For stupid reasons, I managed to short myself with cash and I have found a few part time jobs through Craigslist.
Mostly these are one day or two day a week type jobs at minimum wage.
Fine, I need what I need.
Now when I go to fill out the forms for the company, I usually declare myself and that’s it.
What I would like to do if possible, is set the number of deductions so that no money, or the least amount of money is taken out for taxes.
Yes, I know I will get hit when I go to file in 2012 for 2011 for not reporting as I go along, you get fined a penalty. But I need every bit of cash now, not in 2012
I always get confused with this. I believe the more people I claim the less they take out right? Or is it the other way around if I declare zero, then they take out less?
If anyone can give me a guideline to fill this out I’d appreciate it.
As I said, I realize I am gonna take a penalty when I go to file the return in 2012 for 2011, but I really need every bit of cash now. Hopefully by 2012 I will have either a job or access to more liquid cash.
If you end up with some gaps in employment you may not face any penalty or last minute shortfall and taxes due even if you put down too many “allowances”. The witholding tables the employer uses you’ll make that same amount of money every pay period for the entire year. If you have any gaps you’ll be overwitheld unless you do exactly what yuo are doing: claim more “allowances” than your household actually has. This is 100% kosher.
More dependants = more deductions = less taxes.
There is a threshhold wherein the employer is required to notify the IRS that you have declared “X” exemptions. The IRS can then notify the employer to change the number of deductions. IIRC, that number is 10.
If you’re really only making minimum wage, declaring 5 exeptions should more than eliminate federal withholding
also must type faster. **bizerta **wasn’t there when I started.
As I recall there’s some extra BS you & the employer have to go through to prove a number higher than 10. This is to prevent folks with higher-paying jobs from skipping on witholding altogether. So stay at 10 or below & nobody can question your decision.
If you want to know what they will withhold from your paycheck for each possible allowance, you can get pub 15 from the IRS: http://www.irs.gov/pub/irs-pdf/p15.pdf. The tables are a little confusing because there are so many possibilities: paid weekly, every other week, twice a month, etc. vs. single, married , etc. But once you find the correct table, it’s real easy.The tables themselves start on pg 38.
Note that others can challenge the number of deductions you claim.
I did this for hundreds of people.
I wrote systems for the local Child Support Collection system. A new law allowed us to have the IRS seize your tax refund check if you owed us past due child support. After the first year this happened, some of the smarter deadbeat parents tried to avoid this by not having any refund check – they upped their number of deductions so no taxes would be withheld the next year. (Just like you are trying to do for a different reason.)
So we filed challenges to those updated W-4’s with the large number of deductions (99 usually; that was the largest number the W-4 form allowed). The IRS then sent both us & the taxpayer a letter stating that the W-4 deductions was in dispute, each of us was required to supply them with evidence for our claim, and – until a determination was made, the W-4 deductions would be kept at the same number as the previous tax year.
Then we sent the IRS a form letter saying “We do not believe person X has that many dependents, this is an extraordinary increase from those listed on last years tax return, and his W-4 claim is an attempt to under-report the proper withholding amount.” Then the person would have to send the IRS some evidence that they actually had that many dependents; they could not do that. Most didn’t even try; the IRS policy that disputed W-4’s would be kept at last years number made this pointless for them.
Not to detract from t-bonham@scc.net’s post, but for low-wage workers, setting 10 exemptions is enough to drive income tax witholding to zero. Going to 99 is silly and attention-attracting.
Not if you pay the taxes owed by April 15th. Which might be a burden, since you would have to cover a full years worth without any deductions over the year. But if you have saved enough cash to be able to pay what you owe, you should be OK.
Let me get this straight: in order to reduce your withholding, you have to lie and claim you have kids that you don’t have. But it’s perfectly fine*, legal, and everyone does it. WTF? Why can’t you just say “I’m expecting to pay X in taxes at the end of the year and I want my withholdings to reflect that”? Such a fucked-up system.
*unless, as t-bonham claims, someone decides to dispute the number you’ve claimed, in which case it’s actually not fine.
It’s not lying. You are not submitting a W4 and promising, claiming, or otherwise stating how many kids you have. The number of dependents is usually indicative of your tax deductions, so it is a useful way to figure things, but if you have higher deductions of some sort (charity, mortgage, etc.), you claim more exemptions. The IRS doesn’t expect or require your number of W4 exemptions to line up to the number of family members, so I don’t see how it is lying.
I won’t argue that the tax system is messed up, but I fail to see how this is evidence of it at all.
**Clark **has it right. What you put on the W4 are allowances, not dependents or deductions. Each “allowance” reduces your witholding by a certain amount.
The W4 form has a worksheet that is essentially a rough draft mini tax return which lets you estimate your annual income and deductions and from that estimate your total tax. The form then leads you to the correct number of allowances to achieve the “correct” amount of witholding from your particular income to pay that tax. Which by default leaves you overwitheld by a bit at the end of the year.
It just so happens that IF you work a single steady job all year, AND you take the standard deduction AND you have dependents, THEN a close-enough-good-enough method is to simply claim the same number of allowances as you have dependents.
Since that situation covers about 75% of US taxpayers, this method makes it real easy for the vast majority of people. Which is why the IRS designed it that way. For most folks no thinking is required: just enter the number of spouse + dependents you have and you’re done.
And for the other 25% of us, there’s the worksheet to get to the same result. Pretty clever actually.