regarding IRS W-4 form
Q.I have a question concerning the IRS W-4 form that is filled out prior to employment! I'm single and was wondering if I can enter any # in the amount of persons I claim (to lighten the federal tax hit I take within the year)? I normally enter a "0" (claim no one) in this field which means the government takes the most taxes possible. well I was wondering if a single person can "legally" enter a "2" or even a "3" in this field so the government doesn't take as much off. I'm tired of paying all the extra money in during the year and then recieving large returns ($500.00+) every year and would rather bank the extra money saved in Federal tax during the year and owe a hundred or so dollars at the end of the year. Is this legal and by doing this will I get more per week?
A.You may want to consider READING THE INSTRUCTIONS for the W-4. They tell you that when in doubt, to use the worksheet on the form. They also have that thing about pains and penalties of perjury for making a false statement. Yes, it's absolutely legal. You claim allowances on Form W-4 which are nothing more than mathematical integers used by your employer to calculate how much federal income tax to withhold from your salary. On your Form 1040, if you are single and cannot be claimed as a dependent by anyone else, you are entitled to claim one personal exemption for yourself. The number of personal exemptions you can claim is governed by law, but the law is silent on the number of allowances you claim on Form W-4- except in the indirect sense that you make yourself vulnerable to an estimated tax penalty if you claim so many that you are substantially underwithheld. You will avoid an estimated tax penalty as long as your withholding equals AT LEAST: 1. 100% of your prior year (i.e. 1999) tax, or 2. 90% of your current year (i.e. 2000) tax, or 3. leaves you owing $999 or less For more information, go to the IRS web site at www.irs.gov and download Publication 919.
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