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View Full Version : Part time job! How many dependents to claim?


HunnyPots
04-20-2006, 09:05 PM
I am going to work part time for the first time in almost 20 years! :banana:
My delima is how many dependents should I claim on my W4? My DH claims all four of us on his and we get back around $2000 at tax time. I am going to be working about 24 hours each week and while I want to take home as much of my pay as possible, I don't want to end up owing taxes next year.
What would you do? Thanks!

Lorikr65
04-20-2006, 09:12 PM
I work part-time and make about $220/wk and nothing gets taken out. I think you have to make a certain amount before they event take anything. I claimed 2 but nothing comes out. If you want money taken out you have to ask for a certain amount. Can anyone confirm that this is correct??

disneysteve
04-20-2006, 09:24 PM
If you are already getting a $2,000 refund, you can probably claim 0.

If you really want to run the numbers, go to:
http://www.irs.gov/individuals/page/0,,id=14806,00.html

comicguy
04-21-2006, 05:32 AM
In my family there are 3 of us Me, DW, and DS.

Both my wife and I claim 0 withhold at the higher single exemption.

Both of us also have an extra 10/ week taken out for state taxes.

I know people will argue that I am giving the gov't a no interest loan but I would rather have a nice refund otherwis I would just piddle that money away each week.

mickeyfan2
04-21-2006, 07:32 AM
I would do one of two things

1) You claim one and your DH claims three

2) You claim zero and you DH claims four

tar heel
04-21-2006, 08:37 AM
Remember that exemptions are not necessarily related to people, so your DH is not claiming all of you per se. If you have lots of deductions, such as big mortgage, you may be able to claim many more deductions than you have people. Just the fact that you got a $2,000 refund indicates that he could have claimed more this year.

When I first returned to work part-time, I claimed zero the first year and eventually raised it to two after getting a substantial refund. I think my DH claims five, but I'm not really sure! We got a $185 refund this year, so we've got it pretty much how we want it.

I don't understand disneysteve's comment about your being able to claim zero since you're getting a big refund. :confused3 Claiming zero is safe, of course, b/c it usually ensures you'll have enough deducted.

disneysteve
04-21-2006, 08:59 AM
I don't understand disneysteve's comment about your being able to claim zero since you're getting a big refund. :confused3 Claiming zero is safe, of course, b/c it usually ensures you'll have enough deducted.
Sorry about that. I realized this morning that I was backwards there. Although DW went back to work last year and claimed 0 and they took out hardly anything. We actually owed money this year for the first time. My accountant still isn't quite sure how that happened (not that I'm complaining - I was glad not to get a big refund).

And you are right about being able to claim any number regardless of family size. I claim 5 and there are only 3 of us.

bellarella
04-21-2006, 09:00 AM
Exemptions and dependants are two different things.

Exemptions are what you claim on your withholding form to try to get your tax withholding in line with what you will actually owe come tax time. This number does not really correspond to how many dependants you have -- it corresponds to how many or few deductions you are entitled to take from your income. For example, we are a family of 5 and take 10-15 exemptions on our W-4s. This is because we have a sizable itemized deduction that we take and only withholding 5 would leave us with a huge refund. Other people will find that they need to claim 0 and then have extra taken out of their check in order to meet their tax obligations.

Dependants are the number of individuals in your family that you are allowed to claim on your 1040. They are actual people, so you can't monkey around with this number the way you do with exemptions.

I agree with Steve's link to the IRS web site. Run the calculator and see how many exemptions it recommends. If you are filing a joint return, it really doesn't matter whose check the money comes out of, so long as you are pulling enough money out between the two of you.

