I am a full-time university student who lives in New York, and have a job for the summer. I am fully supported by my parents, and will have no other independent source of income this year outside of this 2-month job, which should net me in the vicinity of $3000.
I was told that if I wrote down “EXEMPT - 99” on a certain part of my W-4 form (as per the instructions on it), I would not have to pay federal or state taxes on this income, as my personal income is less than a certain amount. On my first paycheck, though, these deductions were taken off.
Can someone clarify the law on this point? Thanks.
I’m not absolutely sure, but I think they changed the rules within the past few years. Looking at the instructions I have for a 2001 1040EZ, it looks like if someone else is supporting you (and therefore is claiming you) you lose your personal exemption and have only a $750 standard deduction, leaving most of that $3000 income taxable.
I am not an accountant, nor do I do my taxes correctly. However, I just checked the W-4 on the irs’ web site, and I quote:
In my case when I wore your shoes, I could avoid taxes by taking myself as a dependant. The catch is that my parents couldn’t, and “we” would wind up paying more in taxes.