Withholding Question for Next Year

[Bubbz]

This year I claimed my child in taxes (since only one divorced parent can). In 2016, her mother will. The trouble is her mom is a little sketchy and who knows if she'll even file next year.

What if I set up my W-4 as if I planned to claim my daughter next year?

What happens if her mother does file and I don't claim her when I file?

Do I get money back?

I understand this is a message board, I just can't find any info online about this situation.

 

[ncnole1975]

If you set it up as if you planned to claim her, then your withholding should be less right? Taking into account her deduction. If you don't take it, then you would be in a situation where you didn't withhold enough... There wouldn't be anything to "get back"


Posted from Rivals Mobile

 

[Fijimn]

Maybe adjust your W-4 as single with no dependent so that you w/h is on the mark (assuming you do not have other considerations). If she does not file taxes, you could amend you 1040.

 

[OrlandNole]

Originally posted by Bubbz:

What if I set up my W-4 as if I planned to claim my daughter next year?

What happens if her mother does file and I don't claim her when I file?

Do I get money back?

Actually, it's the opposite. If you claim one less dependent when you file, you'll owe money.

 

[Bubbz]

Thanks guys - so to play it safe I should adjust to claim myself but 0 dependents.

That way if I do claim her, I'll get a little more more than expected but if I don't there will be no surprises.

 

[OrlandNole]

Originally posted by Bubbz:
Thanks guys - so to play it safe I should adjust to claim myself but 0 dependents.

That way if I do claim her, I'll get a little more more than expected but if I don't there will be no surprises.

That's what I would do.

 

[Bubbz]

Thanks

 

[F4Gary]

You should be adjusting your withholding so you get close to zero back.

 

[seminoleed]

Originally posted by F4Gary:
You should be adjusting your withholding so you get close to zero back.

This. I try to always break even or owe up to a thousand. That way I've had my money to use as I see fit without the government holding it interest free all year.

 

[BooneNole63]

Originally posted by seminoleed:

Originally posted by F4Gary:
You should be adjusting your withholding so you get close to zero back.

This. I try to always break even or owe up to a thousand. That way I've had my money to use as I see fit without the government holding it interest free all year.

This. You can claim as many exemptions as you want on your W-4. It's simply a tool to help you and your employer figure out how much to deduct from your check to not owe money at the end of the year.

Without penalty, you could claim 12 exemptions and have little tax deducted from your paycheck. Just be smart enough to know how much to save so you can pay your big tax bill in April. You get to earn interest on your money instead of Uncle Sam.

 

[Fijimn]

Originally posted by BooneNole63:

Originally posted by seminoleed:

Originally posted by F4Gary:
You should be adjusting your withholding so you get close to zero back.

This. I try to always break even or owe up to a thousand. That way I've had my money to use as I see fit without the government holding it interest free all year.

This. You can claim as many exemptions as you want on your W-4. It's simply a tool to help you and your employer figure out how much to deduct from your check to not owe money at the end of the year.

Without penalty, you could claim 12 exemptions and have little tax deducted from your paycheck. Just be smart enough to know how much to save so you can pay your big tax bill in April. You get to earn interest on your money instead of Uncle Sam.

I know you guys are saying this based on the principle...but, because you have to keep your money liquid to pay the tax bill, you are literally talking about 6 to 9 dollars in interest. If you calculate real return rate after fees and your time, I'm not sure you come out ahead....other than being pissed off at the gobermint on April 15th or what ever date you pay if you file for extension.

 

[SeaPA]

Originally posted by BooneNole63:

Originally posted by seminoleed:

Originally posted by F4Gary:
You should be adjusting your withholding so you get close to zero back.

This. I try to always break even or owe up to a thousand. That way I've had my money to use as I see fit without the government holding it interest free all year.

This. You can claim as many exemptions as you want on your W-4. It's simply a tool to help you and your employer figure out how much to deduct from your check to not owe money at the end of the year.

Without penalty, you could claim 12 exemptions and have little tax deducted from your paycheck. Just be smart enough to know how much to save so you can pay your big tax bill in April. You get to earn interest on your money instead of Uncle Sam.

Not really true; generally you have to cover 90% of your tax liability via either withholding or quarterly estimates or you are subject to an underpayment penalty. There are a variety of exceptions, along with a number of ways to avoid or minimize the penalty.

 

[Fijimn]

Originally posted by SeaPA:

Originally posted by BooneNole63:

Originally posted by seminoleed:

Originally posted by F4Gary:
You should be adjusting your withholding so you get close to zero back.

This. I try to always break even or owe up to a thousand. That way I've had my money to use as I see fit without the government holding it interest free all year.

This. You can claim as many exemptions as you want on your W-4. It's simply a tool to help you and your employer figure out how much to deduct from your check to not owe money at the end of the year.

Without penalty, you could claim 12 exemptions and have little tax deducted from your paycheck. Just be smart enough to know how much to save so you can pay your big tax bill in April. You get to earn interest on your money instead of Uncle Sam.

Not really true; generally you have to cover 90% of your tax liability via either withholding or quarterly estimates or you are subject to an underpayment penalty. There are a variety of exceptions, along with a number of ways to avoid or minimize the penalty.

Damn, SeaPa, no homies won't be buying that big mac value meal with all that interest they earned....

 

[Formerly Rockymtnole]

Originally posted by Fijimn:

I know you guys are saying this based on the principle...but, because you have to keep your money liquid to pay the tax bill, you are literally talking about 6 to 9 dollars in interest. If you calculate real return rate after fees and your time, I'm not sure you come out ahead....other than being pissed off at the gobermint on April 15th or what ever date you pay if you file for extension.

Yeah, agreed. It makes sense on principle but the difference is negligible. And the reality is many do not "invest" or even use the money wisely so then they're hurting in April.

Takes money to make money. A few thousand dollars in less than 12 months isn't going to matter much either way.

This post was edited on 3/25 3:03 PM by Formerly Rockymtnole

 

[Nole York City]

Paycheckcity.com

This will give you the amount held out of your check if you input you salary and deductions. It works for each state and is very accurate.

 

[LT4PLY]

If the ex is sketchy and you have a solid job you may just want to arrange always claiming the child and giving her cash. It will likely save you more money anyway because if you don't make much the deduction part of it won't help much and in a lower tax bracket.

Or... if you make too much let her claim the kid and get the cash back from her.

 

[Fijimn]

Originally posted by Formerly Rockymtnole:

Originally posted by Fijimn:

I know you guys are saying this based on the principle...but, because you have to keep your money liquid to pay the tax bill, you are literally talking about 6 to 9 dollars in interest. If you calculate real return rate after fees and your time, I'm not sure you come out ahead....other than being pissed off at the gobermint on April 15th or what ever date you pay if you file for extension.

Yeah, agreed. It makes sense on principle but the difference is negligible. And the reality is many do not "invest" or even use the money wisely so then they're hurting in April.

Takes money to make money. A few thousand dollars in less than 12 months isn't going to matter much either way.


This post was edited on 3/25 3:03 PM by Formerly Rockymtnole

Then again, if you get a large refund and you are not maxed out on retirement savings, investment, etc. you need to adjust. My sis/bro in law drive me nuts. No real retirement so to speak, mostly live pay check to pay check, and get a pretty nice refund, which they proceed to use for vacation or new furniture, etc. Last year I told him that if he adjusted his w/h, then he might have more money during the year and they looked at me as if I was speaking Chinese.