I am not asking for advice in lieu of going to an accountant, but I wonder if anyone else has gone through this.
2005 was my first full year owning a home. It’s in San Francisco, so it’s expensive. Therefore, I had huge deductibles on my income taxes this year, and I am getting a juicy refund. All well and good so far.
I want to adjust my withholding so I will withhold enough less per week so that there will be only a small refund next year. I think I can do a better job of saving and investing my money than leaving it at 0% interest with uncle sam. So I hied me to payroll to change my W-4.
When I use the worksheet on page 2 of the W-4, it says I should take 10 deductions! :eek:
When I looked at the withholding tables available from the gov’t online, it seemed to figure out that I should take 5 deductions.
I’m playing it safe with 5, and after my next paycheck I should be able to tell if that was right. But I wish I didn’t have to play this game. Why is it so hard? And does anyone have a reliable way to figure this out (other than the trial and error approach that I’m already using)?