I'm one of those "suckers who lent the government significant interest free money to the IRS this year," mentioned in my brother's April 15 blog. I am every year. We already have many more withholding exemptions than we have people in our family, and I found myself, this year, when faced with yet another large federal tax refund, contemplating going to 15 on our federal W-4. And then I thought, what does that even mean? Who claims 15 exemptions (besides octo-mom, that is, who doesn't have any income and therefore even she doesn't claim 15)? Does the table even go that high? What do I have to do to get the government to stop over-charging us?
Now, I have to admit, it is nice getting a large infusion of cash every April, but it would be so much nicer to have several hundred more dollars in our pockets every month, along with the interest or investment income that would result. Any suggestions?
You can claim any amount see http://www.irs.gov/pub/irs-pdf/fw4.pdf?portlet=3. Use the worksheet & find the amount to give no refund, you are OK if you are within -10% of the total tax bill, of course then you have to pay that amount on 4/15, but both your dad & brother do! DAD
ReplyDeleteSeems to be a flaw in the system if you have to claim 15 to reduce your withholding enough to not get a refund. Are you sure whoever is doing Scott's payroll is actually figuring it out correctly? (of course you don't ... trust me, you don't even want to know how complex that stupid calculation is). Maybe you need to start your own S-Corp with significant enough profit to make your payroll deductions insignificant.
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