as exemptions (on your tax return). You change your allowances as you like on your W-4 to adjust how much is withheld on your paycheck. The number of exemptions that you are allowed on your 1040 form are specified by the tax code.
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Unread 01-07-2012, 10:47 PM
 
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Quote:
Originally Posted by Flamingo13 View Post
Claiming more is always better than claiming more???????
Oops, typo. Claiming more allowances on W-4 is always better than claiming less..... ofcourse with the exception of a scenario where you are careless with your money. It will all even out in the end.
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Unread 01-08-2012, 06:57 AM
 
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What you "claim" on your paycheck is only telling your HR department how much you want taken out in taxes each year. That is totally up to you. The only real consequence is if you don't have ENOUGH withheld you could be subject to a 10% penalty on your tax return (which doesn't sound like it will be an issue). You can claim 10 dependents if you wanted and as long as you have enough deductions to keep you out of the above penalty, it doesn't matter how many kids you have.

The "goal" is to get your withholdings to such that you don't owe much and you don't get too much back. If you are not a good saver though, having a bit more taken out of your paycheck isn't a bad idea as long as you put that refund into a savings account, etc. The amount of interest lost on doing that is very minimal so don't worry about that really. If you are a good saver and will put that extra $20 or 30/paycheck into the bank, get your withholding down to a point where you won't owe much or get back too much.
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Unread 01-08-2012, 02:39 PM
 
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That makes sense, thank you. I appreciate it!
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Unread 01-09-2012, 03:42 PM
 
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When you file that is the time to declare dependants... You mostl ikely will owe taxes because they didnt take enough out because you have no kids to claim...
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Unread 01-09-2012, 04:19 PM
 
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Originally Posted by Falconman View Post
When you file that is the time to declare dependants... You mostl ikely will owe taxes because they didnt take enough out because you have no kids to claim...
Thanks. I actually had this status for 3 years now (had no idea what it meant- pay stubs can be so damn confusing sometimes) and got a small refund each year. This does explain why my friend with the same job, also single, no kids, same salary, gets a bigger refund than I do!
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Unread 01-09-2012, 04:47 PM
 
Location: North Metro Atlanta
3,971 posts, read 4,417,072 times
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yes, thats why he getting a big refund. But you should Plan it so you get next to no refund, or pay a little each year. A refund its FREE load to the Goverment, that you are giving them.
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