Should I claim 0 or 1 on my taxes? 2010, 2011 withholding calculator can save (make) you money
This article will show you how to decide what you need to claim depending on your filing status (married, single, etc.), income, amount of dependents, deductions and various other factors in an easy to understand manner that will save you (make you) money that you’ve most likely been throwing away. With tax season coming up in the very near future, and many having the opportunity to change their payroll deductions, it makes sense to revisit this topic, as far too many have overcomplicated this subject and are simply screwing themselves out of money as a result.
Many people understand that by claiming 0 (zero) they will increase their chances of getting a refund back at the end of the tax year, but is that really the best thing to do? Definitely not, I’ve talked about why that’s silly in an article I wrote a while back, in doing that, you’re giving the government an interest free loan on your money, when you could be earning interest on that money yourself.
If you are an employee, the Withholding Calculator below can help you determine whether you need to give your employer a new Form W-4, Employee’s Withholding Allowance Certificate to avoid having too much or too little Federal income tax withheld from your pay. You can use your results from the calculator to help fill out the form.
Who Can Benefit From The Withholding Calculator?
- Employees who would like to change their withholding to reduce their tax refund or their balance due;
- Employees who may need to increase their withholding due to the Making Work Pay provision in the American Recovery and Reinvestment Act of 2009, that caused changes to the federal income tax withholding tables and may result in too little tax being withheld;
- Employees whose situations are only approximated by the worksheets on the paper W-4 (e.g., anyone with concurrent jobs, or couples in which both are employed; those entitled to file as Head of Household; and those with several children eligible for the Child Tax Credit);
- Employees with non-wage income in excess of their adjustments and deductions, who would prefer to have tax on that income withheld from their paychecks rather than make periodic separate payments through the estimated tax procedures.
CAUTION: If you will be subject to alternative minimum tax, self-employment tax, or other taxes; or if any of your current jobs will end before the end of the year, you will probably achieve more accurate withholding by following the instructions in Publication 919, How Do I Adjust My Tax Withholding?
Tips For Using This Program
- Have your most recent pay stubs handy.
- Have your most recent income tax return handy.
- Estimate values if necessary, remembering that the results can only be as accurate as the input you provide.
To Change Your Withholding:
- Use your results from this calculator to help you complete a new Form W-4, Employee’s Withholding Allowance Certificate.
- Submit the completed Form to your employer.
Here is the IRS’ nifty withholding calculator.
You should try to have your withholding match your actual tax liability because if not enough tax is withheld, you will owe tax at the end of the year and may have to pay interest and a penalty.