U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 11-16-2011, 09:17 PM
 
39 posts, read 59,350 times
Reputation: 39

Advertisements

Lets say somebody makes $20,000 per month. But they work 6 months a year filing single.

So if you worked 12 months a year you would make $240,000 (62,000 Federal tax owed, 33% bracket, $5166 per month to pay tax )

However, this person works 6 months a year making $120,000 (25,000 Federal owed, 28% bracket, $4166 per month to pay tax)

When federal tax is taken out of each pay check in the 6 month situation would the federal tax be taken from each check like you are going to make $240,000 per year?

Would they be setting up for a massive refund working 6 months a year?

Is it possible to claim a high exemption...say 10 to reduce the amount of federal tax from each check?

However, at the end of the tax year you would be very close to owing zero in taxes.

Thoughts?
Rate this post positively Reply With Quote Quick reply to this message

 
Old 11-16-2011, 09:24 PM
Status: "Enjoying the winter" (set 14 days ago)
 
Location: East of Seattle since 1992, originally from SF Bay Area
33,970 posts, read 61,772,401 times
Reputation: 37883
The IRS won't care how many exemptions you claim as long as you don't owe a balance at the end of the year. If you come up short they can add penalties to the amount due for under-withholding. ny good tax guy can help you calculate the correct number of exemptions to do on the W-4 so that you get a small refund at tax time.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 11-16-2011, 09:43 PM
 
39 posts, read 59,350 times
Reputation: 39
More googling has yielded "Annualized Income Installments " it seems like you can pay your tax in four payments over a year....not sure though.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 11-22-2011, 12:28 PM
 
39 posts, read 59,350 times
Reputation: 39
Well after some numbers crunching it seems like 8 exemptions should even things out come tax time.

I did find a great calculator in the process though.

http://www.adp.com/tools-and-resourc...alculator.aspx
Rate this post positively Reply With Quote Quick reply to this message
 
Old 11-22-2011, 12:34 PM
 
28,900 posts, read 49,123,999 times
Reputation: 46320
You know, I think I would be asking a really good accountant these kinds of questions, rather than a bunch of yahoos on a message board. Because saying, "CPG35223 thought I was in pretty good shape doing that" won't cut it in tax court.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 11-22-2011, 01:59 PM
 
Location: Central Texas
13,719 posts, read 27,179,703 times
Reputation: 9241
Quote:
Originally Posted by cpg35223 View Post
You know, I think I would be asking a really good accountant these kinds of questions, rather than a bunch of yahoos on a message board. Because saying, "CPG35223 thought I was in pretty good shape doing that" won't cut it in tax court.
True - but nothing the OP does with exemptions is gonna put him in tax court unless he pulls a Wesley Snipes.

Sales people often have very inconsistent income - big commission checks in the fourth quarter for example. So it is perfectly reasonable to adjust exemptions.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Similar Threads

All times are GMT -6. The time now is 01:33 AM.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top