One thing to remember, though, is that if you are filing a joint return, essentially every dollar you earn will be taxed at your marginal rate, so you will probably have to withhold more than you think. Normally tax withholding is figured with your effective rate in mind. Since we have a progressive tax system, the last dollar you earn is taxed more heavily than the first dollar you earn. But when they with hold taxes, they spread the withholding evenly out across the entire year, thus "averaging" your rate. Well, when you go from a one income household filing jointly to a two income household filing jointly, that becomes a problem, since in relation to your household income, every dollar the second wage earner makes is a "last dollar." For example, if you had been making $50,000 then your marginal tax rate was 15%. If you now come on board and make $25,000, now your marginal tax rate as a family jumps to 25%. This could cause you to underwithhold if you aren't careful, because they way they pull withholding, they will pull yours on the basis of $25,000 being all that you are making, which means on a 15% marginal rate (and only a small portion of it being taxed at 15%, the first 15,000 would only be taxed at 10%), when in relation to your family income, that money is actually in the 15% and 25% rate.

Anyway, I'm sure this is making no sense -- but the best thing to do is use the IRS site to calculate approximately how much tax you should owe, and then make sure that what is being withheld will get you there. Your HR department should be able to tell you how much each exemption will change your withholding (and if not, the info is on the web too). Just don't be surprised if you need to actually fill out your W-4 as filing single with 0 exemptions and additional money taken out in order to get enough money taken out of your check.

bellarella
04-21-2006, 09:09 AM
Sorry about that. I realized this morning that I was backwards there. Although DW went back to work last year and claimed 0 and they took out hardly anything. We actually owed money this year for the first time. My accountant still isn't quite sure how that happened (not that I'm complaining - I was glad not to get a big refund).


Steve, I bet it was because of the marginal tax rate issues -- If her income was relatively low, they would only be withholding the lowest marginal rate, therefore even claiming 0 exemptions she wasn't getting much tax pulled. But when you added her income to the family income, every dollar she earned was a new dollar at your top marginal rate. When you go from a one family income to a two family income, you usually either need to adjust both partner's withholding to pull more money out, or have then new wage earner have filing status as single and pull extra on top of claiming 0.

HunnyPots
04-21-2006, 09:33 AM
Excellent info. I really did not know that exemptions and dependents were not the same thing. I told you its been a while! I am going to use the IRS calculator and see what comes up.
Thanks again!

dcfromva
04-21-2006, 09:33 AM
I am going to work part time for the first time in almost 20 years! :banana:
My delima is how many dependents should I claim on my W4? My DH claims all four of us on his and we get back around $2000 at tax time. I am going to be working about 24 hours each week and while I want to take home as much of my pay as possible, I don't want to end up owing taxes next year.
What would you do? Thanks!
HunnyPots,
When you have two folks earning money, it adds a level of complexity onto the withholding. Just for illustration, suppose you have two spouses earning 50K each--the payroll office tax withholding software doesn't know about the other spouse's income and doesn't take it into consideration and doesn't know that together, it's 100K which would be a higher tax bracket (and more withholding).

Your best bet is to use the link DisneySteve provided--it is kind of like a dress rehersal for your taxes next year and it does take into consideration a lot of variables unique to your tax situation. It will give you a better idea as to how much you will owe with your wages added together.

HTH...Congratulations on your new job!
-DC :earsboy:

paper1225
04-21-2006, 09:42 AM
I am thinking about going to work part time this fall(DS will be in school full time-sob). You mentioned you made 220- is that take home or before taxes? Also, how much is that per hour and for how many hours. I hope this is not too personal-I would like to bring home about 200/week but am not sure where to start! If anyone else has any advice, let me know!! TIA

Lorikr65
04-21-2006, 06:11 PM
I am thinking about going to work part time this fall(DS will be in school full time-sob). You mentioned you made 220- is that take home or before taxes? Also, how much is that per hour and for how many hours. I hope this is not too personal-I would like to bring home about 200/week but am not sure where to start! If anyone else has any advice, let me know!! TIA

I work in a doctor's office as a secretary. I work 9am-2:30pm Mon-Thurs, so I work 22 hrs/wk. I had been staying at home so for me, even though I think $10/hr wasn't that great, it was better than the $0 I was getting!! I am still looking around for something for a bit more and with benefits/vacation, etc. I get paid $10/hr for the hours I work and that's it, but you can't beat the hours!! I was making quite a few dollars more an hour when I left my full-time job 3 years ago but I left it to stay at home. I also do medical transcription 2-3 hrs/wk for a relative.

What is your background in before you started staying at home?? I would suggest starting there.

Lori